Business Law exam 2

Last update by chadcozean on 06/21/2011
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–Acceptance-upon-dispatch rule. –Acceptance is effective when dispatched, even if it is lost in transmission. •Potential for confusion. Wise offeror may state in offer that acceptance effective upon receipt. –If offeree first dispatches a rejection and then sends acceptance, mailbox rule does not apply.

mailbox rule

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    –Acceptance must be properly dispatched. •Properly addressed, packaged, and posted –Under common law, if acceptance is not properly dispatched, it is not effective until actually received by the offeror.
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    •If offer says acceptance must be by a specified means of communication. •Use of an unauthorized means, acceptance not effective.
    express authorization
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    •Mode of acceptance implied from what is customary in similar transactions, usage of trade, or prior dealings between the parties.
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    Rejection of offer

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    Received by offeror

    Acceptance of offer

    Sent by offeree

    Acceptance after previous rejection of offer

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    something of legal value given in exchange for a promise.
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    •Consideration is a necessary element for the existence of a contract. •Contracts not supported by consideration are generally unenforceable.
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    •Consideration consists of two elements:
    •Something of legal value must be given; and •There must be a bargained-for exchange.
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    equity doctrine that permits a court to order enforcement of a contract that lacks consideration
    promissory estoppel
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    •A contract is considered supported by legal value if: •The promisee suffers a legal detriment (giving up an existing legal right and or taking on a new legal duty); or •The promisor receives a legal benefit.

    •Most commonly involves tangible payment (e.g., money, property) or performance of an act (providing services)
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    •Process of bargaining or inducement that leads to an enforceable contract. •Naturally present in most commercial transactions.
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    •Gratuitous promises are unenforceable due to lack of consideration. –Promise freely given and not induced by promise of some benefit or act. •Completed gift promise not revocable.
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