Mutual Assent: Offer and Acceptance Flashcards
what standard governs whether mutual assent is present?
whether MA is present determined by objective standard; did words or conduct manifest a present intention to enter into a K?
what is offer?
Creates a power of acceptance in offeree and corresponding liability on part of the offeror.
must create a reasonable expectation in the offeree that offeror is willing to enter into a K on the basis of the offered terms.
in deciding whether communication create reasonable expectation ask:
- was there an expression of a promise, undertaking, or commitment to enter K?
- were there certainty and definiteness in essential terms?
- was there communication of the above to the offeree?
promise, undertaking, or commitment
there must be an intent to enter into a contract.
language
language used may show that offer was or was not intended.
surrounding circumstances
circumstances surrounding the language is considered by courts in determining whether an offer exists.
prior practice and relationship of the parties
determining whether certain remarks constitute an offer rather than preliminary negotiations, a court will look to the prior relationship and practice of the parties involved.
use of broad communications media
broader the communicating media the more likely courts think communication just solicitation of an offer.
advertisements, etc.
advertisements, catalogs, circular letters, and the like containing price quotations are usually construed as mere invitations for offers.
definite and certain terms
offer must be definite and certain in its terms. Basic inquiry whether enough of essential terms have been provided so that a K including them is capable of being enforced.
identification of the offeree
to be considered offer, statement must sufficiently identify the offeree or a class to which they belong to justify the inference that the offeror intended to create a power of acceptance
definiteness of subject matter
subject matter of deal must be certain.
real estate transactions requirements
land and price terms. most courts will not supply a missing price term for realty.
sale of goods requirements
quantity term
in a requirements contract, a buyer promises to buy from a certain seller all goods buyer requires, and the seller agrees to sell that amount to buyer.
in output contract, seller promises to sell to a certain buyer all goods that seller produces, and the buyer agrees to buy that amount from seller. assumed that parties will act in good faith, cannot be a tender or a demand for a quantity unreasonably disproportionate to (1) any stated estimate, or (2) in the absence of a stated estimate any normal or otherwise comparable prior output or requirements.
employment and other services requirements
duration of employment not specified the offer if accepted is construed as creating a contract terminable at the will of either party.
For other services, the nature of the work to be performed must be included in the offer.
what if missing terms?
one or more terms left open does not prevent formation if appears that parties intended to make a contract and there is a reasonably certain basis for giving a remedy. Courts can supply reasonable terms for the ones that are missing.
no price?
except property, the failure to state price doesn’t stop formation if parties intended. In sale of goods, article provides that price will be a reasonable price at the time of delivery.
no time?
if no time specification, law implies performance in reasonable time.
termination by lapse of time
offer can be ended by offeree’s failure to accept within time specified by offer or, if no deadline was specified, within a reasonable period.
express rejection
an express rejection is a statement by the offeree that they do not intend to accept the offer. such rejection will terminate the offer.
counteroffer as rejection
counteroffer is offer made by offere to offeror that contains same subject but differs in terms.
a counteroffer is BOTH a rejection and a new offer.
it terminates the original offer and reserves the roles of the parties.
distinguish - mere inquiry
an inquiry won’t terminate offer. test is whether a reasonable person would believe that original offer had been rejected.
conditional acceptance as rejection
when acceptance is made expressly conditional on acceptance of new terms, it is a rejection of the offer.
if parties ship or accept goods after a conditional acceptance, a K is formed by their conduct and the new terms are not included.
effective when received
rejection effective when received by offeror.
rejection of option
rejection of or a counteroffer to to option does NOT constitute a termination of offer. offeree is still free to accept the original offer within the option period unless the offeror has detrimentally relied on offeree’s rejection.
termination by offeror - revocation
offeror may revoke by directly communicating the revocation to the offeree.
an offer may also be revoked indirectly if offeree receives: (1) correct information, (2) from a reliable source, (3) acts of the offeror that would indicate to reasonable person that the offeror no longer wishes to make offer
when is revocation effective?
generally effective when received by offeree. When revocation is by publication, effective when published.
limitations on offeror’s power to revoke
options
merchant’s firm offer under Article 2
detrimental reliance
beginning performance in true unilateral K offer
beginning performance - offer indifferent as to manner of acceptance
options
offeree gives consideration for a promise to hold the offer open
merchant’s firm offer under Article 2
under Article 2: (1) if a merchant, (2) offers to buy or sell goods in a signed writing, and (3) writing gives assurances that it will be held open offer is not revocable for lack of consideration during time stated or if no time stated for reasonable time.
detrimental reliance
offeror reasonably expect that offeree would rely to detriment, the offeree does so, offer will be held irrevocable as option contract for reasonable length
beginning performance in response to true unilateral contract offer
becomes irrevocable once performance started. must give reasonable time to finish performance offeree not bound to finish performance
preparations to perform don’t count towards irrevocable but may constitute detrimental reliance
beginning performance - offer indifferent as to manner of acceptance
most offers indifferent to manner of acceptance - bilateral contract may be formed upon start of performance by offeree. Once offeree begins performance, contract is complete and revocation becomes impossible.
events terminate an offer by operation of law
death or insanity of either party
destruction of proposed contract’s subject matter OR
supervening illegality
acceptance
manifestation of aasent to terms of offer
acceptance of offer for unilateral contract
a. completion of performance
b. notice
however, no notice is required if: (1) the offeror waived notice; or (2) the offeree’s performance would normally come to the offeror’s attention within a reasonable time.
acceptance under Article 2
a. offers to buy goods for current or prompt shipment
b. battle of the forms provision
Is there mirror image in Article 2?
No. Including different terms is not a rejection and counteroffer but rather is effective as an acceptance, UNLESS the acceptance is expressly made conditional on assent to the additional or different terms.
knockout rule
Conflicting terms in the offer and acceptance are knocked out of the K, because each party is assumed to object to the inclusion of such terms in the contract. Under the knockout, gaps left by knocked out terms are filled by UCC.
the mailbox rule
acceptance by mail or similar ways effective at the MOMENT of dispatch provided that the mail is properly addressed/stamped, UNLESS one of the exceptions applies.
exceptions to the mailbox rule
- the OFFER STIPULATES that acceptance is no good until received.
- an OPTION contract is involved
- offeree sends REJECTION THEN ACCEPTANCE, then whichever gets there first is good.
- offeree sends acceptance then rejection, in which case the acceptance is effective (mailbox applies) UNLESS REJECTION ARRIVES FIRST and the offeror DETRIMENTALLY RELIES.
