Blaw ch. 10

for an offer to be effective it must have these 3 things

1. be communicated to the offeree 2. manifest an intent to enter into a contract 3. be sufficiently definite and certain

offer terminated

1. lapse of time 2. revocation 3. rejection 4. counteroffer 5. death 6. incompetency 7. destruction of subject 8. subsequent illegality

7 ways in which an offer may be terminated other than acceptance

1. lapse of time 2. revocation 3. rejection 4. counteroffer 5. death or incompetency 6. destruction of the subject matter to which the offer relates 7. subsequent illegality of the type of contract that offer purposes.

merchant

1. who is a dealer in a given type of goods, or 2. who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved. or 3. who employs an agent or broker whom he holds out as having such knowledge or skill.

advertisements that are not offers

1.) they do not contain a promise 2.) they leave unexpressed many terms that would be necessary to the making of a contract. accordingly, his customers responses are not acceptances because no offer to sell has been made. ex.) announcing that he has goods to sell, describing the goods, and quoting prices.

defective acceptances

a late acceptance does not creates a contract. after the offer has expired, it cannot be accepted. however, a late or defective acceptance does manifest a willingness on the part of the offeree to enter into a contract and therefore constitutes a new offer.

common law

an acceptance must be positive and unequivocal. it may not change, add to, subtract from, or qualify in any way the provisions of the offer. in other word, it must be the mirror image of the offer. any communication by the offeree that attempts to modify the offer is no an acceptance but a counteroffer, which does not creates a contract.

acceptance following a prior rejection

an acceptance sent after a prior rejection is not effective when sent by the offeree, but only when and if received by the offeror before he receives the rejection. thus, when an acceptance follows a prior rejection, the first communication the offeror receives is the effective one.

communication in regards to the general public

an offer may be made to the general public. no person can accept such as offer, however, until and unless he knows that the offer exists. ex) if a person without knowing of an advertized reward for information leading to the return of a lost watch, gives information leading to the return of the watch, he is no entitled to the reward.

effective moment

an offer, a revocation, a rejection, and a counteroffer are effctive when they are received. an acceptance is generally effective upon dispatch.

other options to the code and battle of the forms

because both parties are merchants and the seller and the buyer: because both parties are merchants and the sellers acceptance was not conditional upon assent to the sellers additional or different terms, then either 1. the contract will be formed without the sellers different terms unless the buyer specifically accepts them; 2. the contract will be formed without the sells additional terms (unless they are specifically accepted by the buyer) because the additional terms materially alter the offer; or 3. depending upon the jurisdiction, either a. the buyers conflicting terms will be included it the contract, b. the code will provide the missing terms, because the conflicting terms cancel each other out or c. the additional terms test is applied.

the code: battle of forms

by focusing on the intent of th parties. if the offerree does not expressly make her acceptance conditional upon the offerors assent to the additional or different terms, a contract is formed. the issue then becomes whether the offerees different or additional terms become part of the contract. if both offeror and offeree are merchants, such additional terms may become part of the contract provided that they do not materially alter the agreement and are not objected to either in the offer itself or within a reasonable period of time.

conditional acceptance

common type of counteroffer. it claims to accept the offer buy expressly makes the acceptance contingent on the offerors assent to additional or different terms. nonetheless, it is a counteroffer and generally terminates the original offer.

Example of promissory estoppel

ex. Bob plumbing co. submits a written offer for plumbing work to be used by Resolute building co, as part of Resolutes bid as a general contractor. bob knows that Resolute is relying on bobs bid, and in fact Resolute submits bobs name as the plumbing subcontractor in the bid. bobs offer is irrevocable until resolute has a reasonable opportunity to notify bob that Resolutes bid has been accepted.

silence acceptance

ex. the prospective member of a mail order club agrees that his failure to return a notification card rejecting offered goods will constitute his acceptance of the clubs offer to sell the goods. most states has prompted customers to keep these gifts as this rule as been abused by businesses.

authorized means

if in reply to an offer by mail, the offeree places in the mail a letter of acceptance properly stamped and addressed to the offeror, a contract is formed at the time and place that the offeree mails the letter. this assumes, of course, that the offer was open at that time and had not been terminated by any of the methods previously discussed. the reason for this rule is that the offeror, by using the mail, impliedly authorized the offeree to us the same mean of communication. it is immaterial if the letter of acceptance goes astray int he mail and is never received. this is any means of reasonable communication.

