Mutual Assent (Offer + Acceptance)

Question 1

mutual assent

Answer 1

requires:
1. an offer by one party, AND
2. acceptance of that offer by another party

Question 2

offer

Answer 2

1. a **manifestation of present intent to enter **into a K,
2. with definite & reasonably certain terms,
3. communicated to an identified offeree

Question 3

terminating an offer

Answer 3

an offer may be terminated BEFORE acceptance by:
1. Revocation: by offeror,
2. Rejection: by offerree,
3. Counteroffer: by offeree,
4. Lapse of Time: time for acceptance expires after (1) time limited state OR (2) reasonable time (if no time stated)
5. Death or Incapacity: of either party, OR
6. Supervening Illegality: proposed K becomes illegal AFTER offer is made

argue > 1 month = unreasonable

Question 4

revocation of offer

Answer 4

an offer may be revoked @ any time BEFORE acceptance by:
1. Unambiguous words or conduct: indicating an unwillingness/inability to contract communicated to offeree, OR
2. Indirect Revocation: when
- offeror takes definite action inconsistent w/ entering into proposed K, AND
- offeree acquires reliable info to that effect

Question 5

irrevocable offers

Answer 5

an offer is irrevocable if:
1. Option K: a promise to keep an offer open supported by consideration
2. UCC Merchant’s Firm Offer
3. Detrimental Reliance: offer was reasonably relied on to offeree’s detriment
4. Start Performance on Unilateral K: makes offer temporarily irrevocable for a reasonable time to complete performance
- mere preparation is NOT sufficient

Question 6

UCC Merchant’s Firm Offer

Answer 6

requires:
1. an offer by a merchant to buy/sell goods,
2. in a signed writing,
3. stating offer will be held open,
4. separately signed by offeror (if form was supplied by offeree)

NOTE: Consideration is NOT required

enforceable up to 3 months (anything after needs consideration)

NOTE: signed writing can just be merchant’s official letterhead

Question 7

rejection of an offer

Answer 7

is a manifestation of intent to NOT accept an offer, communicated to offeror
- Counteroffer: is both a rejection + new offer
- Conditional Acceptance: treated same as counteroffer
- Acceptance w/ Varying Terms: it’s either acceptance or counteroffer (see rule below)

Question 8

Acceptance

Answer 8

offeree’s manifestation of objective assent to the terms of the offer

4 ways
- by words/conduct
- by performance
- by silence
- by shipment of goods

NOTE: offeror is the master of the offer & may always direct how the offer is accepted

Question 9

acceptance by word/conduct

Answer 9

express words or conduct manifesting acceptance

Question 10

acceptance by performance

Answer 10

• Bilateral Ks: start of performance manifests acceptance
• Unilateral Ks: only makes the offer irrevocabele (acceptance ONLY when completed)

Question 11

acceptance by silence

Answer 11

NOT acceptance UNLESS an implied-in-fact K

Question 12

acceptance by shipment of goods

Answer 12

is acceptance if:
1. promise to ship goods, OR
2. prompt shipment of (conforming) goods UNLESS it’s an accommodation shipment

Question 13

acceptance w/ varying/additional terms

Answer 13

two issues:
1. CL: mirror image rule
2. UCC: merchants

Question 14

mirror image rule (CL)

Answer 14

acceptance MUST exactly mirror the offer
- any variations constitute a counteroffer

Question 15

UCC acceptance w/ varying/additional terms

Answer 15

acceptance does NOT have to mirror offer to a K
- BUT, additional or different terms are included ONLY IF:
1. both parties are merchants,
2. the term is NOT a material change,
3. offer does NOT expressly limit acceptance to the exact offer, AND
4. no objection was made w/in a reasonable time

Question 16

material change

Answer 16

likely to cause hardship/surprise

eg, disclaimer of warranty or arbitration clause

Question 17

timing of offer/acceptance & mailbox rules

Answer 17

1. Offer: effective when received
2. Revocation/Rejection/Counteroffer: effective when received
3. Acceptance: effective when dispatched
   - Exception: acceptance of an option contract is effective upon receipt

NOTE: offer may vary the default rules above

Question 18

mailbox rule

Answer 18

if offeree sends both acceptance & rejection:
1. Acceptance dispatched BEFORE rejection
- Estoppel Exception: if offeror relies on a rejection (received before acceptance), then offeree may be estopped from contract enforcement
2. Rejection sent BEFORE acceptance: first received by offeror controls

Question 19

implied-in-fact contract

Answer 19

a contract is created by conduct if:
1. the conduct is intentional, AND
2. each party has reason to know the other party will interpret the conduct as an agreement

NOTE: treated the same as an express contract

Question 20

indefiniteness / absence of terms

Answer 20

if terms of an agreement are NOT certain (cannot be ascertained to a reasonable degree of certainty), then it’s NOT enforceable
- typically 4 terms are required:
1. parties,
2. subject matter,
3. price, AND
4. time for performance

UCC: only essential term is quantity

Indefinite Duration: contract is generally invalid

Real Property: requires:
1. sufficient description of the land, AND
2. price