Formation 2

Question 1

How can an offer be terminated?

Answer 1

Counter-offer;
Death;
Incapacity
Lapse;
Rejection; or
Revocation

Question 2

When can an offer be terminated?

Answer 2

Any time before acceptance

Question 3

What types of offers are irrevocable?

Answer 3

Option contracts;
Firm offers;
When there is detrimental reliance;
When offeree has started performance on a unilateral contract

Question 4

Define

option contract

Answer 4

Makes an offer irrevocable if:

Offeror promised to keep offer open for a specific period of time; and
Promise was supported by consideration

Question 5

Define

firm offer

Answer 5

Offer is irrevocable (for no more than 3 months) under the UCC if:

Offeror is a merchant;
Offer is signed, in writing; and
Expressly provides that the offer will be held open

Question 6

Does the offeree need to know about the offer to accept?

Answer 6

Yes, otherwise no power of acceptance was created

Question 7

Who prescribes the method by which the offer can be accepted?

Answer 7

Offeror.

If no method specified, can be accepted by any reasonable method.

Question 8

How does one accept a unilateral contract?

Answer 8

Full performance; and
Notice to offeror that you accepted within a reasonable time frame after performance starts
⚠️ Note: partial performance does not constitute acceptance (but you may still be able to argue detrimental reliance or quasi-contract)

Question 9

What does a counteroffer function as?

Answer 9

rejection + new offer

Question 10

Define

mirror image rule

(common law)

Answer 10

Acceptance must be a mirror image of every single term of the offer.

If any part of the terms are different, it will function as a counter-offer and rejection.

Question 11

Under UCC §2-207, what happens if an acceptance contains “additional or different” terms from the original offer if both parties are merchants?

Answer 11

The terms will automatically become part of the contract, unless:

the terms materially change the contract;
the offeror has already objected to the additional terms, or objects within a reasonable time frame; or
the offer was explicitly limited to the original terms

Question 12

Under UCC §2-207, what happens if an acceptance contains “additional or different” terms from the original offer if both parties are NOT merchants?

Answer 12

Additional terms are not incorporated, but the acceptance is still valid