Terms Required in the Offer

Question 1

For an offer to be valid, what is required?

Answer 1

Certain terms MUST be specified in the offer in order for the offer to be valid.

Question 2

Under common law, what must be in the offer?

Answer 2

Under common law, all essential terms must be specified in the offer. Generally, this includes the following four terms:

1. Parties;
2. Subject;
3. Quantity; And
4. Price

Question 3

Under the UCC, what must be in the offer?

Answer 3

Under the UCC, the law is more willing to plug the gaps. Unlike the common law, PRICE IS NOT REQUIRED in the offer. Generally, only three terms are required under the UCC:

1. Parties;
2. Subjects; AND
3. Quantity

Question 4

Does the UCC require output contracts and requirement contracts to specify an exact quantity?

Answer 4

NO

Question 5

What is an output contract?

Answer 5

In an output contract, the seller agrees to sell his entire production to the buyer.

Question 6

What is a Requirement Contract?

Answer 6

In a requirement contract, the sell agrees to sell as much as the buyer would require.