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Contracts & Sales > Mutual Assent: Offer & Acceptance > Flashcards

Mutual Assent: Offer & Acceptance Flashcards

1
Q

What is meant by mutual assent?

A

One party must accept the other’s offer

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2
Q

How is mutual assent determined?

A

Via an objective standard: Did words or conduct manifest a present intention to enter into a K?

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3
Q

What 3 questions must a court address when a K suit is brought?

A

1) Was there mutual assent?
2) Was there consideration (or sub.)?
3) Any defenses to creation?

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4
Q

An offer must create a ________ in the offeree that the offeror is willing to enter K on basis of the offered terms?

A

reasonable expectation

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5
Q

How do we decide if a communication creates a reasonable expectation (regarding an offer)?

A

Was there an expression of a promise/undertaking/commitment (intent) to enter K? Were the essential terms certain and definite? Was there communication of this to the offeree?

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6
Q

What factors will a court look to to determine where intent to enter K?

A

1) Language used, 2) surrounding circumstances (and their effect on parties’ behavior), 3) prior practice/relationship between parties, 4) method of communication

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7
Q

Are broad communications/advertising forms of offers? If not, why?

A

Usually not; re the former, the broader the media, the more likely it’s a mere solicitation; re the latter, usually construed as mere invitation for offer

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8
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A
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9
Q
A
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10
Q

What is the basic inquiry used to decide whether terms were sufficiently definite and certain?

A

Whether enough essential terms provided so as to make K capable of being enforced

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11
Q

What terms are generally required for an offer?

A

1) identification of the offeree, 2) definite subject matter, and 3) price*

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12
Q

What is required for a realty offer?

A

Offer must 1) identify land with some particularity; and 2) price terms (most courts will NOT supply missing price)

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13
Q

What is required for a sale of goods offer?

A

A K for the sale of goods must have a quantity that is either certain or capable of being made certain?

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14
Q

What is a requirements K?

A

K where buyer promises to buy from certain seller all of the goods the buyer requires and seller agrees to sell that amount to buyer

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15
Q

What is an output K?

A

K where seller promises to sell to certain buyer all of the goods seller produces, and buyer agrees to buy that amount from seller

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16
Q

What limits/rules apply to requirements/output K’s?

A

Assumption that parties will act in GF, meaning there can’t be a tender of/demand for a quantity unreasonably disproportionate to 1) any stated estimate, or 2) any normal/otherwise comparable prior output or requirements

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17
Q

What is required for employment K?

A

If no duration specified, offer construed to create at-will term; for other services, nature of work to be performed must be included

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18
Q

What happens if one or more terms are missing from the K?

A

Missing terms don’t prevent K formation if: 1) it appears parties intended to make K; and 2) there’s a reasonably certain basis for giving a remedy (mostly OK for courts to supply reasonable terms)

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19
Q

Is price required for a K?

A

No if parties intended to for K without the price being settled

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20
Q

Is price required for a K under the UCC?

A

No; if no such term in K, price will be a reasonable price at the time of delivery

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21
Q

What happens if time for performance isn’t included?

A

Law implies that K is to be performed within a reasonable time?

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22
Q

Does the presumption to include reasonable terms apply to vague terms?

A

No, but vague terms can be cured by clarifying part performance or acceptance of full performance

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23
Q

To have the power to accept, offeree must have _____ of the offer.

A

Knowledge

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24
Q

How can an offer be terminated by the offeree?

A

Via 1) lapse of time or 2) rejection

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25
Q

The offeree must accept the offer within the time specified or, if no period specified, ______ or offer terminated.

A

within a reasonable time

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26
Q

How can an offer be rejected?

A

Via 1) express rejection, 2) counteroffer, 3) conditional acceptance

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27
Q

What’s the difference between a counteroffer and a mere inquiry?

A

A mere inquiry occurs where the offeree asks a question while keeping the offer under consideration; determine by asking whether RP would believe original offer had been rejected

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28
Q

What happens if a party performs following a conditional acceptance?

A

Performance doesn’t constitute acceptance (because you can’t); if parties ship/accept good, K formed by their conduct (and CA terms out)

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29
Q

When is a rejection effective?

A

When received by offeror

30
Q

What happens if offeree rejects/counteroffers to an option K?

A

Offer not terminated and offeree still free to accept within option period unless offeror detrimentally relied

31
Q

How can an offeror terminate an offer?

A

Revocation, which is the retraction of the an offer by the offeror

32
Q

Can an offer be revoked indirectly?

A

Yes, if offeree receives 1) correct information, 2) from a reliable source, 3) of acts of offeror that wuould indicate to RP that offeror no longer wishes to make offer

33
Q

When is a revocation effective?

A

Revocation effective when received by offeree (or, if by publication, when published)

34
Q

T or F: Offeree must actually read communication before revocation effective

A

False

35
Q

What are the limitations on an offeror’s power to revoke?

A

1) options, 2) merchant’s firm offer (UCC), 3) detrimental reliance, 4) beginning performance for unilateral K, 5) beginning performance (bilateral)

36
Q

What is an option?

A

Distinct K where offeree gives consideration for promise by offeror NOT to revoke outstanding offer

37
Q

What is the Merchant’s Firm Offer rule?

