ContContract Formation Flashcards
What is an offer?
An objective manifestation of a present intent to contract
How is an offer demonstrated?
- By a promise, undertaking, or a commitment;
- definite and certain terms; and
- communication to an offeree
What power does an offer create?
Power of acceptance in the offeree
What is an objective manifestation of intent?
the offer must give offeree a reasonable expectation that offeror is willing to enter into K;
Would a reasonable person believe the communication is an offer inviting acceptance?
What are required to satisfy “definite and certain terms required”?
Enough essential terms must be included to allow a court to enforce the K;
vague terms or terms of negotiation are not allowed;
What special definite terms does a real estate deal require?
- price
2. identification of land
What must an offer do to communicate to an offeree?
Offeree must know of the offer and have the power to accept it
Is an advertisement considered an offer?
Generally no unless highly specific as to quantity and clearly indicates who can accept.
Under the UCC, what must be certain or capable of being certain in the offer?
Quantity.
Also, no unreasonably disproportionate increase in quantity is allowed.
Are missing terms ok in the UCC offer?
Yes, if the parties intended to make a K and there is a reasonably certain basis for giving a remedy.
How may an offer be terminated?
An offer may be terminated by an act of a party or by an operation of law.
What are the three acts of parties that will terminate an offer?
- Revocation by the offeror
- rejection by the offeree
- lapse of time
What are the three operations of law that will terminate an offer?
- Death or insanity of either party
- destruction of proposed K’s subject matter
- supervening illegality
What is revocation of an offer?
An offeror may revoke her offer, which effectively terminates the offer and the offeree’s power of acceptance.
What are the two methods of revocation?
- unambiguous stmt by the offeror to the offeree
- offeree becomes aware of the offeror’s unambiguous conduct or statement indicating an unwillingness or inability to contract
When is revocation effective?
Upon receipt by the offeree.
At what point can an offer not be revoked?
After it’s been accepted.
When/what offers are irrevocable?
- option K
- UCC firm offers
- detrimental reliance by offeree
In a unilateral K, when does an offer become irrevocable?
Start of performance makes the offer irrevocable for a reasonable time to complete performance (note: start is beyond mere preparation).
What is the legal effect of a rejection by the offeree?
terminates the offer and the offeree’s power of acceptance
What are four methods of rejecting an offer?
- express rejection
- counter offer
- conditional acceptance
- acceptance with additional terms (CL only)
What happens when the offeree makes a counteroffer?
It terminates the original offer and becomes a new offer; bargaining is not a counteroffer.
When is a statement a counteroffer versus a bargain?
if response to an offer is a statement - counteroffer;
if response to an offer is question - bargaining
What is the effect of conditional acceptance?
It terminates the original offer and becomes a new offer
Implicated by terms like “if, only if, but, provided, so long as, on condition that.
What is the effect of acceptance with additional terms at CL?
Acceptance must mirror the offer; if it does not, it is a rejection
What is the effect of acceptance with additional terms under the UCC?
if both parties are merchants, additional terms are a seasonable expression of acceptance if they do not materially change the offer and the offeror does not object.
What is acceptance?
Clear expression of assent to the terms of the offer.
Common law follows what rule of acceptance?
The mirror image rule. cannot omit or add new terms.
Under the UCC, acceptance with additional terms is…
Valid unless the acceptance expressly requires assent to the different or additional terms.
Under the UCC when both parties are merchants, additional terms become part of the K unless
unless they materially change the offer OR
the offeror objects within a reasonable period of time.
How may a merchant accept an offer to buy goods?
a) providing a promise to ship goods (usually by written confirmation), or
b) promptly shipping conforming goods
What is the mailbox rule?
Offers and acceptances transmitted via mail or other similar methods become effective upon either dispatch or receipt.
When are offers effective?
upon receipt.
When are acceptances effective?
Upon dispatch.
If an offer stipulates that acceptance is not effective until received, when is the acceptance effective?
Upon receipt.
In an option K, when is acceptance effective?
Upon receipt.
If the offeree sends both a rejection and an acceptance, which controls?
The first to arrive.
Do the mailbox rules apply to revocation?
No. Revocation is only effective upon receipt.
When can an offeree accept by performance?
For unilateral K - complete performance
For bilateral K - by partial performance
(unless acceptance is limited by terms of the offer)
For a unilateral K, when is the offer accepted?
Complete performance.
In a unilateral k, is the offeree obligated to complete performance?
No. And failure to perform does not constitute breach.
For a unilateral K, when may an offer become irrevocable?
Maybe after start of performance until completion.
In a unialteral K, does the offeree have to give the offeror notice that he is starting performance?
No but must notify offeror within a reasonable time upon completion.
In a bilateral K, partial performance gives rise to…
acceptance. Offeree must make offeror aware of acceptance.
In an offer requiring acceptance by promise, when can it still be accepted by performance?
- the offeree begins to perform; and
2. the offeror learns that the offeree has started performance and acquiesces
What is consideration?
A bargained-for legal detriment incurred by each party to a K by promise, forbearance, or performance
What is a “bargained-for legal detriment?”
the promise must induce the detriment and the detriment must induce the promise.
what is a legal detriment?
obligation to do or refrain from doing something one would not otherwise be obligated to do or refrain from doing.
When can a pre-existing duty provide sufficient consideration?
Only when there is a new written promise to fulfill a debt obligation if the debt is barred by the SOL.
Courts may enforce a promissory estoppel if:
- promisor reasoably expects reliance by promisee
- promisee acts or refrains from acting such that his reliance is detrimental, and
- injustice will occur without enforcement of the promise
