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What are the Legal Ingredients of a Contract?
- Offer
- Acceptance
- Consideration
- Intention
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Define Offer.
- The starting point of all contracts
- One party makes a promise to enter into a contract on specified terms (the "offer"), as soon as the offer is accepted.
- Only a complete offer can form the basis of a contract.
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What is an Invitation to Treat?
- It is not an offer and is only treated in law as an expression of willingness to do business.
- Most advertisements and displays of goods in stores are "invitations to treat".
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Does the Offeror or the Offeree make the offer?
- Offeror - Person who makes the offer
- Offeree - Person to whom the offer is made
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An offer may be terminated by?
- Revocation - withdrawal of an offer
- Lapse - expiration of an offer after specified or reasonable period
- Rejection - the refusal to accept an offer
- Counteroffer - Turning down an offer and proposing a new one in its place
- Death or insanity
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What is a Firm Offer?
The law permits offerors to revoke their offers despite a promise to leave the offer open for a set period of time.
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When does Acceptance occur?
- Occurs when the offeree indicates an unqualified (qualified is a counteroffer) willingness to enter into a contract on the terms in the offer.
- Contract comes into existence at the moment of acceptance.
- Acceptance must normally be communicated to the other party to be effective.
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Uniform Electronic Commerce Act (UECA) states:
Acceptance of an offer can be made electronically.
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Define Consideration.
- The price paid for a promise.
- May be other than $$, such as good or services, as long as something of value.
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What is a Gratuitous Promise?
A promise for which no consideration is given. Therefore is no contract.
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What are 3 types of Promises that are Enforceable without Consideration?
- Promise Under Seal
- Promissory Estoppel
- Partial Payment of Debt
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Define Intention to Contract?
- In order for one party to enforce the promise of another, the promise at issue must have been intended to be a contractual one, that is, one that would be enforceable by a court of law.
- If a business relationship, intention is presumed by the courts.
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