3. Acceptance

Question 1

What is required for acceptance under a unilateral contract?

Answer 1

1) Offeree has knowledge of offer

2) Offeree ‘completes’ performance
- For Offeror
- For TP

Question 2

What happens if Offeror does not have knowledge of completed performance in a unilateral contract?

Answer 2

Offeror is discharged from his contractual obligation

Question 3

What is required for acceptance under a bilateral contract?

Answer 3

1) Offeror has knowledge of acceptance

2) Offeree promises to perform/ ‘starts’ performance
- Implies promise to complete performance

3) Mirror image rule
- ‘Unequivocal’ acceptance of ALL terms
- UNLESS different/new terms => Counteroffer/Rejection (services)

Question 4

What is required for acceptance under the Mirror Image Rule?

Answer 4

Unequivocal acceptance of ALL terms => Acceptance

New/Different terms => Counteroffer/Rejection
- Services (NOT goods)

Question 5

How may silence constitute acceptance?

Answer 5

Prior dealings/trade

• Commercially reasonable expectation that silence creates acceptance
• Offeree accepts benefits

Offeree knew/should have known ability to prevent mistake ‘by a word’ + expected compensation (common law)

Question 6

What is required for acceptance of shipment of goods (Article 2)?

Answer 6

Shipment of non-conforming goods

• Acceptance + Breach
• Rejection + Breach

Shipment of non-conforming goods w/ notice (goods as ‘accommodation’)

• Acceptance
• Rejection (NO breach)

Question 7

What is required for acceptance of different/new terms under Battle of the Forms?

Answer 7

1) Offeree’s definite + timely acceptance
- UNLESS offer expressly made conditional on assent

2) Either;
- BOTH Seller + Buyer are merchants
- One of parties is merchant + Offeror expressly agrees to different terms (otherwise mere proposal => NOT part of contract)

3) Additional terms
- NOT materially alter original terms (based on facts)
- NOT expressly limit acceptance
- NOT already objected/objected within reasonable time after notice received

3) Different terms (Knockout Rule)
- Parties assumed to have objected conflicting terms => UCC to fill in missing terms
- Merchant Confirmatory Memorandum is subject to Knockout Rule

Question 8

What is required for conditional acceptance?

Answer 8

1) New term: Condition

2) Offeror expressly assents to condition
- NOT by performance (UNLESS Offeree accepts performance => Parties’ conduct creates contract based on original terms + UCC supplementary terms, NOT new terms)

Otherwise counts as new offer (rejection of original offer)

Question 9

What is required for acceptance under the Mail Box Rule?

Answer 9

1) Properly addressed + stamped

2) Acceptance sent before rejection
- Acceptance arrives first
- NOT rejection arrives first + Offeror detrimentally relied on rejection

2) Acceptance sent after rejection
- Acceptance arrives first
- NOT rejection arrives first

3) Means
- Authorised
- Unauthorised + Offeror received acceptance while offer was in existence

4) Effective
- Once sent
- Once received (options contract/as contract states)

Question 10

What is required for acceptance of auction contracts (UCC)?

Answer 10

1) Auctioneer announces sale by auction
- With reserve (can withdraw before announcing completion)
- Without reserve

2) Either;
- Fall of hammer (UNLESS another bid during the fall => Auctioneer can reopen auction OR accept original bid)
- Other customary manner