Contract Creation

A promise, or set of promises, that the law will enforce

• Offer

• Acceptance

• Consideration

Definition:

A tentative promise made by one party, subject to a condition or containing a request to the other party

Elements of Offer:

• Definite and Certain

• Communicated to recipient

• Intended to be binding, once accepted

Invitation for people to create offer

An offer that leaves no room for negotiation over contract terms

A new offer that is created as a result of a rejection of the original offer

Final unqualified consent to the terms of the offer

• Revocation

• Lapse

Offeror can revoke the offer at any time prior to its acceptance

• Offeree paid to keep offer open

• Offer was made under seal

If the offer has a time limit to accept and that time passes, the offer is deemed revoked

Regards to when and where the contract acceptance occurs is reasonable in the circumstance

Acceptance occurs when acceptance is put on the mailbox, not when received

Price paid for contract

When a party makes an offer that’s accepted by another party without consideration – no consideration = no contract

A past promise that forms the basis of a future promise - past consideration = no consideration

A new contract is not formed when a debtor promises to reduce their debt

If a creditor accepts part performance in settlement of a debt, and the debtor actually paid the reduced amount, the entire debt is extinguished

A promise made property under the seal of the promisor doesn’t require consideration to make it legally binding

Court will exercise its “equitable jurisdiction to prevent a party from denying his/her promise, despite no consideration

If two parties enter a contract without the intentions to of creating legal obligation (like a joke), the contract isn’t legally binding

Some parties lack the necessary legal competence/capacity to enter contracts, so they hold limited or no capacity – i.e., minors

Generally NOT legally bound to contracts, and can void most of them

• Contracts on the supply of necessities/essentials

• Beneficial contracts of service

Same as minors, not legally bound to contracts

Void: Failed formation = no contract

Voidable: Contract exists, but can be made void at option of one of the parties

The object of the contract can’t be illegal

• Violation of an act

• Violation of common law or public policy

Terms of the contract must be clear enough to be understood as certain, or else contract is deemed unenforceable

Vague or incomplete agreements can be deemed “void” by the court, so contract never existed

Unclear terms used

Contract missing essential terms