Chapter 10

UCC acceptance- step 2 4

*if merchants: additional terms automatically become part of contract ---3 exceptions to prevent from becoming automatically a part of contract: 1. said this offer is limited to terms 2. if the offeror objects to additional terms within a reasonable time 3. if additional terms substantially change the original offer

DDRRIIL- revocation 3

*merchants firm offer (UCC rule): merchant deals with goods- if they give in writing in assurances that offer will be kept open for certain period, then it must be kept open, if don't put in period it can't exceed 90 days, you don't need consideration, this is like option contract but it is dif because you don't need consideration and deals with goods -if 1 of the 3 exceptions apply, it suspends offerors power to revoke, it not present then they can revoke

DDRRIIL- revocation 2

-3 exceptions limiting power to revoke: option K, merchants firm offer, unilateral offer on which substantial performance has already begun *if started performance it suspends offerors power to revoke *option contract: no contract yet, still in stage between offer being given, it is an offer but that offer has within it an actual contract that the offer will be kept open for the offeree- made to counteract the general rule, that the offer can be revoked, this option contract makes it so offeror can't take back the offer (so if the offeror tried to break it, it is a breach of option contract), you need to have consideration for this

Acceptance w/Varied Terms

-Acceptance w/varied terms creates dilemma as to whether terms included in the contract are those of offeror or offeree. It depends. -If the terms are different, they are considered proposals for addition to the contract that must be negotiated in or they won't be part of the K. *Different changes the terms to something else: offer for car to acceptance of truck -If the terms are additional, there is a further inquiry *Additional leaves original terms and adds to them

Mirror Image Rule

-Common law rule -Acceptance must be unequivocal -Acceptance cannot in any way change the original offer -If it does, it is considered a counteroffer that terminates the original offer -The offeree is now the offeror and the offeror is now the offeree, each with the powers of that position

3 Requirements for Offer

-Definiteness -Intent -Communication -must have these 3 to be an offer

Silence as Acceptance

-Generally the offeror is under no duty to reply to an offer. -Offeror cannot make silence acceptance, i.e., "if I don't hear from you by Tuesday, we will have a deal." -Silence can be acceptance if it is the custom between the parties, the offeree has led the offeror to believe silence is effective as acceptance, or it is the common usage in the trade -Unsolicited goods sent by offeror are considered a gift and need not be returned.

Authorized Means of Acceptance

-Generally, an offer must be accepted in any way that the offeror demands -Under the UCC and common law, any reasonable means is effective as long as it is reasonably calculated to be as effective as the situation demands, i.e., it would be unreasonable to send an acceptance by pony express if the offeror had telegraphed the offer, signifying time was important -If an acceptance is sent by unauthorized means, it is effective if it reaches offeror in the original time specified

Additional Varied Terms

-If terms are additional, determine: *If contract is between merchants (both pties merchs) or *Not between merchants (one or both not merchs) *If not between merchants, its treated as different terms that must be negotiated in *If between merchants, the additional terms automatically become a part of the contract, unless: ---Offer is limited to its terms ---Offeror objects w/i 10 days of receipt ---Acceptance substantially changes the offer -If any of these, use rule for different terms

Communication of Offer

-Must be by offeror or offeror's agent -Must be to the intended offeree *Reward offers *Ads *Auctions -Cannot be by happenstance

Definiteness of Terms

-Must be specific. -Difference between common law and UCC -UCC allows gap-filling *Minimum of quantity, quality, price ---Minimum-Maximum ok ---Requirement Contracts ---Output Contracts -No such provision in common law *Needs all terms of agreement

Acceptance

-Must be unequivocal under common law -Mirror Image Rule -May vary terms under UCC -Must be timely -Must be in way offeror requested. O'or has complete control over the offer -Must be by intended offeree or his/her agent -Acceptance may be direct or indirect -Acceptance if effective when sent, if done correctly -If not done correctly, it is effective when rec'd by o'or

UCC Acceptance

-No presumption that changing terms is counteroffer -If acceptance terms are not the same as offer, creates: *Acceptance with varied terms -Acceptance is effective and creates contract if: *Definite - seems to want K *Seasonable - within specified or reasonable time for acceptance *Not conditioned on offeror's acceptance of offeree's varied terms

Mutual Assent 2

-Offer *Make sure its not terminated -Acceptance

Effective Times

-Offer is effective when received by offeree -Acceptance is effective when sent correctly by offeree -If an offer is initially rejected, then accepted, the first to reach the offeror is effective -A rejection is effective when received by the offeror -A revocation is effective when received by the offeror -The only thing effective when sent is the acceptance

Acceptance After a Prior Rejection

-Offeree intitially rejects the offer -Offeree then changes his/her mind and wants to accept the offer -The rule of an acceptance being effective when sent does not apply -The first to reach the offeror is effective

Revocation by Offeror

-Offeror can revoke any time prior to acceptance, unless: (can be either of 3 things): *Option contract -needs consideration *Unilateral offer upon which substantial performance has begun *Merchant's firm offer - UCC rule "If it's blue, think U(CC)! No need for consideration, but, must have ---Written, signed ---Assurances ---By merchant ---That offer will be kept open (<90 days)

Intent to Create an Offer

-Offeror must intend to create an offer to contract -Must not be in: *Jest (joking) - bartender's house *Great anger - car breaks down—again :-/ *Great excitement or danger *Mere inquiry

