Week 2
 Agreement
 Invalid Assent
Agreement
 The manifestation (or indication) of
mutual assent by the parties.
Objective Standard
 An objective standard is used to
determine whether parties had a
“meeting of the minds”.
 Looks to what a reasonable person
would believe, based on the
circumstances.
Offer
 An indication of current willingness to
enter into a contract, communicated
by the person making the offer.
Consideration
 Something promised, given,
refrained-from, or done that has the
effect of making an agreement a
legally enforceable contract.
Open Terms
 Under the UCC a contract may form
despite a failure to specify certain
terms
 Also called “gap-filling”
Revocation
 Under common law, an offer that is
not, in itself, a contract, can be
revoked at any time before
acceptance (unless promissory
estoppel applies).
Firm Offer
 A UCC rule under which no
consideration is required to hold offer
open between merchants.
Rejection
 Offeree terminates offer
 If an offeree rejects an offer, the
rejection terminates the offer and any
subsequent attempt to accept is an
offer.
Counter Offer
 Offeree responds to offer with an
offer.
Acceptance
 Acceptance is compliance or
agreement by one party with the
terms and of another’s offer so that a
contract forms.
Implied Acceptance
 Normally, “pure” silence does not
operate as acceptance
 Acceptance can be implied based on
behavior, partial performance, or past
dealings
Mailbox Rule
 Common law rule
 Acceptance occurs when dispatched
by appropriate means
Mirror Image Rule
 Common law rule
 Acceptance must be identical to offer
Battle-of-the-Forms Rule
 UCC rule
 Overrides mirror image rule when
merchants use forms
Invalid Agreements
 When does offer plus acceptance not
equal a contract?
 Apparent agreements may be invalid
because of duress, fraud, mistake, or
misrepresentation
Fraud
 Fraud is a false statement of material
fact, made with intent to deceive, on
which another reasonably relies, to
his or her detriment.
Misrepresentation
 Misrepresentation is a false statement
made without intent to deceive, upon
which a party justifiably relies to his
or her detriment.
Mistake
 The concept of mistake is generally
limited to mutual mistakes about the
“basic assumptions” of fact in cases
where the parties have not
specifically allocated risk with respect
to assumptions.
Duress
 Duress is a wrongful threat, intended
to induce action by the other party.
Undue Influence
 A special relationship can give one
person undue influence over another.
 If the dominant party takes
advantage of that position in entering
a contract, the agreement may be
voidable.
 Often, undue influence involves a
fiduciary relationship —a relationship
in which one party is obliged to act in
the best interest of the other party.
Unconscionable
 A contract that is so unreasonable
that it is “shocking”.