Offer and Acceptance

Question 1

essentials of an offer

Answer 1

an offer gives the offer the power to create a contract by acceptance.

three elements must be present:
communication
intent
definiteness

Question 2

communication

Answer 2

the offered must know about the offer in order to accept it, and it must be made or authorized by the offeror

Question 3

intent

Answer 3

an offer must show intent to enter into a contract

terms don’t have to be absolutely specific, but only that intent to contract is clear

Question 4

are advertisements offers?

Answer 4

not usually
they are invitations to make an offer
**can be offer if terms are clearly stated and all that is required of the offer is some specific action

Question 5

offers made in jest

Answer 5

if a reasonably prudent person would believe that the offeror was serious in making the statement, it is binding

Question 6

promises made under extreme conditions

Answer 6

the person did not actually have intent

Question 7

auction sales with reserve vs without reserve

Answer 7

with reserve - the auctioneer may withdraw the goods and the bidder may withdraw the bid at any time

without reserve - the auctioneer may only withdraw the goods put up for bid if no bid is made within a reasonable time

**unless advertised as without reserve, it is considered to be reserve

Question 8

definiteness

Answer 8

statement made under common law doesn't have to cover all possibilities, it must be sufficiently clear on main terms like
subject matter of contract
price
quantity
quality
terms of payment
duration

Question 9

output and requirements contract

Answer 9

output - agreement of a buyer to purchase a sellers entire output for a stated period
requirements - agreement of a seller to supply a buyer with all of the buyers requirements for certain goods; exact quantity of goods not specified in contract

Question 10

are requirements contracts enforceable?

Answer 10

common law - not enforceable
UCC - enforceable by the use of an objective standard based on good faith of both parties; neither party can substantially change his pattern of business after making the agreement

Question 11

what terminates an offer?

Answer 11

lapse of time
revocation
rejection
counteroffer
death or incompetence of the offeror or offer
destruction of the subject matter to which the offer relates
subsequent illegality of the type of contract proposed by the offer

Question 12

lapse of time

Answer 12

remains open for a reasonable time unless a specified time is stated

**if its stated, the period begins to run on the day the offeree receives it

Question 13

revocation

Answer 13

an action done by the offeror

have to communicate revocation BEFORE the acceptance

Question 14

exceptions to general rule regarding revocation

Answer 14

option contracts
firm offers under the code
statutory irrevocability
irrevocable offers of unilateral contracts

Question 15

option contracts

Answer 15

some consideration is given by the offer thus binding the offeror to hold open an offer for a specified time

Question 16

firm offers under the code

Answer 16

a merchant is bound to keep an offer to buy or sell goods open for a stated period or a reasonable time if no time is stated if he gives assurance in a signed writing that it will be kept open

in absence of consideration, such period of irrevocability cannot exceed three months

Question 17

statutory irrevocability

Answer 17

under which certains offers such as bids made to a state and pre incorporation stock subscription agreements are irrevocable

Question 18

irrevocable offers of unilateral contracts

Answer 18

offer may not be revoked for a reasonable time once the offer has begun performance

Question 19

rejection

Answer 19

an offeree may accept or reject an offer as he desires

once the offeror accepts the rejection, the offer terminates and the offeree cannot change his mind and accept

Question 20

counteroffer

Answer 20

terminates the original offer

an inquiry doesn’t terminate

Question 21

death or incompetency

Answer 21

death or incompetency of either the offeror or offeree terminated the offer

**DOES NOT TERMINATE OPTION OFFER

Question 22

destruction of subject matter

Answer 22

terminates the offer

Question 23

subsequent illegality

Answer 23

if the performance of subject matter of an offer becomes illegal after the offer is made but before it is accepted, the offer is terminated

Question 24

rules of offer and acceptance

Answer 24

1. offer is effective upon receipt (communication)
2. revocation is effective upon receipt (communication)
3. rejection is effective upon receipt (communication)
4. counteroffer is effective upon receipt (communication)
5. acceptance is effective upon DISPATCH (sending)

Question 25

note on acceptance

Answer 25

if a rejection is sent first and as acceptance thereafter, acceptance is no longer effective upon dispatch, but rather only upon receipt, and only if received prior to the rejection

Question 26

acceptance of offer

Answer 26

necessary to create a contract and marks the moment a contract is formed

Question 27

is silence acceptance?

Answer 27

not usually

can constitute acceptance when both parties have agreed to such (book club)

Question 28

effective moment of acceptance

Answer 28

offers, revocations, rejections and counteroffers are effective when received
acceptance is effective upon dispatch

Question 29

stipulated provisions in the offer

Answer 29

acceptance must be made by the specified method in order to be valid if stipulated in the offer

Question 30

authorized and unauthorized means

Answer 30

authorized - whatever means of communication the offeror specified in the offer, or if no means was specified, the same means the offeror used when making the offer (any reasonable means to communicate, unless the offer stipulates otherwise)

unauthorized - acceptance is effective upon arrival; if unauthorized means arrive in same time period, acceptance is received upon dispatch

Question 31

acceptance following a prior rejection

Answer 31

acceptance sent after a rejection is sent is not effective on dispatch, but rather only on receipt and only if the acceptance is received first by the offeror

Question 32

defective acceptances

Answer 32

late or defective acceptance does not create a contract