Acceptance

Question 1

Restatement § 30 Form of Acceptance Invited

Answer 1

(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance.
(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances

Question 2

Restatement § 30 Form of Acceptance Invited Required Form

A sends a letter to B stating the terms of a proposed contract. At the end he writes, “You can accept this offer only by signing on the dotted line below my own signature.” A replies by telegram, “I accept your offer.”

Answer 2

There is no contract.

Question 3

Restatement § 50 Acceptance of Offer Defined

Answer 3

Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.

Question 4

Restatement § 50 Acceptance by Performance

Answer 4

Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise.

Question 5

Restatement § 50 Acceptance by Promise

Answer 5

(3) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.

Question 6

Restatement § 50 Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise: Acceptance by Performance

A, who is about to leave on a month’s vacation, tells B that A will pay B $50 if B will paint A’s porch while A is away. B says he may not have time, and A says B may decide after A leaves.

Answer 6

If B begins the painting, there is an acceptance by performance which operates as a promise to complete the job. See §§ 32, 62.

Question 7

Restatement § 50 Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise: Acceptance by Promise

A mails a written order to B, offering to buy on specified terms a machine of a type which B regularly sells from stock. The order provides, “Ship at once.” B immediately mails a letter of acceptance.

Answer 7

This is an acceptance by promise, even though under § 32 B might have accepted by performance.

Question 8

Restatement § 35 The Offeree’s Power of Acceptance

Answer 8

(1) An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer.
(2) A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in § 36.

Question 9

Restatement § 52 Who May Accept an Offer

Answer 9

An offer can be accepted only by a person whom it invites to furnish the consideration.

Question 10

Restatement § 52 Who May Accept an Offer Identity of the Offeree

A sends B an order for goods. C, from whom A has previously refused to buy such goods, has purchased B’s business. Without notifying A of the change of proprietorship, C ships the goods as ordered. A, before using the goods, discovers that they have come from C.

Answer 10

A’s retention or use of them is an acceptance of an offer from C, and a contract arises.

Question 11

Restatement § 52 Who May Accept an Offer Identity of the Offeree

A sends B an order for goods. C, from whom A has previously refused to buy such goods, has purchased B’s business. Without notifying A of the change of proprietorship, C ships the goods as ordered.

Answer 11

Neither B nor C has accepted A’s offer.

Question 12

Restatement § 52 Who May Accept an Offer Rationale

A makes an offer to B, who dies after receiving it.

Answer 12

His executor, though acting within the permitted time, cannot accept.

Question 13

Restatement § 58 Necessity of Acceptance Complying with Terms of Offer

Answer 13

An acceptance must comply with the requirements of the offer as to the promise to be made or the performance to be rendered.

Question 14

Restatement § 58 Necessity of Acceptance Complying with Terms of Offer Scope

A offers to sell a book to B for $5 and states that no other acceptance will be honored but the mailing of B’s personal check for exactly $5. B personally tenders $5 in legal tender, or mails a personal check for $10.

Answer 14

There is no contract.

Question 15

Restatement § 58 Necessity of Acceptance Complying with Terms of Offer Scope

A offers to pay B $100 for plowing Flodden field, and states that acceptance is to be made only by posting a letter before beginning work and before the next Monday noon. Before Monday noon B completes the requested plowing and mails to A a letter stating that the work is complete.

Answer 15

There is no contract.

Question 16

Restatement § 59 Purported Acceptance Which Adds Qualifications

Answer 16

A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter-offer.

Question 17

Restatement § 59 Purported Acceptance Which Adds Qualifications Qualified Acceptance

A makes an offer to B, and B in terms accepts but adds, “This acceptance is not effective unless prompt acknowledgement is made of receipt of this letter.”

Answer 17

There is no contract, but a counter-offer.

Question 18

Restatement § 59 Purported Acceptance Which Adds Qualifications Statement of Conditions Implied in Offer

A makes a written offer to B to sell him Blackacre. By usage the offer is understood as promising a marketable title. B replies, “I accept your offer if you can convey me a marketable title.”

