Restatement

Question 1

Restatement 24: Offer: Elements

Answer 1

A. The manifestation of willingness to enter into a bargain,
B. So made as to justify another person in understanding that
C. His assent to that bargain is invited
D. And will conclude it

Question 2

Restatement 26:
Preliminary negotiations: A manifestation of willingness is not an offer IF:

Answer 2

B. Offeree knows or has reason to know
C. That the person making it doesn’t intend to conclude a bargain
D. Until he has made a further manifestation of assent

Question 3

RSTMT 20: Misunderstanding

Answer 3

If both parties know/don’t know, no K. If one party knows, then K in favor of the one that didn’t know

{There is no mutual assent if
the parties attach materially different meanings to their manifestations; and
Neither party knows or has reason to know; or (accidental misunderstanding)
Both parties know or have reason to know (purposeful misunderstanding)

There is mutual assent to one of the parties’ meanings if
One party does not know of the other’s special meaning, while the other knows of the one party’s special meaning; or
That party has no reason to know of special meaning, and the other party has reason to know of special meaning}

Question 4

RSTMT 21: Requirement of Intent

Answer 4

Neither real nor apparent intention that a promise be legally binding is essential for the formation of a contract.

{Exceptions created by R33, UCC 2-205/2-305 for arguments missing important terms, such will only be enforced if parties intended to be bound}

Question 5

Restatement 25: When promises may not be offers, same thing as R26

Answer 5

1. If from a promise, manifestation of intent, or from circumstances,
2. the person to whom the promise is addressed
3. knows or has reason to know that the person making it doesn’t intend it as an expression of a fixed purpose until he has given a further expression of assent,
4. he has not made an offer.

Question 6

Restatement § 30 Forms of acceptance invited

Answer 6

(1) An offer may invite or require acceptance to be made by

A. an affirmative answer in words,

B. or by performing or refraining from performing a specified act,

C. Or may empower the offeree to make a selection of terms in his acceptance.

Question 7

R32: When does an offer invite acceptance?

Answer 7

(2) An offer invites acceptance unless otherwise indicated.

Question 8

R33: Certainty

Answer 8

(1) Even though a manifestation of intent is intended to be an offer, it can’t form a contract unless the terms are reasonably certain

(2) Reasonably certain: if they provide a basis for determining breach and appropriate remedy

(3) One or more terms being open or uncertain may show that a manifestation of intent is not intended to be an offer or acceptance

“Reasonably Filling In the Blanks”

Question 9

R39: Counter Offer

Answer 9

(1) A counter offer is “relating to the same subject matter” and proposing a bargain differing from the original proposed by the offer

(2) An offeree’s power of acceptance is terminated by making a counter offer,

Question 10

R40: Time when Rejection/Counter-Offer Terminates the Power of Acceptance

Answer 10

Whichever one reaches the offeror first is binding

Question 11

R45: Option Contract Created by Performance or Tender

Answer 11

Where offeror invites an offeree to accept solely by performance, an option contract is created when the offeree begins the invited performance or tenders a beginning of it.

Question 12

R54: Acceptance by performance.

Answer 12

No inherent requirement to communicate (Default rule)

Question 13

R56: Acceptance by promise

Answer 13

Reasonable effort to notify the offeror required (Except R69: Silence)

Question 14

R59 + R61: Adding terms in acceptance

Answer 14

59: A reply that purports to be an acceptance but adds additional terms or requirement of performance is not an acceptance.

(Exception to the Mirror-Image Rule) 61: But an acceptance that requests a change is not invalidated unless acceptance is made to depend on an assent to the requested change.

Question 15

R63(a) Mailbox Rule: Unless the offer provides otherwise,

Answer 15

(a) an acceptance made in the manner and medium invited by the offer is operative when put out of the offeree’s possession regardless of whether it reaches the offeror

(b): Acceptance under an options contract is not valid until received by the offeror

Question 16

R65: Reasonableness Of Medium Of Acceptance

Answer 16

(1) Unless circumstances known to the offeree indicate otherwise,

(2) a medium of acceptance is reasonable if
A. it is the one used by the offeror;
B. or one customary in similar transactions at the time and place the offer is received

Question 17

RSTMT 69: Silence

Answer 17

(1) Silence default rule: Silence does not constitute acceptance

(2) Silence is acceptance when
A. Offeree takes the benefit of offered services
B. Where the offeree gives reason to understand silence is acceptance and offeree intends to accept by silence
C. Where because of previous dealings, it is reasonable that the offeree should notify offeror if they don’t intend to accept

Question 18

Restatement 87: Option Contract
An offer is a binding option contract if

Answer 18

(1) In writing, signed, recites a purported consideration, and proposes an exchange;

or

(2) Is made irrevocable by statute

(3) Options contracts can also be made in a similar way to promissory estoppel

Question 19

R90: Promissory Estoppel

Answer 19

A promise is binding despite lacking consideration in which the promisor:

(1) Should reasonably expect to induce action or forbearance
(2) Does induce such action or forbearance
(3) Injustice can be avoided only by enforcing the promise

Remedy may be limited depending on circumstances
(2) This requirement waived in cases of marriage settlement or charitable subscription. (Generally used for written, but not oral promises.)