Bus 5 Acceptance

Sending non-conforming goods far enough in advance of the due date and accompanying it by a written notice of accommodation ("sorry, but...") makes this act by the seller:

A counteroffer which buyer is free to accept or reject.

Exceptions to Silence as Acceptance

An established pattern of conduct between these two parties wherein offeree's silence has come to mean acceptance

Silence as Acceptance As a general rule:

An offeree's silence, without more, is not an acceptance. An offeror cannot impose a duty to respond to the offer.

Operation of the "Mailbox Rule"

As a general rule, an acceptance is effective upon dispatch.

Acceptance when a Writing is Anticipated.

Depending upon the circumstances, parties may or may not be bound if they do not sign a formal agreement.

Stipulated Means Rule

Look for language in the offer like: "Must", "required", "shall" etc. in regard to method of acceptance.

Scarlet sent Rhett letter offering to sell him Tara, her family's home. In the letter, Scarlet stated that " a response by mail is suggested." what results?

Rhett can accept if he responds by any reasonable means within a reasonable time.

Between merchants, the additional terms become part of the contract unless:

The offer expressly limited acceptance to its own terms. The new terms materially alter the offer. The offeror objects to the new terms within a reasonable period of time.

Courts look for evidence of three factors:

The offeree intended to enter the contract. The offeree accepted on the terms proposed by the offeror. The offeree communicated his acceptance to the offeror.

Acceptance in Bilateral Contracts

The offeree must make the promise requested by the offer. Acceptance can be express or implied.

The Mailbox Rule is the default rule on when an acceptance becomes effective.

The offeror, as master of the offer, can specify in the language of the offer that acceptance will only be effective upon receipt.

Cloud Nine Hospital issued a purchase order to High Times Drug Company for the prompt or current shipment of 100 units of morphine. High Time immediately shipped 100 units of Vicodin. Cloud Hospital sued for breach of contract. what results?

There is a breach of contract. High Times' shipment of non-conforming goods constituted acceptance of Hospital's offers to purchase.

Oliver writes a letter to Nancy offering to sell Nancy a drill press for $10,000. Nancy immediately sends Oliver a letter accepting his offer. Oliver never receives the letter. What results?

There is a contract between Oliver ad Nancy even though Oliver never received Nancy's acceptance. Impact timing rule of acceptance by mail box.

Merchant Buyers sent Merchant Seller a purchase order for 100 TV's containing all material terms. Sellers sent back a written acknowledgment including the same material terms, & an indemnification provision. Assume that this is neither customary in the parties' industry nor between this buyer & seller. what results under Common Law?

There is no contract between Buyer and Seller.

A contract will become binding at the moment the parties agree on all the material terms of their deal, even if they intend to write down those terms later to be prudent but never do so. True or False

True

Absent a duty to affirmatively reject the offer, an offeree's silence is not acceptance. True or False

True

An acceptance by any means other than the one stipulated does not create a contract. True or False

True

An offeror can stipulate that the acceptance only becomes effective when he actually receives it.True or False

True

The only person with legal power to accept an offer and create a contract is the original offeree or the offer's authorized agent. True or False

True

Acceptance is effective when sent

as long as it was properly dispatched.

An inquiry about the terms or a grumbling acceptance

do not constitute a counteroffer.

Operation of the "Mailbox Rule" An express contract results,

even if the acceptance arrives after the deadline.

An offer may be accepted in any reasonable manner

when the offer is unclear concerning the manner of acceptance.

Shipment of nonconforming goods

will not constitute an acceptance/breach if seller notifies buyer that the goods are shipped as an accommodation -AND They arrive far enough in advance of the actual due-date that the offeror can still locate conforming goods elsewhere

As long as a particular means is not excluded,

you could accept the offer, above, by any reasonable means.

California's courts follow

the traditional version of the mirror image rule.

Example of Silence as Acceptance

"If you don't hear from me by Friday, assume I'll buy the car at your asking price."

UCC Section 2-207 provides that:

A definite and timely expression of acceptance creates a contract; Even when the acceptance contains additional or different terms from the offer; Unless the offer expressly conditions acceptance on its own terms.

Acceptance by Shipment: Under UCC section 2-206(b) an offer to buy goods for prompt shipment can be accepted by:

A prompt promise to ship. Prompt shipment of conforming or nonconforming goods.

When Is Acceptance Communicated?

Acceptance can be communicated instantaneously, verbally or nodding "yes" or non-instantaneously, any other means of transmitting your acceptance.

Acceptance by Non-Instantaneous Communication

Acceptance communicated by mail, fax, or some other non-instantaneous means creates a time lag between dispatch and receipt by the offeror.

Acceptance in Unilateral Contracts

Acceptance is through performance of the requested act. Offeror cannot revoke once performance has begun.