A

UCC provision stating that offer not revocable if: 1) a merchant 2) offers to buy/sell goods in a signed writing, and 3) writing gives assurances that it will be held open

38
Q

What happens if a merchant’s firm offer does not include a time period to accept?

A

If no time stated, standard is a reasonable time (but can’t exceed 3 months)

39
Q

What is detrimental reliance?

A

When offeror could reasonably expect offeree would rely to their detriment on offer AND offeree does do rely

40
Q

If detrimental reliance present, offer will be held irrevocable _____ for a ______.

A

as an option K; for a reasonable length of time

41
Q

Regarding performance, when does a unilateral K become irrevocable?

A

When performance has begun (and offeree has reasonable time to complete)

42
Q

Is offeree in unilateral K bound to complete performance?

A

No; can withdraw any time prior to completion

43
Q

What is the difference between preparations to perform and actual performance?

A

Preparations to perform do not make offer irrevocable BUT may constitute detrimental reliance

44
Q

What happens when offeree begins performance for bilateral K?

A

K formed and revocation no longer possible (BUT notification for the start of performance may be required)

45
Q

What events will terminate offer by operation of law?

A

1) death or insanity of either party (unless offer of kind that offeror couldn’t terminate; death need not be communicated)
2) destruction of proposed K’s subject matter
3)Supervening illegality

46
Q

What is acceptance?

A

Manifestation of assent to offer terms

47
Q

T or F: Offeree’s power of acceptance can be assigned.

A

False (BUT if consideration paid to keep offer open, right to accept becomes transferable)

48
Q

T or F: Acceptance of offer for bilateral K must be communicated to the offeror.

A

True

49
Q

Under what circumstances can silence constitute acceptance?

A

1) If, due to prior dealings/trade practices, commercially reasonable
2) If recipient of services knows/should know services were being rendered with expectation of compensation AND could have prevented services by word

50
Q

How can a party accept a bilateral K?

A

By any reasonable manner (i.e., any objective manifestation of offeree’s counterpromise usually sufficient)

51
Q

Under Art. 2, an offer to buy goods for current or prompt shipment is construed as inviting acceptance either by _____ or ______.

A

a promise to ship; by current or prompt shipment of conforming or nonconforming goods

52
Q

Under common law, acceptance must be ________.

A

Absolute and unequivocal

53
Q

Under common law, any different or additional terms in the acceptance make the response a ________.

A

rejection and counteroffer

54
Q

T or F: A unilateral K is not accepted until performance is completed.

A

True

55
Q

Is notice required regarding performance for a unilateral K?

A

Notice that performance has begun usually not required, BUT notice of completed performance required within a reasonable time after completion

56
Q

For a unilateral K, notice is not required if: _____ or _______.

A

Offeror waived notice; offeree’s performance would normally come to the offeror’s attention within a reasonable time

57
Q

What happens under UCC when nonconforming goods shipped?

A

Shipment of nonconforming goods constitutes an acceptance creating a bilateral K as well as a breach of K

58
Q

Under what circumstances is the shipment of nonconforming goods not a breach?

A

Where seller seasonably notifies buyer that a shipment of nonconforming goods is offered only as accommodation (buyer may still reject but seller not in breach)

59
Q

Under the UCC, inclusion of additional/different terms by offeree does NOT constitute a rejection and counteroffer, but rather is _______.

A

Effective as an acceptance (unless acceptance is expressly made conditional on assent to new terms)

60
Q

Are different/additional terms in an acceptance included in the final K where at least one party isn’t a merchant under the UCC?

A

No; if any party to K is not a merchant, offeror must expressly agree for terms to be included

61
Q

Are additional/different terms in an acceptance included in final K if both parties are merchants?

A

Yes to additional terms unless 1) they materially alter original offer terms, 2) offer expressly limits acceptance to offer terms, or 3) offeror has already objected to particular terms or objects within reasonable time after notice of them received; BUT it depends for different terms

62
Q

What is the knockout rule?

A

UCC concept where conflicting terms are “knocked out” and subsequent gaps in K filled by UCC

63
Q

What constitutes a material change regarding terms?

A

Change that’s likely to cause surprise and/or hardship

64
Q

Must the moment of mutual assent be certain per the UCC?

A

No

65
Q

What is the Mailbox Rule?

A

Acceptance by mail or similar means is effective at the moment of dispatch, provided that mail is properly addressed and stamped

66
Q

What are the exceptions to the Mailbox Rule?

A

1) offer stipulates that acceptance not effective until received; 2) option K involved, meaning acceptance only effective upon receipt; 3) offeree sends rejections and then acceptance (whichever arrives first controls); 4) offeree sends acceptance and then rejection (acceptance controls unless rejection arrives first and offeror detrimentally relies on it)

67
Q

Can acceptance transmitted by authorized means still be effective?

A

Yes; may be effective if it’s actually received by offeror while offer still open

68
Q

T or F: If a K is not formed by parties’ communications but they begin to perform as if K, a K is formed.

A

True

69
Q

Per the UCC, when is a sale by auction complete?

A

At time of auctioneer’s “fall of the hammer” or another customary manner

70
Q

What is an auction sale with reserve?

A

Means auctioneer may withdraw the goods at any time until he announces completion of sale (assumed unless explicitly stated otherwise)

71
Q
A

Contracts & Sales (2 decks)

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