Exam 2 Review

Exam 2 Review - Exam 2 Review Ch. 10, 19, 11, 12, 17, 18,...

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Exam 2 Review Ch. 10, 19, 11, 12, 17, 18, 22 - Elements of a Contract o Agreement – one party makes a valid offer, and the other party must accept it Meeting of the minds – parties understood each other and they intended to enter into an agreement Offer – must contain 2 elements Offeror’s intent to enter into a present bargain, and definite term of the offer communicated to the Offeree Invitation to Bargain – a person making an invitation to bargain does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed Price Quotes – generally not an offer, but an invitation to bargain Advertisements – generally not an offer and consequently are only invitations for offers, UNLESS o Subject matter is for a single of limited acceptance that has been communicated to the public at large o Ex. $100 reward for the dog Termination of Offer o Offeree can’t accept an offer that has been terminated Revocation – Offeror can revoke an offer at any time before it has been accepted Option Contracts Rejection – offer terminates once the offeree rejects the offer, a counter off is a rejection under common law Expiration – When an offeror specifies a specific time for acceptance, that period is binding Operation of Law – death or mental incapacity of the offeror terminates the offer o Acceptance Manifestation of assent to the offer
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Offeror can specify the means of acceptance and its timeliness Authorized means of acceptance Silence is NOT acceptance Mirror Image Rule – Common Law Offeree seeks to vary the offer either by addition, deletion, or substitution of even the smallest change there is no acceptance, but a counteroffer/rejection UCC – Battle of Forms UCC treats the offeree’s additional terms to an offer differently than how it treats an offeree’s terms that contradict the offeror’s offer. Between Non-Merchants – Additional terms become proposals for inclusion into the contract Between Merchants – Additional (not different) terms become part of the contract UNLESS o Offeror’s offer limits it acceptance to the terms of the offer o Additional terms materially alter the contract o Offeror objects within reasonable time Mailbox Rule – Acceptance is generally effective upon dispatch o Consideration – means that there must be bargaining that leads to an exchange between the parties Illusory Promise – one of the parties has given any consideration and has an unfettered election to perform or not (one party is bound and the other is not) A benefit conferred by the promise in the past is no consideration for a promisor
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This note was uploaded on 08/22/2011 for the course FIN 3055 taught by Professor Cgiles during the Spring '08 term at Virginia Tech.

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Exam 2 Review - Exam 2 Review Ch. 10, 19, 11, 12, 17, 18,...

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