Offer & Acceptance Flashcards
An offer requires…
- an outward manifestation- can be oral, written, or via conduct
- a signal that acceptance will conclude the deal
What are 3 common multiple offeree situations?
CAR
- commercial advertisements
- auctions
- rewards
What are the rules for commercial ads?
- they are generally treated as invitations for offers rather than offers UNLESS it is accompanied by language that indicates specific allocations in the event of excess of demand. (i.e. first come first server of 1st 10 customers only)
what is the legal effect of an offer?
an offer gives the offeree the power to create a K by accepting the offer
what are 4 ways to terminate the power of acceptance?
- lapse of time- reasonable time; if face to face, at the end of the convo
- death or incapacity of either party
- revocation by the offeror- prior to acceptance AND effectively communicated; can be direct or indirect–offeror has taken a definite inconsistent action and the offeree learns from a reliable source; offeror may revive an offer
- rejection by the offeree- outright rejection; counteroffer; nonconforming acceptance (mirror image rule); doesnt include mere inquiry
What is required for the revocation of an offer made to multiple offerees?
- functional equivalents rule, unless there is a better means of notification that is reasonably available.
How does the UCC treat nonconforming acceptance?
rejects common law for the shipment of nonconforming goods and the “battle of the forms”
What are the 3 requirements for an enforceable option K in common law?
- an offer
- a subsidiary promise to keep offer open
- mechanism for securing enforcement (consideration)
***can be enforced by Promissory Estoppel where offeree has reasonable and foreseeably relied on the option
***subject to special rule on construction Ks where general contractor relies on on subcontractors in his own beid
What is the UCC Firm Offer Rule?
- a MERCHANT can make an irrevocable offer if the offer is in writing and signed by the merchant and it expressly states by its terms that it will be held open
- offer cant be open longer than 3 months, after that consideration is required.
- one can be a merchant based only off knowledge
What happens if its unclear whether an offer must be accepted by promise or performance?
- the offerree is free to choose the means of acceptance
When can a unilateral offer be revoked?
- only when the offerree is engaged in mere preparations
2. the offeree of a unilateral K is free to abandon the performance at any time
How do you communicate acceptance?
- mirror image rule
- acceptance must be communicated to the offeror, if no info about communication, party muse use reasonable means to communicate (means used by the offeror, custom in similar transactions, equivalent expeditiousness)
In what 3 instances is acceptance by silence allowed?
- when offeree takes benefit with a reasonable opportunity to reject them and knows of offerors intention
- where offeror has given offeree reason to understand that silence is acceptable
- previous dealings tell offeree that he should tell offeror he doesnt plan to accept
what is the mailbox rule?
- default rule that states that acceptance by mail is effective on dispatch as long as acceptance is properly posted; appliers to any transmission that involves a foreseeable delay
- Parties are bound even in acceptance is lost in transmission
How does a party accept under the UCC?
- unless contrary terms exist, in ay manner by any medium reasonable under the circumstance
Under the UCC what are 3 ways a seller can accept a buyers offer to purchase goods?
- promise to ship goods in conformity with the terms of the offer (acknowledgment)
- prompt or current shipment in conformity with the terms
- shipping nonconforming goods UNLESS seller labels its as an accodomation
What is the “Battle of the Forms” situation between merchants?
- unless acceptance is expressly made conditional on assent to the additional or different terms, nonconforming acceptance is effective and forms a valid K
- additional terms become part of K UNLESS
a- offer expressly limits acceptance to terms of offer
b- offeror object to additional terms w/in a reasonable time after receiving notice
c- the additional terms would materially alter the K (would result in surprise or hardship: 2-207 like the negating standard warranties) - different terms are knocked out
What is the “Battle of the Forms” situation if a consumer is involved?
if a consumer (nonmerchant) is involved, additional or different terms are treated as proposals and aren’t part of the K unless offeror expressly agrees to the additional terms.
Written Confirmations if a consumer is involved
Any additional or different terms are mere proposals
Written Confirmations between 2 merchants
any additional terms are automatically part of the K UNLESS:
- they would materially alter the K; or
- the receiving party objects within a reasonable amount of time
different terms are proposals; and if 2 written confirmations contain conflicting terms, the knockout rule applies
Conditional Acceptance and the UCC
- if acceptance is made expressly conditional on assent to the additional or diff terms, nonconforming acceptance will not be effective
- Majority says that the words of 2-207 signify conditional acceptance
- Minority says there has to be a clear manifestation of unwillingness to do business
Contracts formed by Conduct under UCC
conduct in recognizing the existence of a K is sufficient to establish a K even though writing don’t establish a K
