Offer & Acceptance

Question 1

An offer requires…

Answer 1

1. an outward manifestation- can be oral, written, or via conduct
2. a signal that acceptance will conclude the deal

Question 2

What are 3 common multiple offeree situations?

Answer 2

CAR

1. commercial advertisements
2. auctions
3. rewards

Question 3

What are the rules for commercial ads?

Answer 3

1. 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)

Question 4

what is the legal effect of an offer?

Answer 4

an offer gives the offeree the power to create a K by accepting the offer

Question 5

what are 4 ways to terminate the power of acceptance?

Answer 5

1. lapse of time- reasonable time; if face to face, at the end of the convo
2. death or incapacity of either party
3. 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
4. rejection by the offeree- outright rejection; counteroffer; nonconforming acceptance (mirror image rule); doesnt include mere inquiry

Question 6

What is required for the revocation of an offer made to multiple offerees?

Answer 6

1. functional equivalents rule, unless there is a better means of notification that is reasonably available.

Question 7

How does the UCC treat nonconforming acceptance?

Answer 7

rejects common law for the shipment of nonconforming goods and the “battle of the forms”

Question 8

What are the 3 requirements for an enforceable option K in common law?

Answer 8

1. an offer
2. a subsidiary promise to keep offer open
3. 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

Question 9

What is the UCC Firm Offer Rule?

Answer 9

1. 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
2. offer cant be open longer than 3 months, after that consideration is required.
3. one can be a merchant based only off knowledge

Question 10

What happens if its unclear whether an offer must be accepted by promise or performance?

Answer 10

1. the offerree is free to choose the means of acceptance

Question 11

When can a unilateral offer be revoked?

Answer 11

1. 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

Question 12

How do you communicate acceptance?

Answer 12

1. mirror image rule
2. 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)

Question 13

In what 3 instances is acceptance by silence allowed?

Answer 13

1. when offeree takes benefit with a reasonable opportunity to reject them and knows of offerors intention
2. where offeror has given offeree reason to understand that silence is acceptable
3. previous dealings tell offeree that he should tell offeror he doesnt plan to accept

Question 14

what is the mailbox rule?

Answer 14

1. 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
2. Parties are bound even in acceptance is lost in transmission

Question 15

How does a party accept under the UCC?

Answer 15

1. unless contrary terms exist, in ay manner by any medium reasonable under the circumstance

Question 16

Under the UCC what are 3 ways a seller can accept a buyers offer to purchase goods?

Answer 16

1. promise to ship goods in conformity with the terms of the offer (acknowledgment)
2. prompt or current shipment in conformity with the terms
3. shipping nonconforming goods UNLESS seller labels its as an accodomation

Question 17

What is the “Battle of the Forms” situation between merchants?

Answer 17

1. unless acceptance is expressly made conditional on assent to the additional or different terms, nonconforming acceptance is effective and forms a valid K
2. 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)
3. different terms are knocked out

Question 18

What is the “Battle of the Forms” situation if a consumer is involved?

Answer 18

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.

Question 19

Written Confirmations if a consumer is involved

Answer 19

Any additional or different terms are mere proposals

Question 20

Written Confirmations between 2 merchants

Answer 20

any additional terms are automatically part of the K UNLESS:

1. they would materially alter the K; or
2. 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

Question 21

Conditional Acceptance and the UCC

Answer 21

1. if acceptance is made expressly conditional on assent to the additional or diff terms, nonconforming acceptance will not be effective
2. Majority says that the words of 2-207 signify conditional acceptance
3. Minority says there has to be a clear manifestation of unwillingness to do business

Question 22

Contracts formed by Conduct under UCC

Answer 22

conduct in recognizing the existence of a K is sufficient to establish a K even though writing don’t establish a K