Contract Law: Offer, Acceptance, and Agreements Assignment

This assignment delves into the core principles of contract law, exploring the essential elements required for contract formation. It begins by defining a contract and the objective theory of contracts, which emphasizes the outward manifestations of agreement. The assignment then examines the four key elements of a valid contract: agreement (offer and acceptance), consideration, legal purpose, and mutual consent, with detailed explanations of each. It further outlines the requirements for an effective offer, including the offeror's serious intention, reasonably certain terms, and communication to the offeree, while also providing examples of non-offers. The document also discusses the evolution of contract law in the context of shrink-wrap and click-on agreements, explaining their acceptance mechanisms and how traditional contract law principles are applied. Finally, the assignment defines consideration as a vital element, exploring its requirements for legal sufficiency, including legal value, bargained-for exchange, and benefit/detriment to the parties involved. The analysis is supported by relevant legal references.

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Fact Pattern Analysis

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Answer 1
A contract is referred to a legally binding agreement which is formed between two or
more parties. This agreement creates a legal duty or responsibility on the parties of the
contract to ensure that they comply with the contractual terms (Blum & Bushaw, 2012). The
objective theory of contract provides that only the contracting parties shall be bound by the
contractual terms which can be objectively inferred from promises made. This theory
provides that an agreement between two or more contractual parties exist if a reasonable
person could judge their actions and behaviour to consider them objectively construe
agreement.
Answer 2
The contractual rights and liabilities are only available for parties if they form a valid
contract with each other. There are four key elements which must be present in order to form
a valid contract. These elements include agreement (offer and acceptance), consideration,
legal purpose and mutual consent. An agreement must form between the parties of a contract
in which a valid offer and acceptance must be given by contracting parties to form a legal
relationship. The party must have the intention to bind itself into the terms of the offer after
the intention is received (Schwenzer, Hachem & Kee, 2012). Moreover, the acceptance must
be communicated to consider as valid. The consideration is something which is exchanged by
the parties as the bargain of the contract. Parties must have mutual consent to create a legal
relationship with each other. The contract must be formed for legal purpose only because a
contract for illegal purpose is considered as invalid.
Answer 3
An effective offer has the authority to bind the contractual parties into a legal
agreement; however, certain elements must be fulfilled for an effective offer. There are three
elements of a valid offer. The first element is that the offeror must have a serious intention to
comply with the terms of the offer after receiving the acceptance. The second element is that
the terms which are included in the offer must be reasonably certain and both parties must
understand those terms (McKendrick, 2014). The object or action in the contract must be
clearly defined in the offer, and both parties must understand them. The time of performance
of the contract must be stated clearly in the offer. The third element is that the offer must be

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communicated by the offeror to the offeree. Some examples of non-offers include agreements
to agree, preliminary negotiations, good intentions, opinions, and auctions.
Answer 4
Shrink-wrap agreements have become popular in the modern era. These are referred
to those agreements where terms are written on the packaging box of products. Along with
these agreements, the click-on agreements gained popularity as well with the popularity of
the internet and online services. In these agreements, the acceptance is given by clicking a
button on the screen which displays, for example, “I agree” in order to complete a transaction
(Garcia, 2013).
The traditional common law of contracts is applied by the court to enforce these
agreements on the parties just like other contracts. As per Article 2 of the UCC (Uniform
Commercial Code), the acceptance in a contract can be made by the conduct of the parties.
Similar provisions are given in the Restatement (Second) of Contracts. As per these
provisions, a legally binding contract can be constructed between the parties through the
conduct of a party by giving acceptance to shrink-wrap or click-on agreement.
Answer 5
Consideration is an essential element of a contract without which the parties did not
enter into a legally binding contract. It is referred to a legal value which is given by parties of
a contract in return for a promise. It is referred to a bargain of the contract in which one party
receives a gain, and another party receives detriment in the contract. The consideration must
be something of legally sufficient value which is given to the parties in a bargained-for-
exchange in a contract (Hillman, 2012). There are certain requirements which must be
fulfilled for a legally sufficient consideration. The parties of a contract must give them
acceptance to exchange, and it conferred a legal benefit on the promisor and imposed a legal
detriment upon the promisee. Consideration has nothing to do with the value of what is
exchanged by the parties of the contract. The subject matter of the consideration which is
decided by the parties must have the same value. Lastly, the consideration in the contract
must be same as the requirement of adequacy.

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References
Blum, B.A. & Bushaw, A.C. (2012). Contracts: Cases, Discussion, and Problems (3rd ed.).
New York: Aspen Publishers.
Garcia, M. (2013). Browsewrap: A Unique Solution to the Slippery Slope of the Clickwrap
Conundrum. Campbell L. Rev., 36, 31.
Hillman, R. A. (2012). The richness of contract law: an analysis and critique of
contemporary theories of contract law. Berlin: Springer Science & Business Media.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press
(UK).
Schwenzer, I., Hachem, P., & Kee, C. (2012). Global sales and contract law. Oxford
University Press.