Quiz 3 Flashcards
2 ways for silent acceptance to be viable:
1) when offeror is justified in expecting a reply or offeree is under a duty to reply
2) when offeree knows his silence will be misinterpreted
Continuing offer
an offer that was not revoked and the offeror shows by language and from the nature of the transaction that he does not require notice of acceptance, apart from performance
acceptance by performance– If offeree has reason to know that offeror has no means of learning of the performance with reasonable certainty, contractual duties of offeror are discharged.. unless:
1) offeree exercises reasonable diligence to notify offeror
2) offeror learns of the performance within reasonable time
3) offer indicates that notification is not required
Unilateral K
A promise by the offeror seeking acceptance by way of performance only (typically ads offering rewards, prizes, or non-commercial arrangements between relatives and friends)
How is an option contract created?
When the offeree tenders or begins the invited performance of a unilateral K or tenders a beginning of it
beginning of performance
- creates irrevocability through manifestation of assent
- serves as a promise to complete performance
MUST be part of the actual performance invited in order to create irrevocability
preparations for performance
NOT enough to justify beginning, but may constitute reliance sufficient to create irrevocability
Reliance
When the offeree undergoes substantial expense, undertakes commitments, or forgoes alternatives to put himself in position to accept
May be sufficient to create irrevocability/make the offeror’s promise binding
Distinction between beginning and preparing for performance depends on:
- extent to which offeree’s conduct is clearly referable to the offer
- the definite and substantial character of that conduct
- extent to which it is of actual benefit to the offeror rather than the offeree
- prior course of dealing and terms of communication between parties
bilateral K
A promise by the offeror seeking a promise or performance in return; most commercial arrangements are bilateral K’s
An offer is binding as an option K if it:
a) is in writing and signed by offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
b) is made irrevocable by statute
Two ways an offer to a unilateral K can be made irrevocable
1) beginning of performance (creates an option contract)
2) preparation for beginning of performance (if it is deemed to be reliance)
Professor Norberg’s Miranda rule for K formation
Anything you don’t say, can’t be used against you in the law of K
