Chapter 10

Chapter 10 - 1 Chapter 10- Mutual Assent Intro o o The...

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Chapter 10- Mutual Assent Intro o The manner in which parties usually show mutual assent is by offer and acceptance o The law applies an objective standard and is concerned only with the assent, agreement, or intention of a party as it reasonably appears from his words or actions. The law of contracts is not concerned with what a party may have actually thought or the meaning that he intended to convey, even if his subjective understanding or intention differed from the meaning he objectively indicated by word or conduct Offer o An offer is a definite proposal or undertaking made by one person to another which manifests a willingness to enter into a bargain. The person making the proposal is the offeror, the person to whom it is made is the offeree o The offeror simply confers upon the offeree the power to create a contract by accepting the offer. Until the offeree exercises this power, the outstanding offer creates neither rights nor liabilities o An offer may take several forms: (1) it may propose a promise for a promise; (2) it may be a promise for an act (unilateral contract); (3) it may be in the form of an act for a promise (inverted unilateral contract) o Essentials of an offer Communication The offeror must communicate the offer, in an intended manner, to the offeree An offer may be made to the general public. No person, however, can accept such an offer until and unless he has knowledge that the offer exists Intent The intent of an offer is determined objectively from the words or conduct of the parties The courts sometimes consider subjective intention in interpreting the parties’ communications Occasionally, a person exercise her sense of humor; the promisor intends the promise as a joke and the promisee as a reasonable person should understand it to be such; if the intended jest is so successful that the promisee believes that the joke is in fact an offer, and so believing accepts, the objective standard applies and the parties have entered into a contract A promise made under obvious excitement or emotional strain is likewise not an offer It is important to distinguish language that constitutes an offer from that which merely solicits or invites offers; these lack intent and are therefore not deemed offers; these proposals of an offer to accept (but do not bring about a contract) include preliminary negotiations, advertisements, and auctions Preliminary negotiations o If a communication creates in the mind of a reasonable person in the position of the offeree an expectation that his acceptance will conclude a contract, then the communication is an offer o If it does not, then the communication is a preliminary negotiation 1
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o Initial communications between potential parties to a contract often take the form of preliminary negotiations, through which the parties either request or supply the terms of an offer that may or may not be given o A statement that may indicate a willingness to make an offer is not in itself an offer
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Chapter 10 - 1 Chapter 10- Mutual Assent Intro o o The...

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