(A)(4) Offer and Acceptance - Acceptance Flashcards
acceptance
an objective manifestation by the offeree to be bound by the terms of the offer
who may manifest acceptance?
only a party to whom an offer is extended may accept or, if the offer is extended to a class, a party who is a member of the class may accept
who may manifest acceptance?
only a party to whom an offer is extended may accept or, if the offer is extended to a class, a party who is a member of the class may accept
acceptance - knowledge requirement
an offeree must know of the offer upon acceptance for it to be valid
acceptance - communication requirement
the offeree must communicate the acceptance to the offeror for it to be valid
manner of acceptance
the offeror can detail the manner of proper acceptance
bilateral contract
a contract in which a promise by one party is exchanged for a promise by the other—the exchange of promises is enough to render them both enforceable
how can an offer requiring a promise to accept be accepted?
either:
(a) with a return promise; or
(b) by starting performance
bilateral contract - commencement of performance
commencement of performance of a bilateral contract operates as a promise to render complete performance
unilateral contract
a contract in which one party promises to do something in return for the act of the other party (i.e., a monetary reward for finding a lost dog)
unilateral contract - acceptance by promising performance
unlike a bilateral contract, in a unilateral contract, the offeree’s promise to perform is insufficient to constitute acceptance
unilateral contract - acceptance
acceptance of an offer for a unilateral contract requires COMPLETE performance
unilateral contract - commencement of performance + revocation
once performance has begun, the offer is irrevocable for a reasonable period of time to allow for complete performance unless there is a manifestation of contrary intent
is an offeree bound to completing performance in a unilateral contract?
no
unilateral contract - termination + damages
the offeror may terminate the offer before the offeree begins to perform, expenses incurred by the offeree in preparing to perform may be recoverable as reliance damages
manner of acceptance general rule
when there is doubt as to whether an offer may be accepted by a promise to perform or by performance, the offeree may accept the offer by either
who is the master of the offer?
offeror
determining means of acceptance
the offeror is master of the offer and can dictate the manner and means by which an offer may be accepted—i.e., the offeror can require the offeree to accept in writing or to accept by means of a phone call
what happens if the means of acceptance is not expressly stated?
unless the offeror specifically requires the offeree to accept in a particular manner or by using a particular means, the offeree can accept in any reasonable manner and by any reasonable means
reasonable means of acceptance
a means of acceptance is reasonable if it was used by the offeror, used customarily in the industry, or used between the parties in prior transactions
effectiveness of acceptance by unauthorized means
even if the acceptance is by unauthorized means, it may be effective if the offeror receives the acceptance while the offer is still open
silence as acceptance (implied acceptance) general rule
generally, silence does not operate as an acceptance of an offer, even if the offer states that silence qualifies as acceptance (or implied acceptance), UNLESS an exception applies
silence as acceptance (implied acceptance) general rule EXCEPTIONS (2)
(i) the offeree has reason to believe that the offer could be accepted by silence, and he was silent with the intent to accept the offer by silence; or
(ii) because of previous dealings or patterns of behavior, it is reasonable to believe that the offeree must notify the offeror if the offeree intends NOT to accept
shipment of goods - buyer requesting shipment of goods
if the buyer requests that the goods be shipped, then the buyer’s request will be construed as inviting acceptance by the seller either by a promise to ship or by prompt shipment of conforming or nonconforming goods
shipment of goods - seller ships nonconforming goods
if the seller ships nonconforming goods, then the shipment is both an acceptance of the offer and a breach of the contract—the seller is then liable for any damage caused to the buyer as a result of the breach
shipment of goods - notifying buyer that nonconforming goods are tendered as an accommodation
if the seller “seasonably” notifies the buyer that the nonconforming goods are tendered as an accommodation, then no acceptance has occurred, and no contract is formed
what type of offer is an accommodation (shipment of goods)?
an accommodation is deemed a counteroffer, and the buyer may then either accept (thereby forming a contract) or reject (no contract formed)
mailbox rule
an acceptance that is mailed within the allotted response time is effective WHEN SENT (not upon receipt), unless the offer provides otherwise
mailbox rule - mailing requirements
the mailing must be properly addressed and include correct postage
mailbox rule - rejection following acceptance
if the offeree sends an acceptance and later sends a communication rejecting the offer, then the acceptance will generally control even if the offeror receives the rejection first
mailbox rule - rejection following acceptance: receiving rejection first
if the offeror receives the rejection first and detrimentally relies on the rejection, then the offeree will be estopped from enforcing the contract
mailbox rule - acceptance following rejection
if a communication is sent rejecting the offer, and a later communication is sent accepting the contract, then the mailbox rule WILL NOT apply, and the first one to be received by the offeror will prevail
when is an acceptance or rejection received?
when the writing comes into the possession of the offeror or her agent, or when it is deposited in the offeror’s mailbox
does the offeror have to actually read the communication (acceptance or rejection) first for it to prevail?
no
mailbox rule - revocations effective upon receipt
offers revoked by the offeror are effective upon receipt
mailbox rule - option contracts
the mailbox rule does NOT apply to an option contract, which requires that the acceptance be received by the offeror before the offer expires
mailbox rule - other irrevocable offers
the mailbox rule does NOT apply to offers that specify that acceptance must be received by a certain date
mailbox rule - medium
if the acceptance is via an “instantaneous two-way communication,” such as telephone or traceable fax, it is treated as if the parties were in each other’s presence
notice - unilateral contract
in a unilateral contract, an offeree is not required to give notice after performance is complete, unless he has reason to know that the offeror would not learn of performance within a reasonable time, or the offer requires notice
what happens if notice is required but not provided in a unilateral contract?
the offeror’s duty is discharged UNLESS an exception applies
what are the exceptions to the general rule that the offeror’s duty is discharged in a unilateral contract where notice is required but not provided?
(i) the offeree exercises reasonable diligence to notify the offeror;
(ii) the offeror learns of performance within a reasonable time; or
(iii) the offer indicates that notification of acceptance is not required
notice - bilateral contract
an offeree of a bilateral contract must give notice of acceptance
notice - bilateral contract: mailbox rule
under the mailbox rule, because acceptance becomes valid when sent, a properly addressed letter sent by the offeree operates as an acceptance when mailed, even though the offeror has not yet received the notice
notice - bilateral contract: acceptance by beginning performance
under the UCC, notice is required within a reasonable time if acceptance is made by beginning performance and failure to do so will result in a lapse of the offer
