Mutual Assent Flashcards
Mutual assent
Offer and acceptance “meeting of the minds”
Objective theory of assent
Current rule: Focuses on whether through the actions of the parties it looks like they intended to be bound
- It does not matter what the subjective mindsets are, what matters is how a reasonable person would perceive their outward manifestation of intent
- Prevents people from amking agreements when they claim it to be a joke (Luxy v. Z)
Offer
A manifestation of willingness to enter into a bargain
- an Ad does not constitute an offer and neither do the communication that follow with another party that shows interest
i) ads are usally invitations to a offer
Store owners usally want a Bilateral contract: Either want to be the offeror so they can be in charge of transaction. In Ever-tite Roofing, they wanted to be the offeree so they could reject the offers
Ways an offer becomes unavailable:
1) Lapse of time
2) Rejection of offer
3) Death
Acceptance
Elements:
1) A manifestation of assent to the terms made by the offeree
2) in a manner invited or required by the offeror
The offer must mirror the offer. Not enough for the acceptance to be similar (Stephens v. City of memphis)
Acceptance by performance
The contract becomes binding upon completion of the performance (if you mow my lawn, ill give you $20)(Unilateral)
Acceptance by promise
Requires that the offeree complete every act essential to the making of the promise(Bilateral)
-Some will contract out of default rules to create acceptance by performance as promise
Acceptance must be made within a reasonable amount of time after the offer has been given; the facts of the case will determine what a reasonable time for acceptance is
-Akers: offers made face-to-face usally end once the conversation is over unless specified
Counter-Offers (“qualified acceptance”)
Elements:
1) AN offer made by the offeree to his offer
2) Relating to the same matter as the original offer
3) proposing a substituted bargain differing from the original proposed offer
The oringal offeree becomes the offeror and the original offer becomes void - cannot resurrect. An acceptance must mirror the exact terms of the original offer, or else it becomes a counter offer.
UCC Land - Offer & Acceptance; Battle of the forms
Formation in general §2-204: A contract for the sale of goods can be made in any manner sufficent to show agreement, even if the moment of its making is undermined. The K will also not fail for indefiniteness as long as the parties intended to form a K & there is a reasonable basis to give an appropriate remedy
Offer & Acceptance in formation of K (§2-206)
1) An offer to make a K can invite acceptance in any reasonable manner and/or medium
2) An offer t buy goods can invite acceptance be either (a) a prompt promise to ship or (B) prompt shipment. The shipment of non-conforming goofs isn’t an acceptance if the seller notifies the buyer
3) The beginning of a performance of a requested acceptance is a reasonable mode of acceptance & an offeror who isn’t notified of acceptance within a reasonable time may treat the offer as having lapsed
Assent to a contract before knowing all the terms. Often, there is no negotiation, the only way to not agree w/ contract is opt out (return the item, cancel order, Ect.) (proCD)
-a contract does not need to be read to be effective
Additional terms in acceptance or confirmation §(2-207)
You can have contract formation even if it isn’t clear who the offeror is. If you have a buyer and seller that are both merchants and they both have terms of agreement that conflict, whose terms govern?
§2-207 (1) BEFORE THE COMMA: Allows an offeree to accept with additonal terms; look to subsection (2) for what happens w/ the terms. Offer and acceptance + add. terms (Eliminates the mirror image rule)
§2-207(1) AFTER THE COMMA: Resurrects to counter offer ->voids the original offer
-the orginal offeror MUST assent to the terms or there is not assent
§2-207(2): Is subject to 2-207(1) before the comma; cant get to (2) without (1) before the comma.
- if one the parties is a non-merchant the additional terms become proposals. Otherwise(two merchants), they’re part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer ;
(b) they materially alter it
(c) Notification objection is given
§2-207(3): There is no contract formation under 2-207(1) but the parties perform as if they have a contract
-when there are two forms w/ conflicting terms, the terms in agreement are part of the contract and any conflicting terms are voided and replaced by UCC default rules (usually in favor of the offeror)
Definiteness
Common law §33: A contract must contain minimum terms necessary to determine what the parties assented to do under the contract. If it is unclear, no contract (Acad, Chich v. Cheever)
- UCC §2-204(3)
- Open price term UCC 2-305
UCC 2-204(3)
A contract will not be void if there is indefiniteness so long as the parties intended to make a contract and there is a reasonable basis for giving an appropriate remedy
Open price term (UCC 2-305)
1) The terms for a price can be open in a contract and still be valid. The price can be determined at the time of delivery (reasonable) if nothing is said of the price, if the price, if the price cant agree to price or if the price was set by market or standard price but hasnt been set
2) The price must be made in good faith
3) If the price was to be determined outside the contract but was not at the fault of one of the parties, the 2nd party can either cancel the contract or set a reasonable price themselves
4) There is no K if the parties did not intend to be bound UNTIL a price was fixed or agreed upon
Negotiations
A party’s actions are considered negotiations if the party make a further manifestation of assent
If a clear formation of a contract isn’t found, the court is more likely to find that they’re still in negotiations. Look at the intentions of both parties!(Berg v. Sleepworld) Though informal, both intended to be bound but then one party withdrew, claiming to still be in negotiations
Companies incur and bear their own cost during negotiations, even if the negotiations fall through .
- they cannot get relief or damages without contract formation
- Word indicators: “considering” or lack of explicit offer
Modification
Requires mutual assent
Common law:
1) Mutual assent and either
2) fresh consideration (Alaska packers) OR
3) it be fair and equitable (§89) depending on JX
A modification often wont be enforceable if the performance remains the same but the payment changes, unless the circumstances surrounding the performance changes
- 100$ in exchange for nothing: the performance remained the same. No consideration
- Would have been enforceable if the performance stayed the same but the fishing equipment was broken,missing (made it harder to fish)
Under 2-209: modification does not require consideration
