Bus-115 (Business Law): Chapter 8 Guide
Contractual elements: Offer, acceptance, mutual assent and consideration
Learning Objectives
After reading this chapter, students should be able to accomplish the following objectives:
- Define mutual assent.
- Identify the elements of an offer.
- Explain the UCC’s concept of offer in contract law.
- Explain the nature of acceptance.
- Define the mirror image rule.
- Explain the process of revocation.
- Identify those statutes that affect mutual assent in cyberspace.
- Explain the elements of fraud and misrepresentation.
- Identify the effects of mistake on mutual assent.
- Describe duress and undue influence.
Major Concepts
8-1 Mutual Assent and the Offer
If certain requirements are met, the court will conclude that the parties intended to make and accept an offer. Mutual assent is created when an offer is made by one party and accepted by the other party. An offer is valid if it is made with serious intent, displays clear and definite terms, and is communicated to the offeree.
8-2 Acceptance of an Offer
The second major part of mutual assent is the acceptance of the offer. Communication of the acceptance may be either express or implied. Under the mirror image rule, an acceptance must not change any of the terms of the offer. The UCC has altered the mirror image rule. At any time prior to acceptance, the offeror can withdraw the offer. Still, some types of offers cannot be revoked by the offeror. These involve option contracts, firm offers, and lease option contracts.
8-3 Mutual Assent in Cyberspace
The principal rules concerning the interpretation of the enforcement of cyber-contracts are found in the E-Sign Act, the Uniform Electronic Transactions Act (UETA), and the Uniform Computer Information Transactions Act (UCITA).
8-4 The Destruction of Mutual Assent
Fraud involves deliberate deception about some material fact that leads a party into an agreement that is damaging to that party. Misrepresentation is a false statement innocently made with no intent to deceive. A mutual mistake may allow for rescission by either party. Duress and undue influence rob a person of the ability to make an independent, well-reasoned decision to enter freely into a contract.