Answer 18

There is a contract.

Question 19

Restatement § 59 Purported Acceptance Which Adds Qualifications Statement of Conditions Implied in Offer

A makes a written offer to sell B a patent in exchange for B’s promise to pay $10,000 if B’s adviser X approves the purchase. B signs the writing in a space labelled “Accepted:” and returns the writing to A.

Answer 19

B has made a conditional promise and an unconditional acceptance. There is a contract, but B’s duty to pay the price is conditional on X’s approval.

Question 20

Restatement § 38 Rejection

Answer 20

(1) An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
(2) A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.

Question 21

Restatement § 38 Rejection The Probability of Reliance

A makes an offer to B and adds: “This offer will remain open for a week.” B rejects the offer the following day, but later in the week purports to accept it.

Answer 21

There is no contract unless the offer was itself a contract. B’s purported acceptance is itself a new offer.

Question 22

Restatement § 39 Counter-offers

Answer 22

(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
(2) An offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.

Question 23

Restatement § 39 Counter-offers Counter-Offer as Rejection

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I will pay $4,800 for the parcel,” and on A’s declining that, B writes, within the thirty day period, “I accept your offer to sell for $5,000.”

Answer 23

There is no contract unless A’s offer was itself a contract (see § 37), or unless A’s reply to the counter-offer manifested an intention to renew his original offer.

Question 24

Restatement § 39 Counter-offers Contrary Statement of Offeror or Offeree

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I am keeping your offer under advisement, but if you wish to close the matter at once I will give you $4,800.” A does not reply, and within the thirty-day period B accepts the original offer.

Answer 24

B’s acceptance is effective.

Question 25

Restatement § 39 Counter-offers Qualified Acceptance, Inquiry or Separate Offer

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “Won’t you take less?” A answers, “No.”

Answer 25

An acceptance thereafter by B within the thirty-day period is effective. B’s inquiry was not a counter-offer, and A’s original offer stands.

Question 26

Restatement § 61 Acceptance Which Requests Change of Terms

Answer 26

An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.

Question 27

Restatement § 61 Acceptance Which Requests Change of Terms Interpretation of Acceptance

A offers to sell B 100 tons of steel at a certain price. B replies, “I accept your offer. I hope that if you can arrange to deliver the steel in weekly installments of 25 tons you will do so.”

Answer 27

There is a contract, but A is not bound to deliver in installments.

Question 28

Restatement § 61 Acceptance Which Requests Change of Terms Interpretation of Acceptance

A offers to sell specified hardware to B on stated terms. B replies: “I accept your offer; ship in accordance with your statement. Please send me also one No. 5 hand saw at your list price.”

Answer 28

The request for the saw is a separate offer, not a counter-offer.

Question 29

Restatement § 40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance

Answer 29

Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer.

Question 30

Restatement § 40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance Subsequent Acceptance

A makes B an offer by mail. B immediately after receiving the offer mails a letter of rejection. Within the time permitted by the offer B accepts.

Answer 30

This acceptance creates a contract only if received before the rejection, or if the power of acceptance continues under §§ 37- 39.

Question 31

Restatement § 42 Revocation by Communication from Offeror Received by Offeree

Answer 31

An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.

Question 32

Restatement § 42 Revocation by Communication from Offeror Received by Offeree Revocability of Offers

A makes a written offer to B to sell him a piece of land. The offer states that it will remain open for thirty days and is not subject to countermand. The next day A orally informs B that the offer is terminated.

Answer 32

B’s power of acceptance is terminated unless the offer is a contract under § 25.

Question 33

Restatement § 42 Revocation by Communication from Offeror Received by Offeree What Constitutes Revocation

A makes an offer to B, and later says to B, “Well, I don’t know if we are ready. We have not decided, we might not want to go through with it.”

Answer 33

The offer is revoked.

