Common law contract formation

set of promises, legally enforceable

the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration

clarifying ambiguous or unclear language in a contract

courts may add terms to a contract to reflect the parties intentions or legal standards

misconduct or public policy violations

a manifestation of intention to act or refrain from acting in a specified way to justify the promisee in understanding that a commitment has been made

something of value exchanged between parties. (a) an act other than a promise (b) a forbearance, (c) the creation of, modification or destruction of a legal relation, or (d) a return promise, bargained for and given in exchange for a promise”

offer and acceptance

parties express the same willingness to be bound by the same terms.

the actual intention of a party, rather than that party's conduct, determines the party's legal obligations

law examines the conduct of the parties from the perspective of a hypothetical "reasonable person" rather than attempting to examine their actual, objective intentions

facts: Ray wanted to build a house and the contractor claimed he did not agree to the terms. Rule: there was no meeting of the minds and therefore a contract was never formed, contractor did not breach any contract.

manifestation of mutual assent traditionally takes the form of offer and acceptance

the manifestation of willingness to enter into a bargain

acceptance of an offer

commitment to the author/intent, Certainty of terms, communication to the offeree

joking about selling land, reasonable for buyer to think the seller was serious
“A person cannot set up that he was merely jesting when his conduct and words would warrant a reasonable person in believing that he intended…”

aka deposited acceptance or rule of acceptance. places the risk of a lost communication on the offeror
Mailbox rule will not apply if the offeror has stated, expressly or by implication, that he must receive the acceptance for it to be effective. To be legally effective in concluding the bargain at the time of its dispatch, the acceptance must actually reach the offeror in a timely fashion

advertisements are invitations to receive an offer and not an offer themselves
BUT where an advert is clear, definite, and explicit, leaves nothing open for negotiation it is considered an offer

mailbox rule

upon mailing/dispatch

upon receipt

an acceptance is valid only if it accepts all of the terms in the original offer.
There must be mutual assent to the same terms

facts: could not agree on new rental terms. rule: agreement to agree cannot be enforced

facts: American hired Jones to prepare bid specifications, accept bids, and award contracts for construction of the expansion of American’s facilities at the Airport. Quake received an invitation to bid on the employee facilities and automotive maintenance shop project (referred to as the project), and in April submitted its bid to Jones. Jones orally notified Quake that Quake had been awarded the contract for the project. Jones then asked Quake to provide the license numbers of the subcontractors Quake intended to use on the project. Quake notified Jones that the subcontractors would not allow Quake to use their license numbers until Quake submitted a signed subcontract agreement to them. Jones informed Quake that Quake would shortly receive a written contract for the project prepared by Jones. To induce Quake to enter into agreements with its subcontractors and to induce the subcontractors to provide Quake and Jones with their license numbers, Jones sent Quake a letter of intent. At a preconstruction meeting on April 25, 1985, Jones told Quake, Quake’s subcontractors, and governmental officials present that Quake was the general contractor for the project. On that same date, immediately after the meeting, American informed Quake that Quake’s involvement with the project was terminated. Jones confirmed Quake’s termination by a letter dated April 25, 1985. The damages Quake allegedly suffered included the money it spent in procuring the contract and preparing to perform under the contract, and its loss of anticipated profit from the contract.

letters of intent may be enforceable if the parties intend for them to be contractually binding.

bargained for exchange analysis and benefit detriment analysis

Consideration exists when there is a benefit to the promisor for their promise OR a detriment to the promisee on account of the promise of the promisor

mutual assent and consideration

ones party performance is the "price" of the others and vice versa

an acceptance is valid only if it accepts all of the terms in the original offer

if there is any benefit to the promisor or any loss, detriment or inconvenience to the promisee