ACCEPTANCE/INADEQUATE TERMS Flashcards
Promissory Acceptance
When an offer calls for a promise (instead of an act), notice is always essential. A private act by the offeree does not constitute acceptance.
Mailbox Rule
Communications are usually legally effective upon receipt. EXCEPTION: Acceptances are effect when mailed. (Option Ks are not subject to MB Rule)
Acceptance by Performance
Rest. 54: where an offer invites an offeree to accept by rendering performance, no notification is necessary other than beginning performance, unless the offer expressly states that notice be given.
Rest. 45 (p. 157): “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.
Rest. 62.: (1) where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, he tender or the beginning of the invited performance or a tender of a beginning of it is an acceptance by performance; (2) such an acceptance operates as a promise to render complete performance.
Acceptance by Silence or Inaction
Generally does not constitute acceptance. EXCEPT
Rest. 69(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.
Imperfect Acceptance
Counteroffer
§ A rejection and simultaneous new offer
Mirror Image Rule: an acceptance must be coextensive with the offer and may not introduce additional terms or conditions. (i.e. if so, it’s a conditional acceptance/counteroffer)
§ Modern Trend: only material differences have this effect.
§ See also Rest 61 “polite inquiry”
UCC 2-207
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it;
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this title.
§ Discusses conditional acceptances and “material” terms between merchants and what constitutes acceptance.
§ UCC 2-207 is also applied to Rolling Contracts
Misunderstanding
§ Rest 20: (1)There is not manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
□ (a) neither party knows or has reason to know the meaning attached by the other; or
□ (b) each party knows or has reason to know the meaning attached by the other.
§ (2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
□ (a) the party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or
□ (b) that party has no reason to know any different meaning attached by the other, and the other has reason to know he meaning attached by the first party.
Indefiniteness and Open Terms
§ Rest 33: Even though a manifestation of intention is intended to be understood as an offer, it can not be accepted so as to form a contract unless the terms of the contract are reasonably certain.
UCC Gap Fillers
§ UCC 2-204(3): Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
§ Quantity can not be gap filled, but consider UCC 2-306(1)
□ A term which measure the quantity by the output of the seller or the requirements of the buyer means such actual outputs or requirements s may occur in good faith, except that not quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.
