Agreement and Consideration

1
Chapter 9

• Agreement and Consideration

2
Agreement

• Offer Acceptance
• Offer issues
• Offer reqs. Met?
• Offer still open?
• Has it terminated?
• Acceptance
• Acceptance reqs. Met?

3
Offer-3 basic reqs.

• Objective intent
• Does offeror intend to be bound?
• Not if
• Jest
• Anger
• Exploratory questions

4
Offer-3 basic reqs.

• Terms reasonably definite or certain
• Cannot be too vague
• OK if some details missing
• Examples
• for a good price
• Ill do some painting for you

5
Offer-3 basic reqs.

• Communicated to offeree
• Not effective to offeree receives
• Reward not due if finder did not know of reward
• Only the specific offeree(s) can accept

6
Special Offers

• AdvertisementsNot offers
• Invitation to deal
• Contract law no need to honor ad price
• but statutes now require it
• Very specific ads are offers
• Car ads with stock numbers are offer, but for
  only one car

7
Offerees Options

• Offeree can
• Acceptforms contract
• Neither can later back out
• Rejectkills offer
• Offeree cannot later accept
• Counteroffer
• Rejection new offer

8
How does offer die?

• Offeree rejects or counteroffers
• Offeror Revokes
• Lapse of Time
• Stated.or if not, reasonable
• Subject matter destruction
• Death or incompetency
• Supervening illegality

9
Acceptance

• Unequivocal
• Must be identical to offer
• Mirror image rule
• Any change in terms no acceptance
• Counteroffer or rejection

10
Effective times

• Offerwhen received
• Acceptancewhen sent
• Mailbox rule
• Yes, effective even if lost
• Offeror has uncertain period
• Can modify in offer
• Rejectionwhen received
• Revocation when received

11
Counteroffer Example

• Dealer says Ill sell this car for 8,500.
• Buyer Ill give you 8,000.
• Dealer There is a mistake, that car should sell
  for 10,500, but we must let you have it for
  8,500.
• What is wrong here?

12
Consideration

• Each party must have something at stake in the
  arrangement
• Each party must suffer a legal detriment (Be
  worse off in some way)
• New legal duty
• Giving up an existing right
• Detriments bargained for

13
Consideration example

• Hamer v. Sidway p. 266
• if you dont drink, smoke, cuss, play pool or
  cards till you are 21, Ill pay you 5000
• Consideration? Does each suffer a detriment?

14
Consideration examples

• Two elderly people move in together in his house,
  sign agreement, where each gives up the right to
  boot the other out
• He tries to kick her out
• Hostage in prison riot agrees not to prosecute
  his captor if released

15
Consideration issues

• Pre-existing duty
• Party was already obligated
• Due to job
• Due to contract
• Past consideration
• Violated bargained for aspect
• Second promise is a gift promise
• Illusory Promises

16
Addnl Consideration issues

• Moral Obligations
• Accord and Satisfaction
• For legitimate disputes, agree to change terms to
  settle the dispute
• Releases
• E.g. accepting insurance settlement check

17
Promissory Estoppel

• Fairness Promises without consideration will be
  enforced if
• Promise
• Justifiable reliance
• Reliance substantial
• Injustice if promise not enforced
• Usually the last chance argument