C7. Acceptance Flashcards
What is an acceptance?
Manifestation of assent by the offeree to the terms made by the offeror in the manner required by the offer
What is the mirror rule for acceptance?
unless the acceptance is a mirror image of the offer, the acceptance is merely a counteroffer and no contract forms
What is the choice of promise or performance for acceptance?
Where the contract specifies the required manner of acceptance, the holder must conform. Where the manner of acceptance is not specified, the holder may exercise by promising to perform what the option requires of him
What is the notice requirement for acceptance?
1) It is necessary that the other party be notified that a party has accepted a contract
2) a guarantor is entitle to notice of acceptance unless there exists some special circumstances excusing it
What are the exception to the notice of requirement for acceptance?
no notice is required if the offeror shows by his language and from the nature of the transaction that he does not expect it
Does silence constitute an acceptance?
No, unless there is a duty to speak has arisen from a past relationship of the parties, their previous dealings, or other circumstances
When is there a duty to speak?
1) Where conduct accompanied by silence would be deceptive and beguiling
I. One who keeps silent, knowing his silence will be misinterpreted should not be able to deny the natural interpretation of his conduct
2) When the relationship between parties is such that a reply is justified, offeror has duty to reply and silence is acceptance
I. One who is silent, knowing his silence will be misconstrued (due to past conduct) should not be able to deny interpretation of his conduct
What is the modified last shot rules under UCC Sec. 2-207?
a. Rejects CL mirror image rule and converts many common-law counteroffers into acceptances
b. Intended to deal with two situations
i. The written confirmation: where an agreement has been reached either orally or by informal correspondence between the parties and is followed by one or both parties sending formal memoranda embodying the terms so far as agreed upon and adding terms not discussed
ii. Offer and acceptance: a wire or letter expressed an intended as an acceptance or the closing or an agreement adds further minor suggestions or proposals such as “ship by Tuesday” “rush” “ship draft against bill of lading inspection allowed” or the like
How to analyze UCC Sec. 2-207 on the exam?
i. Issue 1: did a contract form under UCC 2-207(1)
1. Sub1: did definite and seasonable expression of acceptance occur?
a. Rule: dickered (haggled) for or essential terms must be the same; terms in acceptance cannot differ radically from the offer
2. Sub2: was the acceptance expressly made conditional on assent to the additional or different terms?
a. Rule: some courts say if the language in the form tracks the language in the statute, then the form is expressly conditional
b. Rule: must say something more on the form than “expressly made conditional on assent” you would have to call or talk to them, etc
c. Rule: other courts look at conduct; depends on the commercial context of the transaction (cmt 2). The question is whether the offeror could reasonably believe that the contact in which they acted lead to a contract being formed (Zemke v. Bush)
ii. Issue 2 & 3: are the terms of the agreement additional or different? And are the parties a merchant-merchant or merchant/non-merchant?
1. Merchant/non-merchant:
a. If merchant/non-merchant, then the additional or different terms are mere proposals to the agreement and require assent by both parties
2. Merchant – merchant:
a. If terms are additional then you look to 2-207(2)(a-c) to determine if the terms will be added to the contract. The terms will be added unless one of a, b, c or from subsection 2 applies (do an analysis of each on the exam)
i. A. materially alter contract
ii. B. offer limits acceptance to terms of offer
iii. C. notice of objection to them has been given or given within a reasonable amount of time
iv. If so, then must be expressly assented to
b. If terms are different then you analyze three things to determine how to treat them:
i. cmt 3: analyze them under 2-207(2). “whether or not additional terms will become part of the agreement depends upon the provisions of subsection (2). If they materially alter then they won’t be added unless both parties assent
ii. cmt 6: assume the offeror/ offeree already objected to these terms and “knock them out.” Missing terms supplied by article 2 (can look to industry custom when filler terms from article 2 say “reasonable”)
iii. CL: basically, like the first shot rule. Whoever sends a from first wins
iii. If subsection 1 does not apply, then use subsection 3. So if there is no contract that formed on paper than use 2. Article 2 is used to add in terms (same result as knock out rule, but DO NOT CALL SUBSECTION 3 KNOCK-OUT)