Question 34

Restatement § 42 Revocation by Communication from Offeror Received by Offeree What Constitutes Revocation

A makes an offer to buy goods from B, and later requests B not to deliver the goods until A is in a better condition to handle them.

Answer 34

The request does not revoke the offer.

Question 35

Restatement § 43 Indirect Communication of Revocation

Answer 35

An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.

Question 36

Restatement § 43 Indirect Communication of Revocation Sale of Land

A offers a parcel of land to B at a stated price, and gives B a week in which to consider the proposal. Within the week A contracts to sell the parcel to C, and B is informed of that fact by a tenant of the premises. B nevertheless sends a formal acceptance which is received by A within the week.

Answer 36

There is no contract between A and B.

Question 37

Restatement § 43 Indirect Communication of Revocation Other Transactions

A offers to employ B to replace C, an employee of A who has given A a month’s notice of intention to quit. A gives B a week to consider the proposal. C changes his mind and makes a contract with A for continued employment for a year. B asks C about his duties, and C informs B of the new contract. B immediately mails a letter of acceptance to A, which arrives within the week allowed for acceptance.

Answer 37

There is no contract between A and B.

Question 38

Restatement § 43 Indirect Communication of Revocation Definite Action; Reliable Information

A offers to sell B a hundred shares of stock at a fixed price, and states that the offer will not be revoked for a week. Within the week C offers A a higher price for the same stock, and B learns of the higher offer.

Answer 38

B’s power of acceptance is not terminated, since he is entitled to assume that A will honor his commitment regardless of its legal effect.

Question 39

Restatement §63 Time When Acceptance Takes Effect

Answer 39

Unless the offer provides otherwise,

(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; but
(b) an acceptance under an option contract is not operative until received by the offeror.

Question 40

Restatement §63 Time When Acceptance Takes Effect Loss or Delay in Transit

A offers to buy cotton from B, the operator of a cotton gin, B to accept by specifying the number of bales in a telegram sent before 8 p.m. the same day. B duly sends a telegram of acceptance and ships the cotton, but the telegram is not delivered.

Answer 40

There is a contract, and A is bound to take and pay for the cotton.

Question 41

Restatement §63 Time When Acceptance Takes Effect Loss or Delay in Transit

A mails to B an offer to lease land, stating, “Telegraph me Yes or No. If I do not hear from you by noon on Friday, I shall conclude No.” B duly telegraphs “Yes,” but the telegram is not delivered until after noon on Friday.

Answer 41

Any contract formed by the telegraphic acceptance is discharged.

Question 42

Restatement §63 Time When Acceptance Takes Effect Revocation of Acceptance

A mails an offer to B to appoint B A’s exclusive distributor in a specified area. B duly mails an acceptance. Thereafter B mails a letter which is received by A before the acceptance is received and which rejects the offer and makes a counter-offer. On receiving the rejection and before receiving the acceptance, A executes a contract appointing C as exclusive distributor instead of B.

Answer 42

B is estopped to enforce the contract. Compare § 40.

Question 43

Restatement § 68 What Constitutes Receipt of Revocation, Rejection, or Acceptance

Answer 43

A written revocation, rejection, or acceptance is received when the writing comes into the possession of the person addressed, or of some person authorized by him to receive it for him, or when it is deposited in some place which he has authorized as the place for this or similar communications to be deposited for him.

Question 44

Restatement § 68 What Constitutes Receipt of Revocation, Rejection, or Acceptance Point of Receipt

A sends B by mail an offer dated from A’s house and states as a condition of the offer that an acceptance must be received within three days. B mails an acceptance which reaches A’s house and is delivered to a servant or is deposited in a mail box at the door within three days; but A has been called away from home and does not personally receive the letter for a week.

Answer 44

There is a contract.

Question 45

Restatement § 54 Acceptance by Performance; Necessity of Notification to Offeror

Answer 45

(1) Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a notification.
(2) If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless
(a) the offeree exercises reasonable diligence to notify the offeror of acceptance, or
(b) the offeror learns of the performance within a reasonable time, or
(c) the offer indicates that notification of acceptance is not required.