Duration of Offers

-Offers can be terminated by the DDRRIIL: *Death of either party *Destruction of the subject matter w/o fault of party *Rejection by offeree *Revocation by offeror *Incapacity of either party *Illegality of subject matter after offer made *Lapse of stated or reasonable time

Rejection by the Offeree

-Only offeree has the power to reject -Can be done directly or indirectly -Effective when received by offeror -Common law - Mirror Image Rule -If not precise match, it's a counteroffer -terminates original offer *Offeree becomes offeror and vice versa *Rule not same for UCC

Definition of Offer

-Proposal by offeror that sets up in the offeree the power to conclude a contract by agreeing to it

DDRRIIL- lapse of time

-either stated time or reasonable time if not given -ex. says you must accept by Jan 2 and you don't then the offer is gone, if not stated time these could be lapse of a reasonable time (depends on circumstances)

DDRRIIL- destruction of subject matter through no fault of the parties

-ex. offer to sell car and before person says yes the car gets destroyed (must be at no fault of parties- ex. lightning strikes car)

restatement acceptance

-have to accept it exactly how it is offered to you- if you change the offer in any way it is considered rejection (unequivocal rejection)- so it would terminate the original offer- if counter you are now the offeror and the other person becomes the offerree -so must accept as normal or it is rejection (original offer is dead) -this is called the mirror image rule (offer must be same in the acceptance)- does not operate in the UCC- only in restatement

termination of offer

-have to make sure offer is still alive and has not been terminated before

UCC acceptance- step 2 3

-if additional: figure out if between merchant or non merchants (is buyer and seller both merchants), if not merchants either 2 people that are not/1 person is and 1 is not *if non merchants: use same rule as for dif- unless negotiated in you are stuck with same original contract

UCC acceptance- step 2 2

-if dif: consider proposals that have to be negotiated in, in order to be accepted or the terms do not get accepted in, if offeror says no to terms then go back to original contract and that is what you have, you are not terminating the contract by bringing in these terms *if additional terms not negotiated in then you have original contract (you already have a contract since got past step 1, so cannot say no or would be breach of contract (offeree cannot say no)

UCC acceptance

-if you give an acceptance that changes the offer it is called an acceptance with varied terms -if this happens, have to deal with 2 step process: 1. is there a contract 2. what are the terms of the contract if there is one

DDRRIIL- illegality

-legal when made offer but now illegal (ex. prohibition)

Communication

-must be in comm- orally or in writing (must be there and hear about it)- if you just hear about it from someone then does not count)- could go through an agent if you have an authorized agent

Definiteness

-need to definitely know what it is that is being committed to it -3 things to keep in mind: 1. gap filling 2. min and max 3. requirement and output

Definiteness- min and max

-no specific quantity, but says min and max that you have to be between, ok to have this since you have parameters to deal with so it is still ok here (for UCC)

DDRRIIL- revocation

-offer can be revoked only be offeror -general rule: can be revoked anytime prior to acceptance (if not accepted, it can be taken back) -exception: unilateral offer where you have already started to perform offer (don't have to finish doing it), the offeree still has the offer, offeror cannot revoke it here

Offer

-offeror: gives offer -offerre: receives offer

DDRRIIL- rejection

-offerree has the power to reject -when you do not accept offer by offeror

Definiteness- gap filling

-ok to leave things to out- will fill in gaps for you- so still meets definiteness (as long as in UCC), gaps ok

DDRRIIL- incapacity

-parties were fine before but you become incapacitated (physically, mentally, emotionally) -so now no longer offer on table

Definiteness- requirement and output

-requirement says i will provide you with all these requirements you need but not quantity but it is still ok since it is a requirement contract (they will give you what you require) -output says providing/taking all of the output that someone creates for a certain period (ex. I will take all the sweaters you make from jan-dec), it is ok for quantity to be left out here

DDRRIIL- death

-terminates offer -if either 1 of the parties die

DDRRIIL

-these 7 things can terminate the offer and make it no longer there before acceptance -offer is out there (meet DIC) but has not gotten to acceptance -in after stage checking to make sure offer is alive 1. death 2. destruction of subject matter through no fault of the parties 3. revocation 4. rejection 5. illegality 6. incapacity 7. lapse of time

advertisements

-they are not offers- when go into a grocery, you are offeror

UCC acceptance- step 1

-was the acceptance definite, seasonable, and not conditioned on the offerree changing the contract of the offeror- not conditioned on offeror having got accept offerrees new terms (these 3 things) 1. seasonable: certain amounts of time, if not given then it is a reasonable amount of time 2. definite: have to see if response was definite or not (ex. if say yes do this but change day to monday- then this is not definite), must be fully saying yes

Intent

-wha it is that you meant when you entered into this offer, what did you intend to do -subjective v objective intent *subjective is what you are thinking *objective is what is manifested *objective governs here

Mutual Assent

-what is the nature of the agreement -made up of 2 dif things: 1. offer 2. acceptance -if don't have either of the 2 then not a contract

UCC acceptance- step 2

-what the terms are, was what you proposed in the new contract different terms or was it additional terms 1. additional terms: takes what there is and add to it 2. dif terms: change what was in the original in a specific way

UCC acceptance- step 1 2

3. not conditioned on offeror having to accept offerrees proposed terms: can't have changing and you must accept it -must have these 3 pieces to have a contract- if don't then there is not a contract, if do then go to step 2