(A)(2) Offer and Acceptance Generally Flashcards
What is an offer?
an objective manifestation of a willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree—aka a communication that gives power to the recipient to conclude a contract by acceptance
What is the general intent requirement for an offer?
a statement is an offer only if the person to whom it is communicated could reasonably interpret it as an offer.
What type of intent is required for an offer?
an offer must express the present intent of a person to be legally bound to a contract
What is the primary test of whether a communication is an offer?
based on the objective theory of contracts—whether an individual receiving the communication would believe that he could enter into an enforceable deal by assenting to the offer
What is the knowledge by the offeree requirement for an offer?
to have power to accept an offer, the offeree must have knowledge of it
What are the requirements for terms for an offer?
for a contract to exist, the terms of the contract must be certain and definite, or the contract fails for indefiniteness
What are the essential terms for contracts under common law?
- the parties
- subject matter
- price
- quantity
What is the requirement regarding essential terms in a contract under common law?
under common law, all essential terms must be covered in the agreement
Are the essential terms required by the UCC more strict or more liberal?
the UCC allows for a more liberal contract formation
Contract formation under UCC - essential terms
under the UCC, a contract is formed if both parties intend to contract and there is a reasonably certain basis for giving a remedy
What is the key term that must be specified for a sale of goods?
quantity
UCC - gap fillers
as long as the parties intend to create a contract, the UCC “fills the gap” if other terms, such as the time or place for delivery, or even the price of the goods, are missing
requirements/output contracts formation requirements
requirements or output contracts satisfy UCC contract formation requirements even without naming specific quantities because the UCC implies good faith as a contract term
duration terms for contracts
in most ongoing contracts, if a duration term is not specified in the agreement, courts will imply that the contract will last for a reasonable period of time
duration terms for contracts - employment contracts
if an employment contract does not state duration, there is a rebuttable presumption that the employment is “at will”
what is an at will relationship
in an employment-at-will relationship, either party can terminate the relationship at any time, without the termination being considered a breach of contract
at will relationship termination exception
either party can terminate the relationship at any time, without the termination being considered a breach of contract unless the termination is against public policy, such as when an employee is discharged for filing a discrimination claim
duration terms - “permanent employment”
if an employment contract provides for “permanent employment,” most courts hold that, in the absence of a proven contrary intention, the employment is “at will,” because the duration term in the contract is considered too vague
duration terms - “lifetime employment” court interpretation
if the offer promises “lifetime employment,” some courts hold that the agreement is for at will employment, while others take the term literally
how do employment agreements typically overcome default rule of employment at will?
by express terms of the contracts—rules published by the employer such as those in an employee handbook or implication (usage or conduct)
what is the general rule for missing terms in a contract?
a contract may still be formed when a term is missing, if it appears that the parties intended to create a contract
what may a court do regarding missing terms in a contract?
the court may supply the missing term because there is a presumption that the parties intended to include a reasonable term
what missing terms may the UCC “fill the gap” for?
- time (reasonable) or place for delivery (the seller’s place of business)
- the assortment of goods (reasonable choice of the buyer
- price of goods
what missing terms may NOT the UCC “fill the gap” for?
subject matter and quantity
UCC gap fillers - price
if the contract omits a price of if the parties agree to set a price in the future and then fail to agree, the UCC supplies a reasonable price at the time of delivery
UCC gap fillers - objective price standard
the contract must have an objective price for the court to reference - the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.
how may a court infer the reasonableness of a party’s conduct or a contract term?
the court may infer a term or the reasonableness of party’s conduct based on the parties’ course of performance, course of dealing or on trade usage
vague terms vs missing terms
when the terms of a contract are vague, the same presumption for missing terms cannot be made because the parties have manifested an intent that cannot be determined because of the vagueness of the terms
contract language requirements
(1) the offer must contain words of promise, undertaking, or commitment (as distinguished from words that merely indicate intention to sell or interest in buying); and
(2) the offer must be targeted to a number of people who could actually accept
bilateral contract
a contract that requests a return promise
unilateral contract
a contract that requests an act
invitation to deal
offers must be distinguished from invitations to deal
advertisements as offers general rule
advertisements are generally considered invitations to receive offers from the public, unless associated with a stated rewards; an advertisement that is sufficiently specific and limiting as to who may accept may also qualify as an offer (i.e. used car for sale $5,000 - first come, first serve)
