Mutual Assent (Offer + Acceptance) Flashcards
Requirements of mutual assent
Offer + Acceptance
Three Requirements of an offer
Must be communicated to (and received by) offeree
Through writing, spoken words, conduct
Must be sufficiently complete to provide a basis for enforcement if the offeree simply accepts.
Must manifest an “intent to be bound”:
Objective Test: Would a reasonable person receiving the communication understand it to manifest an intent to be bound, empowering her/him to accept?
Dickinson v. Dodds
An offer may be revoked by the offeror without an express or actual statement of revocation communicated to the offeree provided the offeree has not yet accepted and the offeree is aware of conduct by the offeror demonstrating intent to revoke the offer.
What is an offer
An offer is the manifestation of willingness to enter into a bargain, so made to justify another person in understanding that his assent to that bargain is invited and will conclude it.
An offeree’s power of acceptance may be terminated by,
rejection or counter-offer by the offeree, or
lapse of time, or
revocation by the offeror, or
death/incapacity of the offeror or offeree.
Communication of offer revocation
offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.
Indirect offer revocation
offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.
Firm Offers under UCC
UCC § 2-205
An offer by a merchant that says it will stay open until a certain date must stay open unless the time exceeds 3 months
Firm Offers under the CISG
Article 16
Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.
However, an offer cannot be revoked:
If it indicated whether by starting a fixed time for acceptance or otherwise, that it is irrevocable; or
If it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.
Mailbox Rule
Offers/revocations are effective upon receipt.
Acceptances are effective upon dispatch.
Caveats to offer and acceptance
Acceptance must be made in manner invited;
Not applicable to all sorts of contracts/negotiations
Instantaneous Communications E.g., face-to-face; phone; (in some jurisdictions fax and email also are considered instantaneous)
Rule of RECEIPT applies to all communications (Rest. 2nd § 64)
Option Contracts
l Rule of RECEIPT applies to all communications (Rest. 2nd § 63(b))
Rejections by the offeree are effective upon receipt.
Certain categorical exceptions to the mailbox rule, where a universal rule of receipt operates.
Embry v. Hargadine, McKittrick Dry Goods Co.,
Two Part Embry Test:
A communication is a valid manifestation of assent if, (a) if it would be taken by a reasonable person to be one; and (b) if the receiver so understood it.
Lucy v. Zehmer,
“A drunken sale of land”
A communication is a valid manifestation of assent if, (a) if it would be taken by a reasonable person to be one; and (b) if the receiver so understood it.
Leonard v. Pepsico
A reasonable person would not consider an ad a serious offer if:
It’s a “mere” advertisement
It is evidently done in jest.
General: advertisements are not valid, binding offers.
Exception: See Lefkowitz
Lefkowitz v. Great Minneapolis Surplus Store, Inc.
An ad constitutes a binding offer if it is clear, definite, and explicit, and leaves nothing open for negotiation.
