University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

173

Pages:

2
Author:

bratrochanter

Summary and Key Concepts for the Text Contract Formation and Enforcement 1. Definiteness in Common Law and UCC: o Under common law, the enforceability of contracts emphasizes precise terms to prevent forcing vague commitments onto parties. Classic common law required a high degree of specificity, with any essential terms left vague potentially invalidating the contract. o The UCC (Uniform Commercial Code) has a more flexible approach, allowing contracts to be enforceable even if some terms are left open, as long as there’s evidence of intent to form a contract and enough information to “fill in the gaps” (e.g., setting reasonable prices or delivery terms). 2. Contract Offers in Advertisements: o Generally, advertisements are invitations to negotiate rather than offers because they lack specificity regarding the intent to be bound. Specific language (e.g., “first come, first served”) can transform an ad into an enforceable offer if it limits acceptance to specific individuals or actions. o Reward offers are typically enforceable as unilateral contracts, where the reward is given once the required action is completed. Some jurisdictions require prior knowledge of the reward for the offeree to claim it, while others only require awareness before performance completion. 3. Special Contexts for Offers: o Online Auctions: In the Gleason v. Freeman case, the court upheld that eBay’s standard disclaimer that real estate auctions are nonbinding governed the transaction, despite added language indicating it was “legally binding.” This reinforces that platform terms and disclaimers can override participant language unless both parties clearly indicate binding intent. o Government Bidding and Promissory Estoppel: Ads for bids are usually not offers but invitations, allowing bidders to retract bids until the offeree accepts. Exceptions apply when promissory estoppel limits withdrawal, especially when the government or other statutes specify binding conditions. Ethical and Practical Considerations in Contract Enforcement  The text illustrates how the law often sacrifices some aspects of fairness to maintain the predictability and precision needed for consistent contract enforcement. Courts lean toward enforcing written terms over implied intentions if vagueness risks unjust outcomes.  For example, broad promises like “we’ll take care of you” are typically unenforceable due to their vagueness, whereas precise terms in fine print (e.g., on tickets or agreements) can become binding even if unread, provided reasonable notice was given. Practical Application in Case Analysis (Hypothetical Cases) In specific cases, courts balance intent and specificity to determine contract enforceability, using practical approaches to safeguard parties' reasonable expectations.