Common Law Mirror Image Rule

Acceptance must be the mirror image of the offer.

Communication of Acceptance

An offeree to a bilateral contract generally must communicate his intent to be bound by the offer for a bilateral contract to come into being.

UCC Standard for Acceptance

Applying the mirror image rule to preprinted form contracts would often result in frustrating the parties' true intent.

Intending to Accept

Courts look for present intent to contract. Acceptance is judged by an objective standard.

A grumbling acceptance operates as a rejection rather than as an acceptance. True or False

False

In order to make a legally valid acceptance, the offer must always use the same means of communications as the offeror used. True or False

False

To accept and offer to enter a bilateral contract, the offer must perform the requested act. True or False

False

Reasonable versus Stipulated Means

If the offer required the acceptance to be by e-mail, however, then a telephonic "acceptance", normally reasonable, would not create a contract

The Mailbox Rule is a timing rule.

It applies to non-instantaneous forms of acceptance like U.S. mail, fax, and e-mail. It governs when an acceptance becomes effective.

University sent an email to Gaga offering to hire her for a concert weekend. The email stated that acceptance by was required to registered mail & had to be received by IUSF, before noon May 1st. Gaga sent her acceptance by carrier pigeon & IUSF received at 6pm may 1st. what resulted?

No contract was formed because there was no legally sufficient acceptance. This is the Stipulation Rule.

B wrote a letter to A offering to sell his farm. B's letter was a legally sufficient offer & was received on October 26. A wrote out a letter of acceptance, but he received an email from B revoking his offer before he could mail the acceptance. A mailed his acceptance anyways & it was received on October 28. is there a contract between B and A?

No, because B revoked his offer before A could accept it. Example of Timing rule:

Who Can Accept an Offer?

Only the original offeree or her authorized agent, can accept an offer.

Manner of Communication

Stipulation

T wrote S, " I have a '66 Chevy Impala which I will sell you for $2,000. If I don't hear from you before Sunday, I will assume that you want it & will ship it to you." S never answered T's letter. Is there a contract?

T does not have a contract with S. General rule of silence: is Silence doesn't apply as a acceptances.

Intent and Acceptance on the Offeror's Terms

The Common Law and UCC standards for acceptance differ.

Battle of the Forms

The UCC changed the mirror image rule for contracts involving the sale of goods.

Both Merchants, Buyers sent Seller a purchase order for 100 TV's which contained all material terms. Sellers sent back a written acknowledgment, including the same material terms, & an indemnification provision. Assume this is neither customary in the parties' industry nor between this buyer & seller. what results under U.C.C.

There is a contract between Buyer and Seller, but it does not include the indemnification provision.

If the offer stipulates a means of acceptance, then the new use of another means will not be an acceptance. True or False

True

If the offeree uses an expressly authorized means for accepting the offer, the acceptance becomes effective when sent. True or False

True

Most acceptances are effective upon dispatch, even if the offeror never receives them. True or False

True

Offers who accept an offeror's performance knowing what the offeror expects in return have impliedly acceptance the offeror'r terms. True or False

True

A writes B, "I will sell you one carload for $5,000." B writes back, "I accept. You are to pay the freight to your place of business & I will have 30 days in which to pay." Assume that A & B are merchants, & that these shipment & payment terms are customary in their industry. What is the result?

Under the U.C.C., a contract exist & it includes these new terms unless offeror objects to them with in a reasonable time following their receipts.

What Is an Acceptance?

a manifestation of assent to the terms of the offer: in the manner required by the offer or, if no particular manner is required, than through a reasonable means of communication.

Battle of the Forms Under the UCC,

an express contract may be formed even when there is some variance between the terms of the offer and acceptance.

If the offer does not require a particular means of acceptance,

any reasonable means of communication is effective.

Acceptance by a stipulated means will result

in a contract, assuming that the acceptance is a timely one.

Common Law Mirror Image Rule, Any attempt to add or change term

is considered a counteroffer.

An authorized means "you may accept by registered mail"

is optional, not mandatory.

"Properly dispatched" means

it had the right postage and address or if it was an e-mail or fax, it was sent to the right address or fax #.

Acceptance by any means other than the means

stipulated by the offeror will result in No contract -- even if the acceptance arrived early!!

As a general rule, of Acceptance by Non-Instantaneous Communication

the mailbox rule determines when such responses are effective.

The offeree may accept by any reasonable means of communication if

the offer does not stipulate that the offeror must use a particular method of communication.

Stipulation

the offeror has the power to specify the precise time, place, and manner in which the acceptance must be communicated.

If non-conforming goods arrive on the due date and the buyer can't get the goods originally ordered elsewhere:

the shipment of non-conforming goods is considered an acceptance of the original offer to buy as well as a breach.

Situations where the offeree indicates that his or her own silence

will constitute acceptance.