Formation - Offer & Acceptance Flashcards
Offer?????
an offer requires a promise, terms, and communication to the offeree
generally revokable
Promise
a statement indicating a present intent to enter into a contract
Terms
CL - all essential terms MUST be provided (parties, subject matter, price, quantity)
UCC - the essential terms are the parties, subject matter, and quantity - court will gap fill any other missing terms [dont need PRICE]
Communication
must be communicated to the offeree
Ads generally NOT offers UNLESS
- specific AND
- limit who may accept the offer
Unilateral Contract
one in which the offeror makes a promise and the offeree must perform - can ONLY be accepted by complete performance
Bilateral Contract
Parties exchange PROMISES; can be accepted by a promise OR by the beginning of performance
Irrevocable Offers
CL - option contracts
UCC - firm offer
Option Contracts
an offer where the offeror promises to hold the offer open for a certain period of time
offeree MUST pay consideration to the offeror to hold the offer open
Firm Offer
an offer in
- writing
- where the offeror is a merchant AND
- promises to hold the offer open for a certain period of time (MAX 90 days)
**no consideration required
How to terminate an offer?
- revocation of offer
- rejection by offeree
- counter-offer by the offeree
- lapse of time
- death/mental incapacity of the offeror
- Destruction/illegality
When is revocation effective?
when RECEIVED - mailed revocation NOT effective until received
Acceptance - Definition
the objective manifestation by the offeree to be bound by the terms of the offer
How to accept?
Any reasonable means off acceptance is allowed, UNLESS the offer limits the means of acceptance
Can silence be acceptance?
Generally, no, UNLESS the offeree has reason to believe that silence will constitute an acceptance
Mirror Image Rule
CL
Acceptance MUST mirror the terms of the offer; any changes/additions to the terms constitute a rejection of the original offer and a counter-offer
Requirements of a valid contract
- manifestation of mutual assent
- consideration
- lack of valid defenses
Promissory estoppel
when offeree
1. reasonably and
2. detrimentally
relies on offer
MAY become irrevocable
Partial Performance (uni and bi)
For all Ks, offeree must have knowledge of offer when performance begins
U - offeror CANNOT revoke once offeree has begun performance
B - commencement of performance operates as promise to render complete performance
How to revoke a general offer
revoacable ONLY by notice given at, at least the same level of publicity as offer
effective even if potential offeree act in reliance on offer
How to reject an offer
Offeree clearly conveys to offeror that they no longer intend to accept the offer
Function of a counteroffer by offeree
acts as a rejection of original offer and creates a new offer
How can a seller accept a buyer’s request to ship goods?
- seller can accept by a promise to ship OR
2. prompt shipment of goods
What are nonconforming goods that are shipped?
They are
- an acceptance AND
- a breach (UNLESS seller seasonably notifies buyer that goods are an accommodation - counteroffer)
What can buyers do about nonconforming goods?
Buyer may accept or reject the non-conforming goods
Mailbox Rule - what does it apply to?
Applies only to acceptance - and usually only bilateral K
Mailbox Rule - Acceptance - when effective?
Effective when SENT, unless offer provides otherwise
Mailbox Rule - Rejection following acceptance
Acceptance will control EVN IF offeror receives rejection first
If offeror detriminally relied on rejection THEN offeree estopped from enforcing K
Mailbox Rule - Acceptance following rejection
Mailbox Rule Does NOT apply
First one received will prevail (in possession of offeror/deposited in mailbox)
Offeror need not actually RED the received communication
Mailbox Rule - Revocation
Effective upon receipt
Mailbox Rule - Options and other irrevocable offers
Mailbox rule does NOT apply
Acceptance must be received by offeror by a certain date or before offer expires
Notice of Acceptance for Uni K - required?
Offeree NOT required to give notice after completing performance UNLESS
- offeror wouldn’t learn of performance with reasonable certainty and promptness OR
- offer requires notice
What happens Uni K requires notice of acceptance but it is not given?
In general, the offeror’s duty is discharged, UNLESS
- offeree exercises reasonable diligence to give notice OR
- offeror learns of performance w/in reasonable time
Notice of Acceptance for Bi K - required?
Yes, offeree MUST give notice of acceptance
- Mailbox rule: acceptance valid when sent
- UCC: if acceptance is made by beginning performance, notice is REQUIRED w/in a reasonable time; failure to give notice results in offer’s lapse
Does UCC have a mirror-image rule?
No, acceptance containing additional or different terms generally treated as acceptance (battle of the forms)
UCC Acceptance - 1 or both parties NOT merchants
- a definite and seasonable expression of acceptance
- sent w/in a reasonable time
IS usually acceptance of original offer, and - new/different terms are treated as proposed additions to the K that MUST be separately accepted by offeror
UCC Acceptance - Both Parties Merchants
Battle of the forms
Additional terms are automatically included in the K UNLESS
- term materially alters original K (surprise or hardship)
- offer expressly limits acceptance to terms of the offer, OR
- Offeror objects to new terms w/in a reasonable time after notice of new terms is received
Exception met = ORIGINAL terms of offer control
Knock-out Rule
UCC
1 or both merchants????
different terms in offer/acceptance nullify each other, and court uses Article 2’s gap-filling provisions to patch holes in K
UCC: What happens when offer and acceptance differ too much to create a contract but parties begin to perform anyways?
UCC allows for a contract to be recognized w/the following terms:
- any terms actually agreed upon in the parties’ writing, and
- any supplementary terms filled in by the UCC
Offer
Objective manifestation of a willingness by offer or to enter into agreement that creates power of acceptance in offeree
What 3 things are required to form a binding K?
- Manifestation of mutual assent
- Consideration
- Lack of valid defenses
What is required for intent of an offer?
Only an offer if:
- Offeree could reasonably interpret it as an offer
- Expresses present intend of a person to be legally bound by a K
