Contracts Restatements

Question 1

§ 24 : Offer Defined

Answer 1

An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

Question 2

§ 35 : The Offeree’s Power of Acceptance

Answer 2

(1) An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance to the offer.
(2) A contract cannot be created by acceptance on an offer after the power of acceptance has been terminated in one of the ways listed in § 36.

Question 3

§ 36 : Methods of Termination of the Power of Acceptance

Answer 3

(1) An offeree’s power of acceptance may be terminated by:
(a) rejection or counter-offer by the offeree, or
(b) lapse of time, or
( c ) revocation by the offeror, or
(d) death or incapacity of the offeror or offeree.
(2) In addition, an offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.

Question 4

§ 38 : Rejection

Answer 4

(1) An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
(2) A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.

Question 5

§ 41: Lapse of Time

Answer 5

(1) An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
(2) What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made.
(3) Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in § 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.

Question 6

§ 42 : Revocation by Communication from Offeror Received by Offeree

Answer 6

An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.

Question 7

§ 43 : Indirect Communication of Revocation

Answer 7

An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the propose contract and the offeree acquires reliable information to that effect.

Question 8

§ 37 : Termination of Power of Acceptance Under Option Contract

Answer 8

Notwithstanding §§ 38-49, the power of acceptance under an option contract is not terminated by rejection or counter-offer, by revocation, or by death or incapacity of the offeror, unless the requirements are met for the discharge of a contractual duty.

Question 9

§ 45 : Option Contract Created by Part Performance or Tender

Answer 9

(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer

Question 10

§ 87 : Option Contract

Answer 10

(1) An offer is binding as an option contract if it:
(a) is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
(b) is made irrevocable by statute
(2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does not induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice

Question 11

§ 50 : Acceptance of Offer Defined; Acceptance by performance; Acceptance by Promise

Answer 11

(1) Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
(2) Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise.
(3) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.

Question 12

§ 30 : Form of Acceptance Invited

Answer 12

(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing specified act, or may empower the offeree to make a selection of terms in his acceptance.
(2) Unless otherwise indicated by the language or circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.

Question 13

§ 32 : Invitation of Promise or Performance

Answer 13

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.

Question 14

§ 63 : Time When Acceptance Takes Effect

Answer 14

Unless the offer provides otherwise,

(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; but
(b) an acceptance under an option contract is not operative until received by the offeror.

Question 15

§ 64 : Acceptance by Telephone or Teletype

Answer 15

Acceptance given by telephone or by other medium of substantially instantaneous two-way communication is governed by the principles applicable to acceptances where the parties are in the presence of each other.

Question 16

§ 54 : Acceptance by Performance; Necessity of Notification to Offeror

Answer 16

(1) Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a notification.
(2) If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless:
(a) the offeree exercises reasonable diligence to notify the offeror of acceptance, or;
(b) the offeror learns of the performance within a reasonable time, or
( c ) the offer indicates the notification of acceptance is not required.

Question 17

§ 59 : Purported Acceptance Which Adds Qualifications

Answer 17

A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter-offer.

Question 18

§ 60 : Acceptance of Offer Which States Place, Time, or Manner of Acceptance

Answer 18

If an offer prescribes the place, time or manner of acceptance its terms in this respect must be complied with in order to create a contract. If an offer merely suggests a permitted place, time or manner of acceptance, another method of acceptance is not precluded.

Question 19

§ 61 : Acceptance Which Requests Change of Terms

Answer 19

An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.

Question 20

§ 69 : Acceptance by Silence or Exercise of Dominion

Answer 20

(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reaosn to know that they were offered with the expectation of compensation
(b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction and the offeree is remaining silent and inactive intends to accept the offer.
( C ) Where becasue of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does not any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if rarified by him.

Question 21

§ 20 : Effect of Misunderstanding

Answer 21

(1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
(a) neither party knows or has reason to know the meaning attached by the other.
(b) each party knows or each party has reason to know the meaning attached by the other

(2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if:
(a) that parties does not know of any different meaning attached by the other and the other knows the meaning attached by the first party; or
(b) that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party.