The Agreement: Offers and Acceptances Flashcards
What is the only way to form a contract
have a meeting of the minds. one side must make an offer and the other must make an acceptance
Offer
proposes definite terms
Offeror
person who makes the offer
Offeree
the person to whom he makes that offer
Two questions that determine whether a statement is an offer
- do the offerors words and actions indicate an intention to make a bargain
- are the terms of the offer reasonably definite
Invitations to bargain
an invitation to bargain is not an offer
ex: consider selling vacation home
Price quotes
a price quote is generally not an offer
ex: sends prices for new year to regular customers
Letter or intent
a letter that summarizes negotiating process
Advertisement
merely a request for offers . generally not an offer
Landmark case: Carill v. Carbolic smoke ball company
- carbolic smokeball company ran a newspaper ad
- the product was a ball that contained carbolic acid
- Carlill purchased, used as directed for 2 months, she caught the flu, and sued
- she argued her response to the ad had created a contract with the company and she was entitled to $100
- trial court agreed awarding the money
- company appealed
- did the advertisement amount to an offer?
- appeal dismissed
Consumer protection statute
outlaws false advertising
Auctions
used to sell items.
- placing an item up for auction is not an offer- it is a request
- the bids are the offers
- MOST IMPORTANT: with/without reserve
Reserve auction
items for sale have a minium price
Without reserve auction
there is no mimimum. once the first bid received the auctioneer mist sell the merchandise to the highest bidder
Problems with definiteness
- terms of offer must be definite
- if they are vague, the even if the offeree agrees to the deal, a court does not have enough information to enforce it and there is contract
gap filler provisions
UCC rules for supplying missing terms
Output contract
obligates the seller to sell all of his output to the buyer, who agrees to accept it
Requirements contract
obligates a buyer to obtain all of his needed goods from the seller
termination of offers
once an offer has been made it faces only two possible fates:
- terminated
- accepted
Revoked
when the offeror “takes it back” before the offeree accepts
-can revoke any time before the offer has been accepted
Termination by rejection
if an offeree rejects an offer, the rejection immediately terminates the offer
Counteroffer
responds to an offer with anew and different proposal
Termination by expiration
when an offer specifies a time limit for acceptance, that period is binding
-if the offer specifies no time limit the offeree has a reasonable period in which to accept
Termination by operation of law
if an offeror dies or becomes mentally incapacitated the offer terminated automatically and immediately
Making contracts temporary irrevocable
some offers can not be revoked, at least for a time
Option contract
(all types of contract) the offeror may not revoke an offer during the option period
Mirror image rule
required that acceptance be on precisely the same terms as the offer
ex: add or contradict= counteroffer
UCC and Battle of Forms
- dramatically modifies the mirror image rule for sale of goods
- an acceptance that adds additional or different terms often will create a contract
Big change
an offeree wo accepts may include in the acceptance terms that there are additional to or different from those in the offer
Additional terms
those that bring up new issues
What are the 3 circumstances that the additional terms in the acceptance do not become park of the contract
- if the original offer insisted on its own terms
- if the additional terms materially alter the original offer
- if the offeror receives the additional terms and promptly object to them
communication of acceptance
the offeree must communicate his acceptance for it to be effective
-questions typically arise concerning the method, manner, and time of acceptance
Method of acceptance
refers to whether acceptance is done in person, by mail, telephone, email, fax
-must follow specifics if offer demands it
Manner of acceptance
refers to whether the offeree accepts by promising, making a down payment, by preforming, etc.
-if not specified the offeree can accept in any reasonable manner
Mailbox rule
Acceptance is generally effective upon dispatch
-terminators are effective when received