Question 46

Restatement § 54 Acceptance by Performance; Necessity of Notification to Offeror Rationale

A mails a written order to B for goods to be manufactured specially for A, and requests B to begin at once since manufacture will take several weeks.

Answer 46

Under § 62 acceptance is complete when B begins, but A’s contractual duty is discharged and he may treat the offer as having lapsed before acceptance unless within a reasonable time B sends notification of acceptance or unless the offer or a prior course of dealing indicates that notification is not required.

Question 47

Restatement § 54 Acceptance by Performance; Necessity of Notification to Offeror Where No Return Promise is Contemplated

A, the proprietor of a medical preparation, offers $100 to anyone who contracts a certain disease after using the preparation as directed. B uses it as directed.

Answer 47

B has accepted the offer, and is entitled to the $100 if she later contracts the disease. No notification to A is required until after B has contracted the disease.

Question 48

Restatement § 54 Acceptance by Performance; Necessity of Notification to Offeror Where No Return Promise is Contemplated

A, a newspaper, requests B to discontinue distribution of a rival newspaper, and offers to pay B $10 per week as long as B abstains from such distribution. B discontinues the distribution.

Answer 48

B has accepted the offer, and no notification to A is required.

Question 49

Restatement § 25 Option Contracts

Answer 49

An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer.

Question 50

Restatement § 25 Option Contracts

A promises B under seal or in return for $100 paid or promised by B that A will sell B 100 shares of stock in a specified corporation for $5,000 at any time within thirty days that B selects.

Answer 50

There is an option contract under which B has an option.

Question 51

Restatement § 25 Option Contracts

A offers to sell B Blackacre for $5,000 at any time within thirty days. Subsequently A promises under seal or in return for $100 paid or promised by B that the offer will not be revoked.

Answer 51

There is an option contract under which B has an option.

Question 52

Restatement § 45 Option Contract Created by Part Performance or Tender

Answer 52

(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.

Question 53

Restatement § 45 Option Contract Created by Part Performance or Tender Manifestation of Contrary Intention

B owes A $5000 payable in installments over a five-year period. A proposes that B discharge the debt by paying $4,500 cash within one month, but reserves the right to refuse any such payment.

Answer 53

A has not made an offer. A tender by B in accordance with the proposal is an offer by B.

Question 54

Restatement § 45 Option Contract Created by Part Performance or Tender Manifestation of Contrary Intention

A, an insurance company, issues a bulletin to its agents, entitled “Extra Earnings Agreement,” providing for annual bonus payments to the agents varying according to “monthly premiums in force” and “lapse ratio,” but reserving the right to change or discontinue the bonus, individually or collectively, with or without notice, at any time before payment.

Answer 54

There is no offer or promise.

Question 55

Restatement § 45 Option Contract Created by Part Performance or Tender Tender of Performance

A promises B to sell him a specified chattel for $5, stating that B is not to be bound until he pays the money. B tenders $5 within a reasonable time, but A refuses to accept the tender.

Answer 55

There is a breach of contract.

Question 56

Restatement § 41 Lapse of Time

Answer 56

(1) An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
(2) What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made.
(3) Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in § 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.

Question 57

Restatement § 41 Lapse of Time Direct Negotiations

While A and B are engaged in conversation, A makes B an offer to which B then makes no reply, but on meeting A again a few hours later B states that he accepts the offer.

Answer 57

There is no contract unless the offer or the circumstances indicate that the offer is intended to continue beyond the immediate conversation.

Question 58

Restatement § 41 Lapse of Time Offers Made by Mail or Telegram

A makes B an offer by mail to sell goods. B receives the offer at the close of business hours and accepts it by letter promptly the next morning.

Answer 58

The acceptance is timely.

Question 59

Restatement § 41 Lapse of Time Speculative Transactions

A sends B an offer by mail to sell a piece of farm land. B does not reply for three days and then mails an acceptance.

