CPAContracts-1 - Contracts (Common Law Rules) Definition:...

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Contracts (Common Law Rules) Definition: Enforceable Promise(s) I. NECESSARY ELEMENTS A. OFFER 1. must manifest intent to be bound 2. must be specific as to parties, subject matter, consideration, etc. 3.must be communicated to offeree. Persons to whom offers aren’t made cannot accept (see B 1, below) -Offers cannot be assigned (although contract rights, resulting from a valid contract can be assigned—see III, A, Assignments, below). 4. Offeror can revoke offer any time up until acceptance. (there is an exception to this rule as to contracts for goods sold by merchants – UCC2) 5. Option Contracts: Offeror is bound to hold offer open for time specified, but only if consideration for the option is actually paid . 6. Advertisements (i.e., newspaper ads) are not offers but merely solicitations for offers. 7. Revocations are effective upon receipt by offeree. 8. Offers die if/when the offeror does (unlike K rights). B.ACCEPTANCE 1. can only be made by person at whom directed 2. must be in the form required by offer ( see unilateral, bilateral, above) 3. “mirror image” rule: offeror is master of offer, acceptance must mirror all terms and conditions 4. an acceptance that does not mirror the offer is a counter-offer and thus a rejection . 5. once an offer is rejected it cannot be accepted 6. rejections are only effective upon receipt 7. a mere inquiry is not a counter-offer. Where there is a valid option K a proposal to change the terms of the offer is also not a counter-offer. Recall that the person has given consideration for the right to have the offer held open for a specified time period. 8. Unilateral offer: expects acceptance by completion of solicited performance by offeree: “I will pay you (promise to pay you) if you paint.” Offer is accepted when painting is completed. 9. Bilateral offer: expects acceptance by return promise from offeree: “I will pay if you PROMISE TO PAINT” Offer is accepted when offeree promises to paint. 10. Mail Box Rule: a) results in a “properly dispatched” acceptance being effective upon dispatch,
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receipt of the acceptance is thus irrelevant. b) does not apply if the offer precludes it c) may not apply if there are multiple communications from offeree to offeror (i.e., offeree rejects by phone, accepts by mail or vice-versa). In that instance, 1st communication to be received by offeror is valid. 11. silence generally does not qualify as acceptance C. CONSIDERATION 1. must be mutual 2. need not be equal 3. involves the incurring of a “legal detriment” a) giving up of a legal right OR b) incurring a new legal duty c) a “promise not to sue” is the relinquishment of a right and thus valid consideration, even for an option K. 4.
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CPAContracts-1 - Contracts (Common Law Rules) Definition:...

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