Chapter 10- Mutual Assent Flashcards
Essentials of an offer
1) communicated as intended
2) manifest intent to enter into a binding contract
3) definite and certain
Offer
The intent of the parties to be bound to a contract is determined by an objective standard. What whatever reasonable person do? In order for an offer to be valid all essentials must be present.
Communicated As Intended
a manner intended by offeror
As authorized by offeror
Usually in words, unless there is an established course of dealing between the parties.
- Manifest Intent to enter into a binding contract
Determined objectively from the words or conducts of the parties
NOT:
- Jokes
- Excited Utterances
- Prelimary Negotiations
- Auctions
- General Advertisements
- Definite and Certain
Must have
1) Clear subject matter
2) distinct parties
3) clear quanities
4) clear price
UCC Rule
Quanities are REQUIRED. But other missing factors such as price can be understood through a course of dealing
- may be considered even if vague
-must have remedy
Special Cases: Output Contracts, Requirement Contracts
Duration of Offer
An offer is valid until offeree accepts or offer is terminated
How are Offers Terminated?
1) Lapse of time
2) Revocation
3) Rejection
4) Counteroffer
5) Death or incompetency
6) Destruction of subject matter
7) subsequent illegality of the type of contract
1) Lapse of time
Unless specific the offer is open for a reasonable amount of time. 3 months
2) Revocation
The offeror May cancel or revoke an offer at any time prior to its acceptance. If the offer or originally promises that the offer will be open for 30 days but wants to terminate after five days they may do so prior to acceptance by notification to the offeree.
3 limitations to revocation.
1) Option Contract: a contract where the offeror is bound to hold open the contract. but it must comply with all the requirements of a contract ( including Consideration)
2) Firm Offer Under the code: the code, provides that a merchant must keep the offer open for stated period (not more than 3 months.) Must be in signed writing. Merchant is a person who 1) is a dealer in a type of goods, 2) Has skills/knowledge in goods, 3) employs angent/ broker who has skill.
3) CISG Rule for Irrevocable Offers: any promise is good enough to make an offer irrevocable.
4) Rejection
Oferee has right to accept/reject formally or wait until lapse of time.
Once rejected cannot re-accept
A communicated rejection terminates the power of acceptance.
From the moment the offeror RECEIVES the rejection the offeree may no longer accept.
5) Counter-Offer
=Rejection+New Offer
6) Death or incompetence (of either party)
Does not include Option Contracts
7) Destruction of Subject Matter
Sell car, signs contract, before delivery car explodes, contract is void
8) Subsequent Illegality
If the subject of the contract is illegal: contract is discharged
Acceptance
Must be communicated, Unless:
1) Unilateral Contract
2) Parties agree, acceptance will be silent
Silence as Acceptance
- General Rule, Silence IS NOT A valid form of acceptance
Unless
1) causes harm or damage
2) Merchandise example..
Effective Moment
Rejection, Counteroffer, & Revocation are accepted UPON RECEIVED
An acceptance is effective upon dispatch, unless indicated by the original offer ( form of dispatch/ specifies acceptance ineffective until received.), or an acceptance following a previous rejection
Variant Acceptance
Acceptance that has been modified.
Any acceptance that has been modified is ineffective, and in fact the counter offer. Therefore is not a valid acceptance and does not create a contract.
Exceptions to the mirror image rule.
The code modified the mirror image rule, if both parties are merchants, the One merchant says to the other an offer and the offeree excepts however adds to it then the contract may be valid, as deemed by the courts.
Battle Of the Forms
The code attempts to alleviate the mirror image rule by focusing on the intent of the parties. As long as the merchant did not expressively state that there conditions are conditional upon acceptance of their terms, then a contract is formed
