FORMING A VALID K
I. MUTUAL ASSENT
The formation of a contract requires an objective approach of
(1) a manifestation of intent, in which there is a
a. each party must act in a way that reasonably leads the other party to believe that an agreement has been reached
(2) a bargain,
a. the process of an offer and acceptance constitute a bargain
(3) in which there is a manifestation of mutual assent to the exchange and,
a. mutual assent looks at the conduct of the parties objectively from the perspective of a “reasonable person”
(4) a consideration” (Rstmt 17)
a. Consideration is the value given by one party in exchange for performance, or a promise to perform, by another party
A. Manifestation of Intent:
each party must act in a way that reasonably leads the other party to believe that an agreement has been reached
Eurice Brothers: Builder claimed mistake in agreeing to construction of P’s house
à objective manifestation of intent is to be bound; subjective intent is not relevant
Lonergan: Lonergan made inquiries into land advertised in newspaper but it was sold to someone else
à there is no meeting of the minds and therefore no enforceable k where communications between the parties do not evidence a definite offer an acceptance
(a) meeting of the minds takes a subjective approach examining the actual intention of a party to determine obligations (Rule 26)
à ads are generally not offers unless very specific
B. Types of Contracts
1. Implied K:
a. Implied in Fact: promises of parties are inferred from their acts or conducts (Rstmt 156)
b. Implied in Law: Quasi K: one party is required to compensate another for a benefit conferred in order to avoid unjust enrichment (Rstmt 157) (see Promissory Estoppel)
(1) was benefit conferred?, ((2) was there p
rson would believe that she could conclude a bargain by giving assent in the manner required by the expression, and
(3) creates a power of acceptance for offeree
(Restatement 24)
A. Elements of an Offer
1. Objective manifestation
2. Which is clear and explicit
3. Offeror must be ready to be bound
4. Offer must be communicated
5. Offeree must believe that acceptance is invited
6. Offeror is Master of the Offer
B. Validity of Particular Kinds of Offers
1. Offers made in jest: an offer which the offeree knows or should know is not a valid offer; voids k
2. Preliminary negotiations: Solicitation of bids is not offer and cannot be accepted; serves as a basis for preliminary negotiations (See promissory estoppel)
