Key Terms
Agreement
A mutual understanding between two or more parties about rights and duties. Contract: a legally enforceable agreement.
Private law
Contracts are binding only on the parties involved, not the general public.
Three economic functions of contract law
1. Enables efficient exchange of goods and services.
Offer
A conditional promise to do or refrain from doing something now or in the future. Demonstrates willingness to enter a co
NOTE
Forbearance on a VALID claim can be a valid offer. The invalid version applies only to claims the offeror knows are base
Lapsed offer
No longer valid because a reasonable time to accept has passed. An expired coupon is the example.
Acceptance
An implied or express act showing willingness to be bound by the terms of an offer.
Express acceptance
Verbally or in writing stating agreement. Implied acceptance: conduct that demonstrates agreement (handing over money fo
Counter-offer
If acceptance changes, adds, or modifies any term of the offer, it is a counter-offer — no contract is formed.
Mutual assent (meeting of the minds)
Both parties' intention to enter a binding contract on agreed terms. No mutual assent = no contract.
Consideration
The bargained-for exchange of something of value showing parties intend to be bound.
Two required elements
1. Something of value (a legal detriment) 2.
Legal detriment
Giving up a legal or property right.
Promissory estoppel
When consideration is absent, a court may still enforce a promise to prevent injustice.
Five elements to establish promissory estoppel
1. A definite promise 2.