Write a 1-2 page executive summary answering the following questions:
1. What are the four elements of a valid contract?
2. Describe the objective theory of contracts. How does that theory apply to this case?
3. Why do you think the court held that there was not a valid agreement here?
4. Are advertisements generally considered offers? Why or why not?
5. How does this case differ from a reward situation, where a unilateral contract is formed upon completion of the requested act?
1. Agreement. To have an enforceable contract, there must be an agreement between the parties. This requires an offer by the offeror and an acceptance of the offer by the offeree. There must be mutual assent by the parties.
Consideration. The promise must be supported by a bargained-for consideration that is legally sufficient. Gift promises and moral obligations are not considered supported by valid consideration.
The parties to a contract must have contractual capacity. Certain parties, such as persons adjudged insane, do not have contractual capacity.
Lawful object. The object of the contract must be lawful. Contracts to accomplish illegal objects or contracts that are against public policy are void" (Contemporary Business and Online Commerce Law, Cheeseman, Henry R., page 172).
2. "The objective theory of contracts holds the intent to enter into an express implied-in-fact contract is judged by the reasonable person standard" (Contemporary Business and Online Commerce Law, Cheeseman, Henry R., page 172). There are two matters to conclude when determining the reasonable person standard (1) the words and conduct of the parties and (2) the surrounding circumstances. No valid contacts results from offers that are made in jest, anger, or undue excitement.
This theory applies to this case, in that the objective theory of contracts is judged by the reasonable person standard.