Formation: acceptance

Question 1

Bilateral offers

Answer 1

For bilateral offers—and when it is ambiguous whether the offer is bilateral or unilateral—acceptance can either be by performance or a return promise.

Acceptance must be in the manner specified in the offer, although under the UCC, shipment of the wrong goods is regarded as an acceptance and a breach.

Question 2

Mailbox rule

Answer 2

The mailbox rule applies unless the offeror conditions acceptance on timely receipt.

But acceptance is not effective when posted if:

• The offeree sends back something else first—e.g., a rejection or counteroffer;
• The communication is not an acceptance; or
• The acceptance is for an option contract.

Question 3

Knowledge of the offer

Answer 3

Acceptance is only effective if the person accepting knew about the offer, even if an open-to-all offer.

Question 4

Implied-in-fact contract

Answer 4

An implied-in-fact contract exists when:

(1) A person’s assent to an offer is inferred from the person’s conduct; and
(2) The person has reason to know his conduct may be construed as assent.

Question 5

Subjective intent

Answer 5

Although in contract law, intent is generally determined by an objective standard and not by the subjective intent or belief of a party:

• when an offeree is aware of the other’s party’s subjective intent not to enter into a contract,
• the offeree’s agreement to enter into a contract does not constitute a valid acceptance.

Question 6

UCC: buyer acceptance

Answer 6

Under the UCC, a buyer accepts goods by:

(a) expressly stating acceptance;
(b) using the goods; or
(c) failing to reject the goods.

A buyer may revoke an acceptance of goods if the nonconformity:

(1) substantially impairs their value to the buyer; and
(2) the buyer accepted the goods on the reasonable belief that the seller would cure the nonconformity; but
(3) the seller has failed to do so.