Chapter 9 Contracts: Agreement and Consideration

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Chapter 9Contracts Agreement and Consideration
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Learning Objectives

• What elements are necessary for an effective
  offer? What are some examples of nonoffers?
• In what circumstances will an offer be
  irrevocable?
• What are the elements that are necessary for an
  effective acceptance?
• What is consideration? What is required for
  consideration to be legally sufficient?
• Under what circumstances may a promise be
  enforced without consideration?

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Offer

• An agreement consists of a valid offer and
  acceptance.
• An offer is the Offerors promise to perform.
• An offer requires serious, objection intention.
• Opinions are not offers.
• Good Intentions are not offers.
• Preliminary Negotiations are not offers.
• Agreements to Agree are not offers.
• Lucy v. Zehmer (1954).

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Offer

• An offer requires (continued)
• Reasonably definite terms.
• Satellite Entertainment Center, Inc. v. Keaton
  (2002).
• Communication to Offeree.

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Termination of Offer

• Termination of Offer.
• By Act of the Parties.
• Revocation by Offeror (unless irrevocable).
• Rejection by Offeree (or counteroffer).
• Operation of Law lapse of time, destruction,
  death or incompetence, supervening illegality.

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Acceptance

• Voluntary act by Offeree that shows assent to
  terms of original offer.
• Mirror Image Rule.
• Offeree must unequivocally accept offer.
• Additional terms may be considered a
  counteroffer.
• Acceptance by Silence.

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Acceptance

• Communication of Acceptance.
• Authorized Means of Communication is either
  express or implied by form of offer (e.g., U.S.
  mail, fax, email).
• Mailbox Rule Offeree accepts offer when the
  acceptance is dispatched to Offeror in the form
  it was received, unless offer requires a
  different method (e.g., Fed-Ex, or receipt by
  Offeror).

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Consideration

• Consideration is value given in return for a
  promise.
• Elements
• Something of legally sufficient value given in
  exchange for a promise and
• That is bargained for between the parties.
• Seaview Orthopedics v. National Healthcare
  Resources, Inc. (2004).

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Consideration

• Contracts that Lack Consideration
• Pre-Existing Duty.
• Unforeseen Difficulties.
• Past Consideration.
• Illusory Promises.
• Settlement of Claims
• Accord and Satisfaction.
• Release.
• Covenant Not to Sue.

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Promissory Estoppel

• Promissory Estoppel (detrimental reliance)
  doctrine applies when a person relies on the
  promise of another to her legal detriment.
• Promisor is estopped (precluded) from revoking
  the promise. There must be
• Clear and definite promise with substantial
  reliance.
• Justice is served by enforcement of the promise.