Mutual Assent: Offer and Acceptance Flashcards
For communication to be an offer, what is required?
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
Offer Analysis Factors
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?
What are ways we show intent to enter a contract?
Language
Surrounding Circumstances
Prior Practice and Relationship of the Parties
Method of Communication
- Advertisements = invitation for an offer, NOT an offer
An offer must be definite and certain in its terms. What is the basic inquiry into this?
Enough essential terms have been provided so it is capable of being enforced
In a sale of goods, what term must be included in an offer?
The quantity! This must be certain or capable of being made certain
Requirements for Output Contracts
Quantity cannot be unreasonably disproportionate to any stated estimate or normal/otherwise comparable prior output or requirements
Employment/Other Services Requirement
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
Can a contract be formed if one or more terms are left open?
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.
Does lack of price prevent the formation of a contract?
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.
Does a lack of time prevent the formation of a contract?
No, law implies it to be performed within a reasonable time
What is contract has terms to be agreed upon later?
Generally okay, but if the term is material, the offer is too uncertain
Termination by Offeree
- Lapse of Time - did not accept within specified or reasonable time
- Rejection - either express, counteroffer as rejection, conditional acceptance as rejection, rejection of option, etc.
When is a offeree rejection effective?
When RECEIVED by the offeror
Termination by Offeror
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
When is offeror termination effective?
WHEN RECEIVED! If a publication, it can also be effective when published
Limitations on Offeror’s Power to Revoke
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!
Termination by Operation of Law:
- Death or insanity of either party
- Destruction of the proposed contract’s subject matter
- Supervening ilelgality
Acceptance Defined Generally
A manifestation of assent to the terms of an offer
Who may accept?
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
Must the offeree know of the offer in order to accept?
Yes
Acceptance of Offer for Bilateral Contract
Either by the promise to perform or the beginning of performance
Bilateral Contract Acceptance Requirements
1.Must be communicated, but silence may be permitted if commercially reasonable
- Method of Acceptance: Any reasonable manner under the circumstances
- 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
Acceptance of Offer for Unilateral Contract
Only by performance
Unilateral Contract Acceptance Requirements
- Completion of Performance
- 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
Acceptance under Art. II1
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
Battle of the Forms Provision: Art II
MIRROR IMAGE NOT REQUIRED!
Art. II Terms Rules
- Contracts Involving a Nonmerchant: Terms of Offer Govern
- Contracts between Merchants: Additional Terms Usually Included
Merchant’s Confirmatory Memo
A merchant’s memo confirming an oral agreement is also subject to battle of the forms provision
The Mailbox Rule
Acceptance by mail or similar means is effective at the moment of dispatch
Mailbox Rule Exceptions
- Offer stipulates that acceptance is not effective until received
- An option contract is involved (need receipt)
- Offeree sends a rejection and then sends an acceptance (whichever arrives first is accepted)
- 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
Auction?
Sale is complete by fall of the hammer, but with reserve means auctioneer may withdraw
