The Agreement: Offers and Acceptances

Question 1

What is the only way to form a contract

Answer 1

have a meeting of the minds. one side must make an offer and the other must make an acceptance

Question 2

Offer

Answer 2

proposes definite terms

Question 3

Offeror

Answer 3

person who makes the offer

Question 4

Offeree

Answer 4

the person to whom he makes that offer

Question 5

Two questions that determine whether a statement is an offer

Answer 5

1. do the offerors words and actions indicate an intention to make a bargain
2. are the terms of the offer reasonably definite

Question 6

Invitations to bargain

Answer 6

an invitation to bargain is not an offer

ex: consider selling vacation home

Question 7

Price quotes

Answer 7

a price quote is generally not an offer

ex: sends prices for new year to regular customers

Question 8

Letter or intent

Answer 8

a letter that summarizes negotiating process

Question 9

Advertisement

Answer 9

merely a request for offers . generally not an offer

Question 10

Landmark case: Carill v. Carbolic smoke ball company

Answer 10

• 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

Question 11

Consumer protection statute

Answer 11

outlaws false advertising

Question 12

Auctions

Answer 12

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

Question 13

Reserve auction

Answer 13

items for sale have a minium price

Question 14

Without reserve auction

Answer 14

there is no mimimum. once the first bid received the auctioneer mist sell the merchandise to the highest bidder

Question 15

Problems with definiteness

Answer 15

• 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

Question 16

gap filler provisions

Answer 16

UCC rules for supplying missing terms

Question 17

Output contract

Answer 17

obligates the seller to sell all of his output to the buyer, who agrees to accept it

Question 18

Requirements contract

Answer 18

obligates a buyer to obtain all of his needed goods from the seller

Question 19

termination of offers

Answer 19

once an offer has been made it faces only two possible fates:

1. terminated
2. accepted

Question 20

Revoked

Answer 20

when the offeror “takes it back” before the offeree accepts

-can revoke any time before the offer has been accepted

Question 21

Termination by rejection

Answer 21

if an offeree rejects an offer, the rejection immediately terminates the offer

Question 22

Counteroffer

Answer 22

responds to an offer with anew and different proposal

Question 23

Termination by expiration

Answer 23

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

Question 24

Termination by operation of law

Answer 24

if an offeror dies or becomes mentally incapacitated the offer terminated automatically and immediately

Question 25

Making contracts temporary irrevocable

Answer 25

some offers can not be revoked, at least for a time

Question 26

Option contract

Answer 26

(all types of contract) the offeror may not revoke an offer during the option period

Question 27

Mirror image rule

Answer 27

required that acceptance be on precisely the same terms as the offer
ex: add or contradict= counteroffer

Question 28

UCC and Battle of Forms

Answer 28

• dramatically modifies the mirror image rule for sale of goods
• an acceptance that adds additional or different terms often will create a contract

Question 29

Big change

Answer 29

an offeree wo accepts may include in the acceptance terms that there are additional to or different from those in the offer

Question 30

Additional terms

Answer 30

those that bring up new issues

Question 31

What are the 3 circumstances that the additional terms in the acceptance do not become park of the contract

Answer 31

1. if the original offer insisted on its own terms
2. if the additional terms materially alter the original offer
3. if the offeror receives the additional terms and promptly object to them

Question 32

communication of acceptance

Answer 32

the offeree must communicate his acceptance for it to be effective
-questions typically arise concerning the method, manner, and time of acceptance

Question 33

Method of acceptance

Answer 33

refers to whether acceptance is done in person, by mail, telephone, email, fax
-must follow specifics if offer demands it

Question 34

Manner of acceptance

Answer 34

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

Question 35

Mailbox rule

Answer 35

Acceptance is generally effective upon dispatch

-terminators are effective when received