Mutual assent Flashcards
what is mutual assent
offer + acceptance
What is an offer
(1) A communication from the offeror that creates a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms.
(2) The terms must be definite and certain.
For a communication to constitute an offer it must contain a (3) promise, undertaking, or commitment to enter into a K. The offeree must be reasonably identified, and the subject matter must be reasonably definite.
What terms are required in a real estate K
land description and price
What terms are required for sale of goods
quantity term
What is a requirement contract
Buyer promises to buy from a certain seller all the goods the buyer requires and seller agrees to sell that amount to the buyer
seller agrees to sell all that the buyer requires
In a requirements contract what are the obligations of a buyer and a seller?
buyer - has to buy everything from the seller
seller - has to furnish buyer with everything buyer requires BUT can also sell elsewhere
What is a output contract
Seller promises to sell to a certain buyer all the goods the seller produces and buyer agrees to buy that amount from the seller
buyer agrees purchase all of seller’s output
HINT: seller and output have the same number of letters (6)
In an output contract what are the obligations of a buyer and a seller?
buyer - buyer promises to buy all of seller’s output but can buy from elsewhere too (as long as buyer has bought all of seller’s output)
seller - seller can only sell to buyer (since buyer has promised to buy all the output)
What terms are required in a service k
nature of the work
Types of terminations
-
By offeror
- Revocation
- direct/express
- indirect/implied
- Revocation
-
By offeree
- Lapse of time
- Re**j**ection
- express rejection
- counteroffer
- By law
*termination*
When the offeree makes their acceptance conditional, then it is:
a rejection!
a rejection is effective when
received by offeror
a revocation is effective when
when received by offeree
How is an offer indirectly revoked
when reliable 3rd party indicates to offeree that offeror is no longer willing or able to contract
a revocation by publication is effective
WHEN it is published
Does MBR apply to revocation
NO! effective when received
Offers that cannot be revoked (by offeror)
AKA: Irrevocable offers
- Option K
- Merchants firm offer
- Detrimental Reliance
- Beginning performance under unilateral k
When is an option K created
created when offeror promises to keep the offer open for a certain period of time PLUS consideration by offeree
Does a counteroffer kill an option K
A counteroffer will still not kill the original option contract because the option is being held open for a certain period
What is a merchant’s firm offer
- merchant promise (signed + in writing ) to keep an offer open
- during a period of time and
- if no time stated then a reasonable time BUT the reasonable time may not exceed 3 months (if period is 3 mo. then no consideration needed); applies only to sale of goods
Who needs to be a merchant in the merchant’s firm offer
only the offeror must be a merchant
Is consideration needed for a merchant’s firm offer
NO.
A merchant’s firm offer is enforceable even if no consideration has been paid by the offeree to keep the offer open
What is detrimental reliance
When offeror could reasonably expect that offeree would reasonably rely to their detriment on the offer and offeree does so rely … then offer becomes irrevocable … will be held as a option K for a reasonable length of time
When can a unilteral K be revoked
Before beginning performance
list (3)
How can K be terminated by operation of law
-
Death or insanity of either party unless option K
- note: death or insanity need not be communicated
- Destruction of proposed K’s subject matter -OR-
- Supervening illegality
What is acceptance
Acceptance is a timely manifestation of assent to the terms of the offer
How does acceptance work for bilateral k?
- promise to perform -OR-
- beginning performance
list (2)
Article 2 invites acceptance through
- promise to ship -OR- promise to perform
- current or prompt shipment of conforming OR nonconforming goods beginning performance
Under, CL acceptance must
mirror the terms of the offer
Under CL, any different or additional terms
are considered a rejection and counteroffer
Under unilateral K, acceptance occurs when
performance is completed
Does silence constitute acceptance
No unless it is
- implied silence or
- agreed upon silence
Under UCC, when seller sends nonconforming goods, this constitutes
substitution
Under UCC, when seller sends nonconforming goods with a note explaining why and sends the nonconforming goods as a substitute, then
the goods are merely an accommodation
When seller sends nonconforming goods with note (iow: accommodation), and buyer does not accept, is the seller in breach?
No because seller sent nonconforming goods as a substitute
breach vs accommodation when shipping nonconforming goods
breach - seller discovers they dont have the specified goods and sends nonconforming goods as an accommodation
accommodation - seller notifies buyer that he lacks the specified goods, notifies buyer that he will be shipping nonconforming goods as an accommodation
When seller sends nonconforming goods with note, is buyer required to accept?
No is not required to accept and buyer can reject
List (3)
Additional terms added to K btwn merchants unless:
-
Material alteration: they materially alter the og terms (something that changes a party’s risk or the remedies available)
- Most common is adding a clause disclaiming a warranty
-
Limit: offer expressly limits acceptance to the terms of the offer
- “accepting the terms of the K as is” means that add’l terms cannot come in
- Objected: offeror has already objected to that particular term (or he objects within a reasonable time)
If any party to the contract is not a merchant, the additional or different terms:
are considered to be mere proposals to modify the contract.
Under MBR, acceptance is effective when
mailed
list (4)
MBR does not apply to acceptance when
(iow: no contract formed)
- Offer says acceptance is effective upon receipt
- Option K
- Offeree sends a rejection then acceptance → whichever arrives first
- Offeree sends acceptance then rejection → acceptance effective unless rejection gets there first and offeror detrimentally relied
Offeree sends a rejection then acceptance, which one is effective
whichever arrives first
Offeree sends acceptance then rejection, which wins
acceptance wins unless rejection arrives first and offeror detrimentally relied
Offeror sends offer → revokes → accepts → receive revocation
contract created
MBR applies, revocation effective only upon receipt
Offeror sends offer → revokes → receive revocation → send acceptance
no K
revocation terminates power of acceptance
