Formation- Offer And Acceptance

Question 0

What are the requirements for the formation of a contract?

Answer 0

1. ) offer
2. ) acceptance
3. ) consideration
4. ) no defense

Question 1

What is present intent?

Answer 1

Offer must be made with serious intent (objective intent)

Question 2

What are the requirements of a valid offer?

Answer 2

Present Intent
Definite terms
Communication of offer

Question 3

What does “definite terms” mean?

Answer 3

Under common law- definite and certain terms require identification of the parties, the subject matter, the price stated, and the time for performance

Question 4

What is “communication of offer”

Answer 4

Must be communicated by offeror and received by offeree

Question 5

What is rejection

Answer 5

An inquiry is not a rejection

A rejection is effective when it is received

Question 6

When is an acceptance of an offer effective?

Answer 6

• If sent by authorized medium: effective when delivered to the medium
• If sent by unauthorized medium: effective when received by offeror, provided that the offer is still open

Question 7

What is the mirror image in common law

Answer 7

In common law, Any deviation in the terms of acceptance from those in the offer constitutes a counteroffer, not an acceptance

Question 8

What is the UCC article 2 language of acceptance?

Answer 8

Depends on whether they are merchants or non merchants

1. ) for both it needs a definite expression of acceptance that does not change any terms in the contract
2. )for non merchants, if there is a definite statement of acceptance a contract is formed

Question 9

What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are merchants?

Answer 9

There is a contract with the additional terms unless those terms are material, are objected to, or if the offer was specifically limited to its terms

Question 10

What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are nonmerchants?

Answer 10

There is a contract, but without the additional terms.

Question 11

When does the acceptance of an unilateral offer occur?

Answer 11

It takes place upon completion of the act required by the offeror

Question 12

Describe the requirements of an offer

Answer 12

• Objective intent to contract
• Under common law: subject matter, price, payment terms, time for performance, and so on
• Under the Uniform Commercial Code (UCC): subject matter and quantity if more than one
• UCC will supply the remaining terms if not in the offer

Question 13

List the ways an offer can be terminated by the act of the parties to the offer.

Answer 13

1. )Revocation
2. )Rejection
3. )Counteroffer

Question 14

List the requirements of a firm offer for the sales of goods.

Answer 14

1. )Offeror is a merchant.
2. )Offeror is an authenticated record.
3. )Assures offer will remain open for a stated period of time (without consideration not to exceed three months, regardless).

Question 15

List the ways in which an offer can be terminated by operation of law

Answer 15

1. )Lapse of time
2. )Death or insanity of either party (unless the offer is irrevocable)
3. )Destruction of the specific subject matter of the contract
4. )Intervening illegality

Question 16

Can silence be considered a form of acceptance to an offer?

Answer 16

Generally it is not acceptance unless the offeree’s actions indicate an attempt to accept or the offeree has the duty to reject.

Question 17

What happens under common law if there are additional terms in an acceptance?

Answer 17

The acceptance is a counteroffer and a rejection

Question 18

Describe the general rule of revocation.

Answer 18

An offer can be revoked at any time before acceptance unless the offer is irrevocable

Question 19

Define “option contract.”

Answer 19

An option contract is a distinct contract in which the offeree gives consideration to keep the offer open.

Question 20

When are advertisements considered offers?

Answer 20

Advertisements are generally not offers unless they only invite acceptance.

Question 21

When is a revocation by the offeror effective?

Answer 21

When the offeree knows of or receives the revocation

Question 22

What conditions must exist for the acceptance of a bilateral offer to take place?

Answer 22

Acceptance must be unequivocal and communicated to the offeror

Question 23

List the three types of irrevocable offers.

Answer 23

1. )Options
2. )Sales of goods firm offers
3. )Offers irrevocable by estoppe

Question 24

When are preliminary negotiations considered offers?

Answer 24

Preliminary negotiations are generally not offers unless such negotiations include price lists, solicitation of bids, and auctions with reserve