Offer & Acceptance Flashcards
Offer
(Second Restatement § 24)
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
Requirements of a Bargain
(Second Restatement § 17)
The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
Manifestation of Mutual Assent
(Second Restatement § 18)
Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.
Offer and Acceptance Flow Chart
![](https://s3.amazonaws.com/brainscape-prod/system/cm/325/817/668/a_image_thumb.jpg?1604269543)
Conduct as Manifestation of Assent
(Second Restatement § 19)
(1) The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act.
(2) The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents.
(3) The conduct of a party may manifest assent even though he does not in fact assent. In such cases, a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating cause.
Option Contracts
An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer.
Preliminary Negotiations
A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
Certainty
(1) Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
(2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
(3) The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
Acceptance
A manifestation of assent to the terms of the offer in the manner invited or required by the offeror.
The Four Terminators before Acceptance:
- Lapse of Time (Mailbox Rule)
- Death of the Offeror
- Rejection by the Offeree
- Valid Revocation
Rejection
(1) An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
(2) A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.
Counter-Offers
(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
(2) An offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.
Qualified acceptance, inquiry, or separate offer
A qualified or conditional acceptance, which purports to accept the original offer but makes acceptance expressly conditional on assent to additional or different terms.
Time when Rejection or Counter-Offer Terminates the Power of Acceptance
Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer.
Lapse of Time
(1) An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
(2) What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made.
(3) Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in § 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.
Direct Negotiations
Where the parties bargain face to face or over the telephone, the time for acceptance does not ordinarily extend beyond the end of the conversation unless a contrary intention is indicated.
Speculative Transactions
The more significant the risk, the greater is the need for limitation, and hence the shorter is the time which is reasonable.
Mirror Image Rule
Under Common Law, acceptance must mirror offer, any change in acceptance equals a counteroffer.