Chapter 10

An alteration or a modification of a product by a party in the chain of distribution that absolves all prior sellers from strict liability.

Supervening Event

The enactment of a statute, regulation, or court decision that makes the object of an offer illegal and then terminates the offer.

Supervening Illegality

A response by an offeree that contains terms and conditions different from or in addition to those of the offer. A counteroffer terminates an offer.

A Counteroffer

A stated time period after which an offer terminates. If no time is stated, an offer terminates after a reasonable time.

A Lapse of Time

A manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts

Acceptance

Rule that states that an acceptance is effective when it is dispatched, even if it is lost in transmission.

Acceptance-Upon-Dispatch Rule

Not one of the parties required to enter into a contract. Acceptance refers to a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts.

Acceptor

An invitation to make an offer, or an actual offer

Advertisement

Refers to the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his or her assent to that bargain is invited and will conclude it.

An Offer

A sale in which a seller of goods offers goods for sale through an auctioneer.

Auction

An auction in which the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid.

Auction Without Reserve

An auction in which the seller retains the right to refuse the highest bid and withdraw the goods from sale. Unless expressly stated otherwise, an auction is an auction with reserve.

Auction with Reserve

A rule that states that an offeree must accept an offer by means expressly specified in the offer or, if there is no such requirement, then by any means customary in similar transactions, usage of trade, or prior dealings between the parties.

Authorized Means of Communication

Not one of the parties required to enter into a contract. A counteroffer is a response by an offeree that contains terms and conditions different from or in addition to those of the offer. A counteroffer terminates an offer.

Counterofferor

An offeree's response to an offer that is not clear, unambiguous, or has more than one possible meaning. Does not create a contract.

Equivocal Response

A means of communication for accepting an offer to enter into a contract that is specified in the offer (e.g., registered mail).

Express Authorization

Terms in offers and contracts that expressly identify the parties, the subject matter of the offer or contract, the consideration to be paid by the parties, and the time of performance, as well as other terms of the offer and contract

Express terms

A means of communication for accepting an offer to enter into a contract that is inferred from what is customary in similar transactions, usage of trade, or prior dealings between the parties.

Implied Authorization

A missing term that is not expressly stated in an offer or a contract that can reasonably be supplied by the courts if a reasonable term can be implied from other sources.

Implied Term

A general rule that states that an advertisement for the sale of goods, even at a specific price, is not treated as an offer

Invitation to Make an Offer

AKA the acceptance-upon-dispatch rule, states that an acceptance is effective when it is dispatched, even if it is lost in transmission.

Mailbox Rule

Rule that states that for an acceptance to exist, the offeree must accept the terms as stated in the offer. Any attempt to accept the offer on different terms constitutes a counteroffer, which rejects the offeror's offer.

Mirror Image Rule

The party to whom an offer to enter into a contract is made

Offeree

The party who makes an offer to enter into a contract. The offer sets forth the terms under which the offeror is willing to enter into the contract.

Offeror

A contract that is created when an offeree pays an offeror compensation to keep an offer open for an agreed-on period of time

Option Contract

The acceptance of an offer must be properly addressed, packaged in an appropriate envelope or container, and include prepaid postage or delivery charges.

Proper Dispatch

Express words or conduct by the offeree to reject an offer. It terminates the offer.

Rejection

The withdrawal of an offer by the offeror that terminates the offer.

Revocation

An award given for performance of some service or attainment. To collect a reward, the offeree must (1) have knowledge of the reward offer prior to completing the requested act and (2) perform the requested act.

Reward

An offeree's acceptance of an offer that is clear, unambiguous, and has only one possible meaning.

Unequivocal Acceptance