OFFER AND ACCEPTANCE

Question	Answer
DEFINE OFFER	Communication that creates a REASONABLE EXPECTATION in the offeree that the offeror is willing to enter into the contract on the basis of offered terms. An offer creates a power of acceptance in the offeree and a corresponding liability on the part of the offeror.
Issues to consider when determining if communication is an offer	(1) Was there an expression of a PROMISE, UNDERTAKING, OR COMMITMENT to enter into a contract? (2) Were there CERTAINTY and DEFINITENESS in the essential terms? (3) Was there COMMUNICATION of the above to the offeree?
Different between OFFER and INVITATION TO DEAL	there must be an INTENT to enter contract determined by: (1) LANGUAGE (not "I am asking $30", "I quote" or "I would consider selling for") (2) SURROUNDING CIRCUMSTANCES (not in jest or anger) (3) PRIOR PRACTICE/RELATIONSHIP OF THE PARTIES (4) METHOD OF COMMUNICATION - the broader the communicating media, the more likely court will view it as solicitation of an offer. Advertisements, catalogues, circular letters are usually construed as invitations for offers.
DEFINITE AND CERTAIN TERMS	Have enough go the essential terms been provided so that the contract including them would be capable of being enforced? (1) offeree/class of offerees identified, i.e. who has the power to accept (2) definite subject matter, i.e. what the promise is about
Definite term requirement - real estate transactions	identified land and price
definite terms requirements - sale of goods	quantity, may include "requirement" or "output" price not mandatory, will be reasonable price at the time of delivery (UCC Art 2)
definite term requirement - offer of services	nature of the work
MISSING TERMS V. VAGUE TERMS	Court may supply REASONABLE missing terms if it appears that parties INTENDED TO MAKE A CONTRACT and there is a REASONABLY CERTAIN BASIS for giving a remedy. Vague terms may only be cured by performance clarifying missing terms, or by acceptance of full performance.
TYPES OF TERMINATION OF OFFER	- by offeror - by offeree - by law
TERMINATION OF OFFER BY OFFEROR - REVOCATION	Offer may be revoked by offers by: (1) communicating the revocation directly to the offeree, (2) by comparable publication, or (3) by offeree receiving indirect information from a reliable source of offeror's act's indicating to a reasonable person that offeror no longer wishes to make an offer (learns from friend that offeror sold the car to someone else)
EFFECTIVENESS OF OFFER REVOCATION	REVOCATION is effective when received (by location, not read), unless in case of publication - where is is effective when published.
LIMITATIONS ON POWER TO REVOKE OFFER	(1) OPTIONS - consideration for a promise not to revoke offer; (2) ART 2 "MERCHANT'S FIRM OFFER: (a) merchant; (b) SIGNED WRITING; (b) written assurance that offer will be open for specified or reasonable period, but not > 3 months. If >3 - he is bound only for 3 mo if not supported by consideration. (3) DETRIMENTAL RELIANCE - offeror could reasonably expect that offeree will rely to her detriment on offer, offeree does so rely => offer will be held IRREVOCABLE as an option contract for a reasonable time OR relief for detrimental reliance (4) PART PERFORMANCE - UNILATERAL CONTRACTS - irrevocable once performance begins, reasonable time given to complete performance, but does not have to complete. Acceptance only when performance is complete. NOTE - substantial preparations are not performance, may be detrimental reliance; (5) PART PERFORMANCE - OFFER INDIFFERENT AS TO MANNER OF ACCEPTANCE - contract is formed, revocation is impossible
TERMINATION BY OFFEREE	Offeree may terminate offer by rejection or lapse of time. Rejection may be express, or by counteroffer (both a rejection and a new offer). NOTE - mere inquiry is not rejection; test is whether a reasonable person would believe that original offer had been rejected. Rejection is effective when received. Rejection/counteroffer to an option is not termination of an offer. Offeree may accept original offer unless offeror detrimentally relied on offeree's rejection.
Who MAY ACCEPT AN OFFER?	OFFEREE OR MEMBER OF CLASS. Power of acceptance cannot be assigned unless it is an option contract (offer has paid consideration to keep the offer open).
KNOWLEDGE OF OFFER	Offeree must know of the offer to have the power of acceptance. Crossing offer situation is not acceptance.
ACCEPTANCE OF UNILATERAL CONTRACT	(1) Unilateral contract is not accepted until performance is COMPLETED; beginning performance makes an offer irrevocable, but offeree is not obligated to complete performance. (2) Ther must be NOTICE of completed performance unless offeror waived notice or performance will normally be noticed within reasonable time.
ACCEPTANCE OF OFFER FOR BILATERAL CONTRACT	(1) May be accepted either by promise to perform or BEGINNING of performance. Acceptance may be in any reasonable manner and using any reasonable medium. (2) Offers to buy goods for current and prompt shipment may be accepted by promise or shipment. UCC art 2. Shipment of nonconforming goods is acceptance and breach, unless buyer notifies seller that nonconforming goods are only offered as a accommodation. Buyer does not have to accept accommodation. Accommodation rule does not apply to acceptance by promise to ship, that's just breach.
Common law "Mirror Image Rule"	Acceptance of offer must be unconditional. Different and additional terms constitute REJECTION and COUNTEROFFER
UCC Art 2 - "Battle of Forms" Provision	Proposal of additional and different terms in a definite and timely acceptance is effective as an acceptance, unless expressly made conditional on the additional and different terms. Whether new terms are included depends on whether both parties are merchants.
Is acceptance with additional terms effective for contracts other than sale of goods?	No. The "Battle of Forms" provisions is from UC Art. 2, which applies only to sale of goods.
Conditional Acceptance	When acceptance is expressly made conditional on additional or different terms, it is a rejection. Original offeror may expressly assent to them, and then the contract is formed. She cannot accept by performance. But if she ships the goods, the contract is formed by her conduct, and new terms are not included.
BILATERAL CONTRACT ACCEPTANCE	by promise or by performance
"Mailbox Rule"	Acceptance by MAIL or similar means creates a contract at the MOMENT OF DISPATCH (provided mail is properly stamped and addressed). Applies only to acceptance!
Exceptions to "Mailbox Rule" of acceptance	(1) offer stipulates that acceptance is not effective until received; (2) An option contract is involved ( an acceptance under the option contract is only effective upon receipt); (3) If offeree sends REJECTION and the ACCEPTANCE - whichever arrives first is effective; (4) If offeree sends ACCEPTANCE and then REJECTION, acceptance is effective unless the rejection arrives first and the offeror detrimentally relies on it.
Acceptance by Unauthorized Means	Effective if it is actually received by the offeror while the offer is still in existence
UCC Rules re Auction Contracts	(1) Sale is complete when the auctioneer so announces by the fall of the hammer or in another customary means. (2) Action sale is with reserve, unless the goods are explicitly put up without reserve. (3) "With reserve" means that auctioneer may withdraw the goods at any time until he announces the completion of sale.

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OFFER AND ACCEPTANCE

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	Created by Jana Slavina almost 10 years ago