Contracts - ACCEPTANCE

Question 1

ACCEPTANCE

Answer 1

Language of the offer controls what constitutes acceptance

e.g. if say “you can accept this offer only by reporting for work Monday” - can’t email back and say “I accept” to accept - must do what offer says

BUT unless the offer specifically provides that it may be accepted only through performance, it will be construed as an offer to enter into a BILATERAL contract and may be accepted either by PROMISE to perform OR by BEGINNING PERFORMANCE

Generally, acceptance of an offer must be communicated to the offeror

Question 2

Acceptance of a BILATERAL CONTRACT

Answer 2

starting performance IS ACCEPTANCE (and therefore carries with it an implied promise to finish the job)

e.g. House offers me $10k to paint his house and doesn’t specify how to accept - so bilateral - I start painting the house, I have accepted and am bound to finish under the contract

Question 3

Acceptance of a UNILATERAL CONTRACT

Answer 3

ACCEPT BY COMPLETING PERFORMANCE
Starting performance is NOT acceptance (so there is no obligation to finish the job) COMPLETING performance is acceptance

e.g. House’s offer states that I can ONLY ACCEPT by painting the house [unilateral] so when I start painting I have not accepted yet and I am not bound to finish painting the house

once I start painting, on MBE, House cannot revoke, but in NY*** (DISTINCTION) house can still revoke until I complete performance

Question 4

Improper Performance

Answer 4

At common law, this is considered simultaneous ACCEPTANCE and BREACH

e.g. house offers me $10,000 to paint house white and I paint it orange. I have accepted and breached

Article 2 (sale of goods): Simultaneous acceptance and breach UNLESS the seller is sending the goods as an ACCOMMODATION to buyer

Question 5

ACCOMMODATION

Answer 5

under article 2, a seller can send a note along with nonconforming goods that says the goods are being sent as an “ACCOMMODATION” in which case this is NOT treated as an acceptance and breach, but instead is a counteroffer

buyer can either accept, in which case this is an acceptance of counteroffer and there is a contract, or reject the goods

Question 6

OFFEREE’s SILENCE

Answer 6

Generally, Offeree’s silence is NOT an acceptance

e.g. I offer to sell you my Honda for $5,000. and say “if I don’t hear from you by 9 tonight, you’ve accepted.” - if you say nothing you haven’t accepted - offeror can’t do this

Offeree’s Silence only operates as an acceptance IF the offeree silently takes offered benefits OR if prior dealings suggest silence is acceptance (in which case, offeree is obligated to let offeror know he isn’t accepting)

Question 7

Mailbox Rule

Answer 7

General Rule: Acceptance is effective when MAILED

doesn’t matter if acceptance letter gets lost in the mail

However, if offer specifies “your offer must be received by may 9” offer controls and overrides mailbox rule - must be received

Question 8

Mailbox Rule and Option Contracts

Answer 8

Mailbox Rule DOES NOT APPLY to option contracts

e.g. if option says offer stays open until May 9, acceptance MUST BE RECEIVED by may 9 or offer lapses

Question 9

What if Offeree Sends both an acceptance and a rejection?

Answer 9

If rejection is sent first, IT IS A RACE - whichever gets there first is effective

If Acceptance sent first, MAILBOX RULE, so acceptance effective
however, if rejection gets there first and offeror RELIES on it, offeree will be estopped from enforcing contract if changes his mind