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Chapter 12 Notes

An offeror makes an offer to an offeree in exchange for consideration. The offeree can then accept or reject the offer. Acceptance occurs when the offeree communicates acceptance to the offeror, such as through performance of the contract terms or notifying the offeror. Rejection occurs when the offeror receives notice of rejection from the offeree. An offer can specify a time limit for acceptance and include provisions regarding how the offer may be terminated, such as through destruction of an item or if the terms become illegal. A unilateral contract cannot be revoked once performance has begun, while an option contract creates a separate irrevocable offer for a period of time in exchange for consideration.

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Chapter 12 Notes

An offeror makes an offer to an offeree in exchange for consideration. The offeree can then accept or reject the offer. Acceptance occurs when the offeree communicates acceptance to the offeror, such as through performance of the contract terms or notifying the offeror. Rejection occurs when the offeror receives notice of rejection from the offeree. An offer can specify a time limit for acceptance and include provisions regarding how the offer may be terminated, such as through destruction of an item or if the terms become illegal. A unilateral contract cannot be revoked once performance has begun, while an option contract creates a separate irrevocable offer for a period of time in exchange for consideration.

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Angelia T
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 12 – Contracts and Agreement

Offeror makes an offer to offeree in exchange for consideration. Then, offeree accepts and promises to
transfer the consideration

There will be a REJECTION or ACCEPTANCE

Acceptance occurs at time in person or performance. If not by either of these actions, then
when offeree dispatches acceptance (email, mail, etc)

Rejection occurs when offeror receives rejection

“Express revocation to offeree - rejection” = expressing termination of offer


Ex: “Hi Bob, I revoke my offer to sell you this car for $2K.” “Oh no! My dream car!”

“Offer terminated by counter offer - rejection”

Ex:

An offer can have time limits called “Offer Revocation Time Limit” but must be reasonable
Ex: “You have until 9PM on June 3rd to accept my offer to buy my car for $2K”
If someone fails to meet this criteria then the offer is deemed revoked. While the offeror can
still accept to sell the car regardless, the original offer for $2K is eligible to change

An offer can be terminated if something is DESTROYED

An offer can be terminated if something is ILLEGAL

An offer can be terminated by conduct of offeror


Ex: Offering to sell a car to someone but then selling it to someone else

Unilateral Contract = offers that cannot be revoked

Ex: If you paint my house while I’m away, I’ll pay you $1.5K. There is an acceptance of contract
and right to payment upon completion. If someone has begun to perform, then it would be
inequitable to revoke offer

Option Contract = an offer that cannot be revoked but is a separate contract to original

Ex: Angie pays Pookie $100 for exclusive right to purchase a cat tower for $1500, only if Angie
pays $1500 for this cat tower within 30 days. Pookie cannot sell this cat tower to anybody for 30
days. The $100 essentially keeps Pookie locked in an irrevocable offer.
Choice of Law Provision

 Every state has its own contract law (Common and statutory).
 If parties are from differing states, choice of law will be applied by judge or arbitrator in
event of dispute.
 Parties to contract can decide which state law to apply in interpreting contract.
 Not to confuse where case is going to be heard
Forum Selection Clause

A contract clause indicating where case will be litigated. If parties in differing states have a
dispute, if there’s litigation, there is negotiation as to where the case will be hear. For example,
Florida law may be applied to the dispute but agreed to be heard in California.

Arbitration Clause

Parties may agree to resolve disputes through arbitration. Usually binding, neither party can sue
one another in court. Arbitrator acts like a judge

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