Mutual Assent: Offer and Acceptance

Question 1

For communication to be an offer, what is required?

Answer 1

The communication creates a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms

Question 2

Offer Analysis Factors

Answer 2

Was there an expression of a promise, undertaking, or commitment to enter into a contract?

Was there certainty and definiteness in the essential terms?

Was there communication of the above to the offeree?

Question 3

What are ways we show intent to enter a contract?

Answer 3

Language

Surrounding Circumstances

Prior Practice and Relationship of the Parties

Method of Communication
- Advertisements = invitation for an offer, NOT an offer

Question 4

An offer must be definite and certain in its terms. What is the basic inquiry into this?

Answer 4

Enough essential terms have been provided so it is capable of being enforced

Question 5

In a sale of goods, what term must be included in an offer?

Answer 5

The quantity! This must be certain or capable of being made certain

Question 6

Requirements for Output Contracts

Answer 6

Quantity cannot be unreasonably disproportionate to any stated estimate or normal/otherwise comparable prior output or requirements

Question 7

Employment/Other Services Requirement

Answer 7

Duration! If the duration of the employment is not specified, the offer is construed as being terminable at the will of either party.

For other services, the nature of the work to be performed must be included in the offer

Question 8

Can a contract be formed if one or more terms are left open?

Answer 8

Yes if it appears the parties intended to make a contract and there is a reasonable basis for giving a remedy! Most jurisdictions and Art. II hold that the court can supply reasonable terms for those that are missing.

Question 9

Does lack of price prevent the formation of a contract?

Answer 9

No, unless a contract for real property!

If contract for sale of goods is missing a price, Art. II provides that the price will be a reasonable price at the time of delivery.

Question 10

Does a lack of time prevent the formation of a contract?

Answer 10

No, law implies it to be performed within a reasonable time

Question 11

What is contract has terms to be agreed upon later?

Answer 11

Generally okay, but if the term is material, the offer is too uncertain

Question 12

Termination by Offeree

Answer 12

1. Lapse of Time - did not accept within specified or reasonable time
2. Rejection - either express, counteroffer as rejection, conditional acceptance as rejection, rejection of option, etc.

Question 13

When is a offeree rejection effective?

Answer 13

When RECEIVED by the offeror

Question 14

Termination by Offeror

Answer 14

Revocation! Either directly or indirectly if:

Offeree receives correct information, from a reliable source, of acts of the offeror that would indicate to a reasonable eprson that the offeror no longer wishes to make the offer

Question 15

When is offeror termination effective?

Answer 15

WHEN RECEIVED! If a publication, it can also be effective when published

Question 16

Limitations on Offeror’s Power to Revoke

Answer 16

Options, i.e., offeree gives consideration

Merchant’s Firm Offer under Art. II: if merchant offers to buy or sell goods and the writing gives assurances it will be held open, then it is not revocable

Detrimental Reliance: when offeror could reasonably expect that the offeree would rely to their detriment, the offer will be held irrevocable as an option contract for a reasonable length of time

Beginning Performance in Response to True Unilateral Conract Offer: once performance has begun, the offeror must give the offeree a reasonable time to complete performance

Beginning Performance in Bilateral Contract: irrevocable at start of performance!

Question 17

Termination by Operation of Law:

Answer 17

1. Death or insanity of either party
2. Destruction of the proposed contract’s subject matter
3. Supervening ilelgality

Question 18

Acceptance Defined Generally

Answer 18

A manifestation of assent to the terms of an offer

Question 19

Who may accept?

Answer 19

Generally, only the person to whom an offer is addressed has the power o acceptance—generally, this power cannot be assigned, but it can be transferred if an option contract

Question 20

Must the offeree know of the offer in order to accept?

Answer 20

Yes

Question 21

Acceptance of Offer for Bilateral Contract

Answer 21

Either by the promise to perform or the beginning of performance

Question 22

Bilateral Contract Acceptance Requirements

Answer 22

1.Must be communicated, but silence may be permitted if commercially reasonable

2. Method of Acceptance: Any reasonable manner under the circumstances
3. Acceptance Must be Unequivocal: at common law, any different or additional terms makes the response a rejection and counteroffer

If an offer to buy goods for current or prompt shipment, acceptance is promise to ship or by current or prompt shupment

Question 23

Acceptance of Offer for Unilateral Contract

Answer 23

Only by performance

Question 24

Unilateral Contract Acceptance Requirements

Answer 24

1. Completion of Performance
2. Notice: not required to give the offeror notice that performance has begun but after performance completed unless offeror waived notice or offeree’s performance would normally come to offeror’s attention within a reasonable time

Question 25

Acceptance under Art. II1

Answer 25

An offer to buy goods for current or prompt shipment may be accepted by either a promise to ship or the actual shipment

If a nonconforming good, it is an acceptance as well as a breach! UNLESS seller notifies buyer than goods is an accomodation, but the buyer can reject

Question 26

Battle of the Forms Provision: Art II

Answer 26

MIRROR IMAGE NOT REQUIRED!

Question 27

Art. II Terms Rules

Answer 27

1. Contracts Involving a Nonmerchant: Terms of Offer Govern
2. Contracts between Merchants: Additional Terms Usually Included

Question 28

Merchant’s Confirmatory Memo

Answer 28

A merchant’s memo confirming an oral agreement is also subject to battle of the forms provision

Question 29

The Mailbox Rule

Answer 29

Acceptance by mail or similar means is effective at the moment of dispatch

Question 30

Mailbox Rule Exceptions

Answer 30

1. Offer stipulates that acceptance is not effective until received
2. An option contract is involved (need receipt)
3. Offeree sends a rejection and then sends an acceptance (whichever arrives first is accepted)
4. Offeree sends an acceptance and then a rejection, in which case the acceptance is effective unless the rejection arrives first and the offeror detrimentally relies on it

Question 31

Auction?

Answer 31

Sale is complete by fall of the hammer, but with reserve means auctioneer may withdraw