Ch 12 The Agreement: Offers and Acceptances Flashcards
Meeting of the Minds
☑ Offer ☑ Acceptance
☐ Consideration ☐ Legality ☐ Capacity ☐ Consent☐ Writing
offer: An act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms
offeror: The person who makes an offer
offeree: The person to whom an offer is made
Two questions determine whether a statement is an offer:
* Do the offeror’s words and actions indicate an intention to make a bargain?
* Are the terms of the offer reasonably definite?
Statements That Usually Do Not Amount to Offers
(Invitations to Bargain, Price Quotes, Letters of Intent, Advertisements, Auctions)
- An invitation to bargain is not an offer.
- A price quote is generally not an offer.
- letter of intent: A letter that summarizes negotiating progress
- An advertisement is generally not an offer.
-consumer protection statute: Laws protecting consumers from fraud. - Placing an item up for auction is not an offer—it is merely a request for an offer.
Problems with Definiteness
The terms of the offer must also be definite
examples*
The UCC and Open Terms
(Gap-Filler Provisions)
In Chapter 11, we introduced the Uniform Commercial Code (UCC). Article 2 of the UCC governs contracts when the primary purpose is a sale of goods. Remember that goods are moveable, tangible objects. Usually, UCC provisions are not significantly different from common law rules.
- Open Price
- Output and requirements provisions
-output contract: Obligates the seller to sell all of his output to the buyer, who agrees to accept it
-requirements contract: Obligates a buyer to obtain all of his needed goods from the seller
Termination of Offers
(Termination by Revocation, Making Contracts Termporarily Irrevocable, Termination by Rejection, Termination by Expiration, Termination by Operation of Law)
- Term by Revocation: An offer is revoked when the offeror “takes it back” before the offeree accepts
- Making Contracts Temporarily Irrevocable
—Some offers cannot be revoked, at least for a time
-Option Contract (All Types of Contracts).
. The offeror may not revoke an offer during the option period.
-Firm Offer (UCC Contracts Only). - Term by Rejection
-If an offeree rejects an offer, the rejection immediately terminates the offer.
counteroffer: A different proposal made in response to an original offer
A counteroffer is a rejection. . - Term by Expiration
-When an offer specifies a time limit for acceptance, that period is binding.
-If the offer specifies no time limit, the offeree has a reasonable period in which to accept. - Term by Operation of Law
- If an offeror dies or becomes mentally incapacitated, the offer terminates automatically and immediately.
- Destruction of the subject matter terminates the offer.
Acceptance
12-2, pg
the offeree must say or do something to accept
Mirror Image Rule
Was it sensible to deny the professor a job over a mere 14-day difference? Sensible or not, that is the law.
mirror image rule: Requires that acceptance be on precisely the same terms as the offer
UCC and the Battle of Forms
(Additional or Different Terms)
An offeree who accepts may include in the acceptance terms that are additional to or different from those in the offer
Additional terms are those that bring up new issues,
In three circumstances, the additional terms in the acceptance do not become part of the contract:
-If the original offeror insisted on its own terms.
-If the additional terms materially alter the original offer.
-If the offeror receives the additional terms and promptly objects to them.
+Different terms are those that contradict terms in the offer.
+The majority of states hold that different (contradictory) terms cancel each other out.
Acceptance Online: Wrap Agreements
- Click wrap: agreements display the proposed terms on screen and require users to accept them by clicking an “The “I Agree” button on the Amazon shopping website” button.
- Browsewraps are a type of online contract in which websites seek consent by placing a hyperlink on the Web page.
- Hybridwrap contracts combine elements of clickwraps and browsewraps and have three distinguishing features. First, the terms of the agreement are not visible, but rather accessible through a hyperlink. Second, adjacent to the hyperlinked terms is a click-to-consent button, usually labeled “The “Continue” button on the Amazon shopping website.” or “The “Place Your Order” button on the Amazon shopping website..” Third, hybridwraps include a notice informing the user that, by clicking the button, the user is agreeing to the terms of the hyperlinked agreement.
Communicatio of Acceptance
(Method and Manner of Acceptance, Time of Acceptance: The Mailbox Rule)
- Method and Manner of Acceptance
-If an offer demands acceptance in a particular method or manner, the offeree must follow those requirements.
-If the offer does not specify a type of acceptance, the offeree may accept in any reasonable manner and method. - Time of Acceptacne: The Mailbox Rule
-An acceptance is generally effective upon dispatch, meaning the moment it is communicated and out of the offeree’s control.
-Once an email or text has been sent, it is assumed to have been received by the intended recipient—whether or not they are opened or read.
mailbox rule:Acceptance is generally effective upon dispatch; terminations are effective when received
Example:
On Monday morning, Masako faxes her offer to Eric.
On Monday afternoon, Eric writes, “I accept” on the fax, and Masako mails a revocation of her offer.
On Tuesday morning, Eric mails his acceptance.
On Thursday morning, Masako’s revocation arrives at Eric’s office.
On Friday morning, Eric’s acceptance arrives at Masako’s office.
Outcome?
Eric has an enforceable contract. Masako’s offer was effective when it reached Eric. His acceptance was effective on Tuesday morning, when he mailed it. Nothing that happens later can “undo” the contract.
The mailbox rule is the default rule for determining the exact time at which an offer becomes a contract.
Ch Conclusion
The law of offer and acceptance can be complex
