Business Law Ch. 12 (Agreement in traditional & e-contracts)

A meeting of two or more minds in regard to the terms of a contract; usually broken down into two events—an offer by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made.

A promise or commitment to perform or refrain from performing some specified act in the future. -Under the common law, three elements are necessary for an offer to be effective: 1. The offeror must have a serious intention to become bound by the offer. 2. The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract. 3. The offer must be communicated to the offeree.

-is determined by what a reasonable person in the offeree's position would conclude, meaning if offer when person is anger the doesn't have serious intention. -a future intent is NOT an offer -A request or invitation to negotiate is NOT an offer -advertisements are treated NOT as offers to contract but as invitations to negotiate.)

a contract must include the following terms, either expressed in the contract or capable of being reasonably inferred from it: 1. The identification of the parties. 2. The identification of the object or subject matter of the contract (also the quantity, when appropriate), including the work to be performed, with specific identification of such items as goods, services, and land. 3. The consideration to be paid. 4. The time of payment, delivery, or performance.

he offer must be communicated to the offeree. Ordinarily, one cannot agree to a bargain without knowing that it exists

-Termination By Action Of The Parties An offer can be terminated by action of the parties in any of three ways: 1. revocation 2. rejection 3. counteroffer -revocation In contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability. -Revocation may be accomplished by either of the following: 1. Express repudiation of the offer (such as \"I withdraw my previous offer of October 17\"). 2. Performance of acts that are inconsistent with the existence of the offer and are made known to the offeree (for instance, selling the offered property to another person in the presence of the offeree). Option contract An option contract is created when an offeror promises to hold an offer open for a specified period of time in return for a payment (consideration) given by the offeree. Takes away the offeror's power to revoke the offer for the period of time specified in the option. -Rejection-->If the offeree rejects the offer—by words or by conduct—the offer is terminated. -Counteroffer-->A counteroffer is a rejection of the original offer and the simultaneous making of a new offer. -Termination by Operation of Law The power of the offeree to transform the offer into a binding, legal obligation can be terminated by operation of law through the occurrence of any of the following events: 1. Lapse of time. 2. Destruction of the specific subject matter of the offer. 3. Death or incompetence of the offeror or the offeree. 4. Supervening illegality of the proposed contract. (A statute or court decision that makes an offer illegal automatically terminates the offer.)

is a voluntary act by the offeree that shows assent (agreement) to the terms of an offer.

Silence may constitute an acceptance in the following circumstances: 1. When an offeree takes the benefit of offered services even though he or she had an opportunity to reject them and knew that they were offered with the expectation of compensation. 2. When the offeree has had prior dealings with the offeror. For instance, a merchant routinely receives shipments from a certain supplier and always notifies that supplier when defective goods are rejected. The merchant's silence regarding a particular shipment (failure to reject the goods) will constitute acceptance.

In a bilateral contract, acceptance is in the form of a promise (not performance). Because bilateral contracts are formed when the promise is made (rather than when the act is performed), communication of acceptance is necessary

In bilateral contracts, acceptance must be timely. The general rule is that acceptance in a bilateral contract is timely if it is made before the offer is terminated -mailbox rule A rule providing that an acceptance of an offer becomes effective on dispatch. Acceptance takes effect, thus completing formation of the contract, at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror. -Authorized Means of Acceptance. When an offeror specifies how acceptance should be made (for example, by overnight delivery), express authorization is said to exist. The contract is not formed unless the offeree uses that specified mode of acceptance If the offeror does not expressly authorize a certain mode of acceptance, then acceptance can be made by any reasonable means. -Substitute Method of Acceptance. Sometimes, the offeror authorizes a particular method of acceptance, but the offeree accepts by a different means. In that situation, the acceptance may still be effective if the substituted method serves the same purpose as the authorized means.

Electronic contracts, or e-contracts, must meet the same basic requirements (agreement, consideration, contractual capacity, and legality) as paper contracts. Disputes concerning e-contracts, however, tend to center on contract terms and whether the parties voluntarily agreed to those terms.

Sellers doing business via the Internet can protect themselves against contract disputes and legal liability by creating offers that clearly spell out the terms that will govern their transactions if the offers are accepted. -Displaying the Offer The seller's Web site should include a hypertext link to a page containing the full contract so that potential buyers are made aware of the terms to which they are assenting -Provisions to Include a standardized contract form may suffice. At a minimum, an online offer should include the following provisions: 1. Acceptance of terms. 2. Payment. 3. Return policy. 4. Disclaimer. 5. Limitation on remedies. 6. Privacy policy. 7. Dispute resolution. -Dispute-Settlement Provisions Online offers include provisions relating to dispute settlement. The offer might include an arbitration clause specifying that any dispute arising under the contract will be arbitrated in a designated forum. forum-selection clause A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract. choice-of-law clause Some online contracts may also include a choice-of-law clause specifying that any contract dispute will be settled according to the law of a particular jurisdiction, such as a state or country

An agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, \"I agree\"; sometimes referred to as a click-on license or a click-wrap agreement.

An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged; sometimes called a shrink-wrap license.

Terms and conditions of use that are presented to an Internet user at the time certain products, such as software, are being downloaded but that need not be agreed to (by clicking \"I agree,\" for example) before being able to install or use the product.

As defined by the Uniform Electronic Transactions Act, \"an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

-an electronic signature is as valid as a signature on paper, and an e-document can be as enforceable as a paper one -For an e-signature to be enforceable, the contracting parties must have agreed to use electronic signatures. For an electronic document to be valid, it must be in a form that can be retained and accurately reproduced. -The E-SIGN Act DOES NOT apply to all types of documents. Contracts and documents that are exempt include: court papers, divorce decrees, evictions, foreclosures, health-insurance terminations, prenuptial agreements, and wills.

An agreement between a seller and a buyer who frequently do business with each other on the terms and conditions that will apply to all subsequently formed electronic contracts. - can prevent disputes over signatures in their e-contracts, as well as disputes over the terms and conditions of those contracts

- the UETA declares that a signature may not be denied legal effect or enforceability solely because it is in electronic form. -The primary purpose of the UETA is to remove barriers to e-commerce by giving the same legal effect to electronic records and signatures as is given to paper documents and signatures.

A record is \"information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable [visual] form.\"

The UETA is enacted WITHOUT MODIFICATIONS--> state law governs The UETA is enacted WITH MODIFICATIONS--> state law governs if: -the state's procedures or requirements are consistent with the E-SIGN act - the state does not give priority to one type of technology -the state laws was enacted after the E-SIGN act & refers to it the E-SIGN governs if: -the modifications are inconsistent with the E-SIGN Act