Formation- Offer And Acceptance Flashcards
What are the requirements for the formation of a contract?
- ) offer
- ) acceptance
- ) consideration
- ) no defense
What is present intent?
Offer must be made with serious intent (objective intent)
What are the requirements of a valid offer?
Present Intent
Definite terms
Communication of offer
What does “definite terms” mean?
Under common law- definite and certain terms require identification of the parties, the subject matter, the price stated, and the time for performance
What is “communication of offer”
Must be communicated by offeror and received by offeree
What is rejection
An inquiry is not a rejection
A rejection is effective when it is received
When is an acceptance of an offer effective?
- 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
What is the mirror image in common law
In common law, Any deviation in the terms of acceptance from those in the offer constitutes a counteroffer, not an acceptance
What is the UCC article 2 language of acceptance?
Depends on whether they are merchants or non merchants
- ) for both it needs a definite expression of acceptance that does not change any terms in the contract
- )for non merchants, if there is a definite statement of acceptance a contract is formed
What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are merchants?
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
What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are nonmerchants?
There is a contract, but without the additional terms.
When does the acceptance of an unilateral offer occur?
It takes place upon completion of the act required by the offeror
Describe the requirements of an offer
- 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
List the ways an offer can be terminated by the act of the parties to the offer.
- )Revocation
- )Rejection
- )Counteroffer
List the requirements of a firm offer for the sales of goods.
- )Offeror is a merchant.
- )Offeror is an authenticated record.
- )Assures offer will remain open for a stated period of time (without consideration not to exceed three months, regardless).
List the ways in which an offer can be terminated by operation of law
- )Lapse of time
- )Death or insanity of either party (unless the offer is irrevocable)
- )Destruction of the specific subject matter of the contract
- )Intervening illegality
Can silence be considered a form of acceptance to an offer?
Generally it is not acceptance unless the offeree’s actions indicate an attempt to accept or the offeree has the duty to reject.
What happens under common law if there are additional terms in an acceptance?
The acceptance is a counteroffer and a rejection
Describe the general rule of revocation.
An offer can be revoked at any time before acceptance unless the offer is irrevocable
Define “option contract.”
An option contract is a distinct contract in which the offeree gives consideration to keep the offer open.
When are advertisements considered offers?
Advertisements are generally not offers unless they only invite acceptance.
When is a revocation by the offeror effective?
When the offeree knows of or receives the revocation
What conditions must exist for the acceptance of a bilateral offer to take place?
Acceptance must be unequivocal and communicated to the offeror
List the three types of irrevocable offers.
- )Options
- )Sales of goods firm offers
- )Offers irrevocable by estoppe
