Maurice decides he wants blackacre and mails an

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Unformatted text preview: in a particular or simply by stating that the acceptance is not effective until it is received. Note that because other communications, such as revocations and rejections, are not effective until they are received by the other party, it is easy for matters to get confused. For example, Jin offers to sell Blackacre to Maurice for $100,000. Now assume the following take place in the order listed: Jin changes his mind and mails a revocation. Maurice decides he wants Blackacre and mails an acceptance. Jin receives the acceptance. Maurice receives the rejection. Do they have a contract? Yes, because Jin’s mailing the revocation had no effect. The offer was still open when Maurice mailed his acceptance, which formed the contract. Perhaps the lesson for offerors is to make revocations by the fastest means possible! 4.4 Consideration O nce an offer and acceptance are established, the third element of a contract must be examined. A contract is a bargained-for exchange between the parties, and consideration is whatever is being exchanged. To put it yet another way, consideration is simply the price of the contract. Since consideration involves an exchange between parties, making a visual reference of a situation can be helpful. See figure 4.1 for an example. rog80328_04_c04_062-088.indd 77 10/26/12 5:42 PM CHAPTER 4 Section 4.4 Consideration Figure 4.1: Diagramming consideration Diagramming contracts is a good way to keep track of consideration issues. Harry has contracted here to pay $3,000; Peter has contracted to paint Harry’s house. Harry Peter $3,000 Paint house Example 4.23. Norma offers to sell Leopold her stamp collection for $1,000. Leopold accepts. A valid contract is formed, the consideration for which is as follows: the $1,000 that Leopold must pay to Norma, and the stamp collection that Norma must turn over to Leopold. Consideration can be either of the benefit form, as in the above case where Leopold gets the benefit of the stamp collection and Norma is entitled to the benefit of the money, or the detriment (also called forbearanc...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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