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Contract Formation: Offer, Acceptance, and Consideration Requirements

Common-law rules for valid offer, mirror-image acceptance, mailbox rule, and bargained-for consideration with examples for bar prep.

10 cards· by GuruOwl

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  1. 01
    A valid contract under common law requires mutual assent (offer plus acceptance) and consideration.
    Mutual assent is often referred to as the 'meeting of the minds.'
    Flashify::Law::Contracts::Formation
  2. 02
    What are the three requirements for a valid offer?
    1. Communicated to the offeree; 2. Present contractual intent; 3. Definite and certain terms.
    Preliminary negotiations or jokes do not satisfy the intent requirement.
    Flashify::Law::Contracts::Offer
  3. 03
    Advertisements are generally considered invitations to treat rather than offers.
    An exception exists if the ad is clear, definite, and leaves nothing open for negotiation.
    Flashify::Law::Contracts::Offer
  4. 04
    List the five primary ways an offer can be terminated by operation of law or the parties.
    1. Revocation; 2. Rejection or Counteroffer; 3. Lapse of time; 4. Death or incapacity of either party; 5. Destruction of subject matter.
    Revocation is generally effective only upon receipt by the offeree.
    Flashify::Law::Contracts::Termination
  5. 05
    Under the mirror-image rule, any variance or additional terms in an acceptance constitutes a counteroffer.
    This rule applies to common law contracts; the UCC 2-207 'Battle of the Forms' provides a different standard for the sale of goods.
    Flashify::Law::Contracts::Acceptance
  6. 06
    What is the Mailbox Rule regarding acceptance?
    Acceptance is effective upon proper dispatch (mailing) if the medium is authorized or reasonable.
    In contrast, revocations, rejections, and counteroffers are only effective upon receipt.
    Flashify::Law::Contracts::Acceptance
  7. 07
    Consideration requires a bargained-for exchange of legal value.
    Legal value can be an act, a forbearance, or a return promise.
    Flashify::Law::Contracts::Consideration
  8. 08
    Why is 'past consideration' generally invalid to support a new promise?
    Because the act or promise was not bargained for in exchange for the current promise.
    Consideration must be given in exchange for the specific promise being enforced.
    Flashify::Law::Contracts::Consideration
  9. 09
    The pre-existing legal duty rule states that performing an existing obligation is not consideration unless new or different duties are undertaken.
    An exception also exists if the duty is owed to a third party rather than the promisor.
    Flashify::Law::Contracts::Consideration
  10. 10
    What are the elements of Promissory Estoppel (Restatement § 90)?
    1. A promise; 2. Promisor reasonably expects reliance; 3. Actual reliance by the promisee; 4. Injustice can be avoided only by enforcement.
    This serves as a substitute for consideration to prevent unfairness.
    Flashify::Law::Contracts::Consideration