II. Mutual Asset--Offer and Acceptance

Question 1

Generally

Answer 1

Must have an offer and acceptance–mutual assent

Question 2

Questions for determining whether there was an offer

Answer 2

Must create a reasonable expection in the offeree that hte offeror is willing to enter into a contract on the basis of the offered terms

1. Was there an expression of a promise, undertaking or commitment to enter into a contract?
2. Was there certainty and definiteness in the essentail terms?
3. Was tehre communication of the above to the offeree

Question 3

Promise, Undertaking or Commitment

Answer 3

must contain one of the three rather than a mere invitation to beging negotations. MUST BE INTENT to ener contract

• Language: Must show that an offer was or was not intended
• Surrounding Circ: was it in jest?
• Prior Practice and Relationshp: have they done this before
• Method of Communication: Broad communications media–solicitation of offer. Advertisements–invitations for offer

Question 4

Definite and Certain Terms

Answer 4

Whether enough of the essential terms ahve been provided so that a contract inculding them would be capable of being enforced

• Must identify the offeree
• Subject matter must be certain. Court cannot enforce unles they have reasonable accuracy

Question 5

Missing Terms

Answer 5

• Missing terms: one ore more terms missing does not prvent formation if apperas
  
  • parties inteded to make contract
  • and there’s resaonably certain basis fro remedy.
• Court can supply terms

Question 6

Price

Answer 6

• Price: Missing price does not prevent formation except in real property.
• if price of goods, then it is reasonable at time of delivery

Question 7

Vague Terms

Answer 7

• Vauge Terms: Will not presume they meant something if term too vauge.
• ONly can be cured by part performance that clarifies the vague term or acceptance of full perofrmance

Question 8

Terms to be Agreed Upon Later

Answer 8

If this term is material, than the offer is too uncertain

Question 9

Requirements for Specific Types of Contracts concerning Definiteness

Answer 9

• Real Estate Transactions–Land and Price Terms–> some particularity
• Sale of Goods–Quantity Terms–must be certain or capable of being certain
• Services–Nature of Work

Question 10

Requirement and Output Contracts

Answer 10

• Requirement: b promises to buy from a certain s all of the goods the buyer requires and s agrees to provide it
• Output: s promises to sell all of good seller produces, and buyer agress to buy that amount
• Good faith assumed. Cannot request a quantityt unreasonably dispropritatione to:
  
  • any stated estimate
  • OR any noremal or others comparable prior output or requriemetns

Question 11

Communication to Offeree

Answer 11

To have the power to accept, offeree must have knowledge of the offer

Question 12

Termination by Offeror/Revocation

Answer 12

• retraction of an offer by the offeror
• direct communication
• If in an ad, must be done by comparable means
• May revoked indirectly if offeree receives
  
  • 1) correct info
  • 2) from a reliable source
  • 3) of acts of offeror that would indicate to a reaosnable person that no longer wishes to make offeror

Question 13

Revocation effective when received

Answer 13

effective when the oferee receives the revocation

can be by delivery–does not matter if read

If by publication, once publisehd

Question 14

Limitations on Offeror’s Power to Revoke: Options

Answer 14

• offee gives condieration for a promibse by the offeror not to revoke an outstanding offer. Usually for a time period

Question 15

Limitations on Offeror’s Power to Revoke: Merchant’s Firm Offer Under Article 2

Answer 15

• No consideartion
• If 1) a merchant; 2) offers to sell goods in a signed writing; and 3) the writing gives assurances that it will be held open, not recovcable for lack of condersation during time state or for reasonable time (not more than 3 months)

Question 16

Limitations on Offeror’s Power to Revoke: Detrminental Reliance

Answer 16

when offeror could reasonably excpet that the offeree would rely to her detriment on the offer and does so, will be irrevocable as aoption k for reasonable time.

Question 17

Limitations on Offeror’s Power to Revoke: Part Performance–True Unilateral K offers

Answer 17

• IMplied Contract for a Reaonable Time: irrevocable once perforamnce has begun.
  
  • must offer reasonable time to complete perofrmance
  • offeree not bound to complete performance. Can withdraw at anytime
• Distinguish–Prep to perform
  
  • susbstantial preparations does not make offer binding but extend of determinatal reliance can make it binding on the amount of reliance

Question 18

Limitations on Offeror’s Power to Revoke: Part Performance–Offer indifferent as to manner of acceptance

Answer 18

• if indiiferent, once perofrmance begins, contract beings and revocation becomes impossible
  
  • notification of beginning perforamnace may be necessary

Question 19

Offeree Terminating by Rejection

Answer 19

• Types:
  
  • Express Rejection
  • Counteroffer as Rejection–same subject matter but differes in terms creates new offer and rejection of the previous
    
    • mere inquiry okay–what would a reaonalbe person believe it to be
• Rejection effect when received by offeror

Question 20

Rejection of an Option Contract

Answer 20

Does not terminate the offer if still within the time period.

Free to accept unless the offeror detrimentally relied on the rejection

Question 21

Termination by Offeree: Lapse of Time

Answer 21

failure to accept within the time specified or within a reasoanble period

Question 22

Termination by Operation of Law

Answer 22

1. Death or Insanity of either party: unless type of offer that can’t terminate. Need not be communicated to other party
2. Destructin of the proposed K subject matter OR
3. Supervening illegality

Question 23

Who may Accept?

Answer 23

• The person who the offer is addressed
• may have power if you are member of class
• usually cannot be assigned
• If the oferee has paid consideration to keep offer open, than right is transferrable

Question 24

Acceptance of Offer for Unilateral Contract

Answer 24

Only by perofrmance

• Completion of Performance: usually msut complete. Beginning of perofrmance might create option so become irrevocable
  
  • no obligation to complete perofrmance
• Notice: offeree not required to give the offeror notice that he has begun but is required to give notice within a reasonable time of completion
  
  • no notice required if notice waived or completiong would come to offeror’s attention within a reasonble time

Question 25

Acceptance of Offer for Bilateral Contract

Answer 25

• Genearlly acceptamcne must be communicated
• Usually construed to offer acceptance in any reasonable manner
• Article 2 purhcase goods through Shipment: promise to ship or shipment considered acceptamcne
  
  • non conforming good shipped creates a contact and a breach
  • unless seller says they are being sent as an accomodation
  • buyer may reject accomdation goods

Question 26

Acceptance of Bilateral Contract must be unequivocal

Answer 26

• Mirror image acceptance at common law
• Article 2: Battle of the Forms–counteroffer okay as long as not makes the offer conditional on the acceptance of different terms
  
  • if ship goods wihtout accepting new offer and the other pays, than it is considered that the new terms fall out
• Bilateral Contracts Fromed by Performance: contract is formed if not communicated but they beging to perform

Question 27

When a bilateral contract acceptance is effective

Answer 27

Mailbox Rule

Contract created at moment of dispatch UNLESS

1. offer situplates otherwise
2. option contract is involved–effective only upon receipt
3. ofeeree sends a rejection and then sends an acceptance. Whichever arrives first is valid
4. acceptance and then a rejection, acceptance is effective unless the rejection arrives first and the offeror deterimentall relies on it.

Question 28

Auction Contracts