Week 5 - AEM320 Week 5 I Elements of a Valid Contract A...

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AEM320 – Week 5 I. Elements of a Valid Contract A. Agreement between the parties B. Reached with genuine, mutual assent C. Supported by consideration D. For a legal purpose E. By parties with capacity F. In the required form [if any] II. Requirement of a Valid Offer A. Contractual intention 1. Must intend a legal obligation 2. Objective standard applied i. See Catamount Slate Products, Inc. v. Sheldon, Case 10-1, text at 181 3. Not an invitation to do business or negotiate - (advertisements are not treated as offers). i. See Lefkowitz v Great Minneapolis Surplus Store, Case 10-2, text at 183 – A man was trying to generate business for his store. He runs an advertisement saying a particular item is for sale for some amount of money (to get people in the store). Court says you must sell item for this amount. Must state if quantities are limited and if there will be no rain checks. (These circumstances are now often covered by state statutes that prohibit businesses from enticing people into buying a regular item at a normal price by way of getting them in the door or otherwise known as "bait and switch," not they have to offer rain checks.) . 4. See Steinberg v. Chicago Medical School - Steinberg gets rejected from Chicago medical school and alleges that his rejection came, because the medical students at Chicago are all wealthy or related to alumni. Steinberg alleges that before his rejection, he entered a contract when he paid fifteen dollars as application fee. The appeals court agrees that Chicago medical did form an intention to enter into a contract and does not immediately dismiss the case. B. Definiteness - The offer must be clear, unambiguous, and contain all essential terms. These terms may be different depending on whether it is covered by the DCC. 1. The offer must state the subject matter. 2. The offer must state the parties involved. 3. The offer generally must state the price. 4. Some of these items may be less essential, depending on the item: terms of delivery, time of delivery, etc. 5. See UCC 2-204 (3). The offer must have the essential terms, but if terms are missing then a court may add them rather than say that there is no agreement. You can imply that certain terms are to be included. Even something you may consider to be an essential term may be left out given the right circumstances. For example, if the price is missing, and in past agreements between the two parties the price has been the market price, the court will enter the market value. But this doesn't necessarily hold for common law. 6. See Martin Delicatessen v. Schumacher - This is a non-DCC situation, because it deals with a real estate lease. The Martin Deli is the tenant of the building. In the five-year lease with the landlord, there is a provision to give Martin the option to renew within a certain time period. When the deli asks to exercise their option, the landlord gives them a
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This note was uploaded on 02/04/2008 for the course AEM 3200 taught by Professor Grossman,d. during the Spring '07 term at Cornell.

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Week 5 - AEM320 Week 5 I Elements of a Valid Contract A...

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