Answer 59

It is a question of fact under the circumstances of the particular case whether the delay is unreasonable.

Question 60

Restatement § 69 Acceptance by Silence or Exercise of Dominion

Answer 60

(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
(b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
(c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Question 61

Restatement § 69 Acceptance by Silence or Exercise of Dominion Acceptance of Offered Services

A gives several lessons on the violin to B’s child, intending to give the child a course of twenty lessons, and to charge B the price. B never requested A to give this instruction but silently allows the lessons to be continued to their end, having reason to know A’s intention.

Answer 61

B is bound to pay the price of the course.

Question 62

Restatement § 69 Acceptance by Silence or Exercise of Dominion Intent to Accept

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply, but he does not intend to accept.

Answer 62

There is no contract.

Question 63

Restatement § 69 Acceptance by Silence or Exercise of Dominion Intent to Accept

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply and remains inactive with the intention of thereby expressing his acceptance.

Answer 63

There is a contract.

Question 64

Restatement § 69 Acceptance by Silence or Exercise of Dominion Intent to Accept

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B replies by return mail, saying: “I accept your offer.”

Answer 64

There is a contract.

Question 65

Restatement § 69 Acceptance by Silence or Exercise of Dominion Prior Conduct of the Offeree

A, through salesmen, has frequently solicited orders for goods from B, the orders to be subject to A’s personal approval. In every case A has shipped the goods ordered within a week and without other notification to B than billing the goods to him on shipment. A’s salesman solicits and receives another order from B. A receives the order and remains silent. B relies on the order and forbears to buy elsewhere for a week.

Answer 65

A is bound to fill the order.

Question 66

Restatement § 32 Invitation of Promise or Performance

Answer 66

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.

Question 67

Restatement § 32 Invitation of Promise or Performance Promise or Performance

A writes B, “If you will mow my lawn next week, I will pay you $10.”

Answer 67

B can accept A’s offer either by promptly promising to mow the lawn or by mowing it as requested.

Question 68

Restatement § 32 Invitation of Promise or Performance Offer Limited to Acceptance by Performance Only

A publishes the following offer: “I will pay $50 for the return of my diamond bracelet lost yesterday on State Street.” B sees this advertisement and at once sends a letter to A, saying “I accept your offer and will search for this bracelet.”

Answer 68

There is no acceptance.

Question 69

Restatement § 32 Invitation of Promise or Performance Offer Limited to Acceptance by Performance Only 4.

A writes to B, his nephew aged 16, that if B will refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he becomes 21 years of age, A will pay B $5,000. B makes a written reply promising so to refrain.

Answer 69

There is probably no contract. But if B begins to refrain, A may be bound by an option contract under § 45; and if B refrains until he becomes 21, A is bound to pay him $5,000.

Question 70

Restatement § 32 Invitation of Promise or Performance Promise or Performance

A says to B: “If you finish that table you are making and deliver it to my house today, I will give you $100 for it.” B replies, “I’ll do it.”

Answer 70

There is a contract. B could also accept by delivering the table as requested.

Question 71

Restatement § 32 Invitation of Promise or Performance Shipment of Goods

A mails a written order to B, offering to buy specified machinery on specified terms. The order provides, “Ship at once.” B immediately mails a letter to A, saying “I accept your offer and will ship at once.”

Answer 71

This is a sufficient acceptance to form a contract. See Uniform Commercial Code § 2-206(1).

Question 72

Restatement § 32 Invitation of Promise or Performance Shipment of Goods

A mails a written order to B, offering to buy specified machinery on specified terms. The order provides, “Ship at once.” B immediately ships the machinery as requested.

Answer 72

This is a sufficient acceptance to form a contract. If the machinery is defective, the shipment is both an acceptance forming a contract and a breach of that contract, unless B promptly notifies A that the shipment is offered only as an accommodation to A.

Question 73

UCC 2-205 Firm Offers

Answer 73

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.