Acceptance Flashcards
What are requirements for acceptance under common law?
- Acceptance must mirror the terms of the offer
- Acceptance must be communicated to the offeror
What mode of communication is required for acceptance to be successful?
If the offer stipulates means of communicating acceptance, acceptance must be given in that way; if the contract is silent the any reasonable means to transmission are possible for valid acceptance
What are exceptions to general requirement that acceptance must be communicated?
- Unilateral contract
- Acceptance by mail
How does acceptance become effective in a unilateral contract?
Acceptance is effective only by completing performance, no communication is required unless the offer provides otherwise
What is the Mailbox Rule?
The common law mailbox rule governs acceptance by mail, and says that acceptance by mail is effective upon dispatch if properly posted
What are limitations regarding Mailbox Rule?
Mailbox rule applies only to acceptances and not to any other communication, including revocations or rejections.
Can Mailbox Rule be waived?
Yes, the mailbox rule is a default rule, and in effect unless the offeror provides otherwise
Does the Mailbox Rule apply to option contracts?
The mailbox rule is not applicable to option contracts and acceptance is only effective upon receipt
What is rule when offeree mails rejection and then mails acceptance?
Mailbox rule doesn’t apply and whichever reaches the offeror first controls whether a contract is formed
How can a seller accept Buyer’s offer to purchase goods for prompt or current shipment?
Under the UCC, Seller can accept Buyer’s offer to purchase goods for prompt or current shipment in three ways:
1. Promise to ship goods in conformity with offer
2. Prompt or current shipment of goods in conformity
3. Shipment of non-conforming goods
When is shipment of non-conforming goods an acceptance under the UCC?
Shipment of non-conforming goods is a valid acceptance of an offer, but also a breach of contract, which gives the seller the right to cure
When is shipment of non-conforming goods not an acceptance?
When shipment of non-conforming goods is done as an accommodation it’s a counter offer, and buyer is free to accept or reject
What is effect of buyer keeping goods sent as an accomodation?
A buyer keeping goods sent as an accommodation is accepting a counter-offer
What is 2-207 rule regarding additional or differing terms?
If the buyer places and order and makes an offer, and seller’s acceptance form contains terms which differ or are absent from the buyer’s order, it is still an acceptance of the offer, and a valid and enforceable contract is formed
If the buyer places and order and makes an offer, and seller’s acceptance form contains terms which differ or are absent from the buyer’s order, and seller expressly makes acceptance conditional on assent to the additional or different terms, it is not a valid acceptance and no contract is formed yet
What is the effect of new or different terms under UCC 2-207
Transactions involving at least 1 consumer: additional or different terms are merely proposals for addition to contract, and both part of contract unless offeror expressly agrees to the additional terms
Transaction involving merchants: additional terms become part of the contract unless:
1. offer expressly limits acceptance to terms of offer
2. offeror objects to additional terms within a reasonable time
3. the additional terms would materially alter the contract, and result in surprise or hardship if incorporated without express awareness of the other party
Transactions involving merchants: different terms follow the “knock out rule” such that both offeror’s original provision and the offeree’s different provision cancel out
-minority rule treats different terms of the acceptance as proposals for addition
