Formation of Contracts - Acceptance Flashcards

1
Q

What is an acceptance ?

A

Objective manifestation by the offeree to be bound by the terms of the offer

  • Must be communicated to the offeror
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2
Q

Acceptance of Bilateral K

A

Exchange of promises the make both enforceable

  • Can be accepted by a retrun promise or by starting performance
  • Starting to perf. = promise to complete perf.
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3
Q

Acceptance of Unilateral K

A

Promise to do somthing by one party in retrun for an act of the other party

  • Acceptance by complete perf.
  • Starting perf. is not enough, but it will make the offer irrevocable for reas. pd. of time to complete perf.
  • Offeree must be aware of the offer before acting
  • Offeree is NOT bound to complete perf.
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4
Q

Means of Acceptance

A

Offeree can accept in any reasonable manner/means

  • Unless offeror specifies a particular manner
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5
Q

Acceptance by Silence

A

Not acceptance unless:

  1. offeree has reas. to believe offer could be accepted by silence or
  2. prev. dealings make it reas. to believe that offeree must notify offeror if he doesn’t intend to accept
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6
Q

Acceptance by Shipment of Goods

A

Buyer’s request that goods be shipped is inviting acceptance either by:

  1. seller’s promise to ship or
  2. by prompt shipment of goods
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7
Q

Shipment of nonconforming goods

A

Both acceptance and a Breach & seller is liab. for any damage caused to buyer as a result of the breach

  • Unless seller seasonably notifies buyer that goods are an accommodation (counteroffer)
    • Buyer may then accept (forming a K) or reject (no K formed) the nonconforming goods
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8
Q

Mailbox Rule

A

Acceptance that is mailed w/in allotted response time is effective when sent (not upon receipt)

  • Unless offer provides otherwise
  • Must be properly addressed & include correct postage
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9
Q

Mailbox Rule - Rejection then acceptance

A

MR doesn’t apply

  • 1st one received by offeror will prevail
  • Offeror doesn’t need to actually read the communication for it to prevail
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10
Q

Mailbox Rule - Acceptance then Rejection

A

Acceptance controls even if offeror receives rejection first

BUT if offeror detrimentally relies on rejection, then offeree is estopped from enforcing the K

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11
Q

Mailbox Rule - Revocation

A

Effective when received

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12
Q

Mailbox rule - Irrevocable Offer

A

MR doesn’t apply

  • acceptance must be received by offeror b/f offer expires
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13
Q

Unilateral K - Notice

A

Offeree is not required to give notice after completing performance, unless:

  1. Offeror wouldn’t learn of perf. w/ reas. cert. & promptness OR
  2. Offer requires notice
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14
Q

Unilateral K - Effect if Notice is required but it’s not provided

A

Offeror’s duty is discharged, unless:

  1. Offeree exercises reas. dilligence to give notice,
  2. Offeror learns of perf. w/in reas. time, OR
  3. Offer indicates notice of acceptance is not required
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15
Q

Bilateral K - Notice

A

Offeree must give notice of acceptance

  • Mailbox Rule - acceptance valid when sent (even if offeror hasn’t received it)
  • UCC - If acceptance is made by beginning perf., notice is required within a reas. time
    • Failure to give notice results in offers lapse
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16
Q

Effect of additional/Different terms - Common Law

A

Mirror Image Rule - Acceptance must mirror the offer, and any variation results in a rejection & counteroffer

  • Conditional acceptance - Terminates the offer & acts as a new offer from the original offeree
17
Q

When does acceptance occur under the common law?

A
  1. Acceptance mirrors the terms of the offer AND
  2. The acceptance is communicated to the offeror
18
Q

Effect of Additional Terms under the UCC if one or both parties are NOT merchants ?

A

Additional terms are treated as a proposal for addition to the K

  • Must be seperately accepted to become part of the K
19
Q

Effect of Additional Terms under UCC if BOTH parties are merchants

A

Battle of the Forms

Additional Terms auto. included in to K, Unless:

  1. Term materially alters the orig. K
  2. Offer expressly limits acceptance to terms of the offer, OR
  3. Offeror objects to new terms w/in reas. time after notice of new terms is received

If any of these are met, original terms of offer control

20
Q

Under the UCC, what is a term that materially alters a contract?

A

Terms that would result in surprise or hardship if incorp. w/out the express consent of the other party

  • Warranty Disclaimers
  • Clauses that materially shorten the deadline for raising complaints
  • Clauses that change industry std. or past course of dealing
21
Q

Under the UCC, what must the parties be for non-morror acceptance to be binding?

A

Both parties must be merchants

  • If one is a consumer, then the acceptance is merely a proposal
22
Q

Effect of Different Terms Under UCC if BOTH parties are Merchants

A

Knock Out Rule - Different terms in the offer/acceptance nulify each other & court uses Article 2’s gap filling provisions to patch holes in the K

23
Q

What is the effect of Additional/Different Terms when the UCC K is created by conduct?

A

If offer and purported acceptance differ too much to create a K but the parties begin to perf. anyway

  • UCC allows for K to be recognized with the following terms:
    • Any term actually agreed on in the parties writing AND
    • Any supplementary terms filled in by the UCC
24
Q

What is the legal effect of the agreements that consumers find once they open the boxes or packaging containing their goods ?

A

They are mere proposals that the consumer can accept or reject

25
Q

Reserve Auction

A

Actioneer can w/draw the goods any time b/f she announces completion of the sale

  • An auction is with reserve unless specifically announces as no reserve
  • Bidder can retract her bid until the auctioneer announces the completion of the sale
  • Retraction doesn’t revive earlier bid
26
Q

No-reserve auction

A

After the auctioneer calls for bids on the goods, the goods can’t be w/drawn unless no bid is received w/in a reas. time

  • Bidder can retract her bid until the auctioneer announces the completion of the sale
  • Retraction doesn’t revive earlier bid
27
Q

Auction - When the Seller Bids

A

The Winning bidder may avoid the sale OR take the goods at the price of the last good-faith bid

  • When auctioneer knowingly acceptsa bid by the seller OR
  • on her behalf, OR
  • procures a bid to drive up the price of goods