subsequent illegality

if performance of a valid contract is subsequently made illegal, the obligations of both parties under the contract are discharged. illegality taking effect after the making of an offer but prior to acceptance has the same effect: the offer is legally terminated.

stipulated provisions in the offer

if the offeror states that a reply must be received by a certain date or that he must hear from the offeree or uses other language indicating that the acceptance must be received by him, the effective moment of the acceptance is when the offeror receives it, not when the offeree sends or dispatches it.

general rule

in the case of unilateral offers, however, notice of acceptance to the offeror usually is not required. if, however, the offeree in a unilateral contract has reason to know that the offeror has no adequate means of learning of the offerees performance with reasonable promptness and certainty, then the offeree must make reasonable efforts to notify the offeror of acceptance or lose the right to enforce the contract.

counteroffer

is a counter proposal from the offeree to the offeror that indicates a willingness to contract but on terms or conditions different from those contained int he original offer. it is not an unequivocal acceptance of the original offer, and by indicating an unwillingness to agree to the terms of the offer, it generally operates as a rejection. it also operates an a s new offer. ex. on the other hand, joanne in her replay states that she wishes to consider the $300 offer but is willing to pay $250 at once for the set, she is making a counteroffer that does not terminate Worthys original offer.

offer

is a definite undertaking or proposal made by one person to another indicating a willingness to enter into a contract.

commercial reasonableness

is a standard detained in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case.

output contract

is an agreement of a buyer to purchase a seller's entire output for a stated period.

requirements contract

is an agreement of a seller to supply a buyer with all his requirements for certain goods. requirement contracts and output contracts both need to work in good faith for both parties. ex. a seller who operated a factory only eight hours a day before the agreement was made cannot operate the factory twenty four hours a day and insist that the buyer take all of the output. nor can the buyer expand his business abnormally and insist that the seller still supply all of his requirements.

good faith

is defined as honesty in fact in the conduct or transaction concerned. under the 2001 Revised UCC Article 1, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing.

promissory estoppel

noncontractual promise may be enforced when it is mae under circumstances that should lead the promisor reasonably to expect that the promise will induce the promisee to take action in reliance on it. this doctrine has been used in some cases to prevent an offeror from revoking an offer prior to its acceptance.

advertisements that are offers

nonetheless, a seller is not free to advertise goods at one price and then raise the price once demand has been stimulated. in some circumstances a public announcement or advertisement may constitute an offer if the advertisement or announcement contains a definite promise or something in exchange for something else. ex. like a reward.

communication in regards to authorization

not only must the offer be communicated to the offeree, but the communication must also be made or authorized by the offeror. ex) if jones tells bob that he plans to offer white 600 dollars for a piano, and bob promptly informs white of jones intention, no offer has been made. there was no authorized communication between jones to white.

revocation communcated indirectly

notice of revocation may be communicated indirectly to the offeree through reliable information from a third person that the offeror has disposed of the property he has offered for sale or has otherwise placed himself in a position indicating an unwillingness or inability to perform the promise contained in the offer. for example, aaron offers to sell his portable television set to ted and tells ted that he has ten days in which to accept. one week later, ted observes the television set in celias house and is informed that celia purchased it from aaron.

variant acceptances

on that contains terms different from or additional to those in the offer- receives distinctly different treatment under the common law and under the code.

example of communication in regards to mutual assent

oscar signs a letter containing an offer to ellen and leaves it on top of the desk in his office. later that day, ellen, without prearrangement, goes to oscars office, discovers that he is away, notices the letter on his desk, reads it, and then writes on it an acceptance that she dates and signs. no contract is formed because the offer never became effective.

auction sales

the auctioneer at an auction sales does not make offers to sell the property being auctioned but invites offers. the auctioneer is likewise free to withdraw the goods from sale unless the sale is advertised or announced to be without reserve.

without reserve

the auctioneer may not withdraw an article or lot put up for sale unless no bid is made within a reasonable time. a bidder at either type of sale may retract his bid at any time prior to its acceptance by the auctioneer; such retraction, however, does not revive any previous bid.

open terms of a contract

the code provides missing terms in a number of instances, where, for example, the contract fails to specify the price, the time or place of delivery, or payment terms. under the code, an offer for the purchase of sale of goods may leave open particulars of performance to be specified by one of the parties. any such specification must be made in good faith and within limits set by commercial reasonableness.

firm offers under the code

the code provides that a merchant is bound to keep an offer to buy or sell goods open for a stated period(or if no time is stated, a reasonable time) no exceeding three months if the merchant gives assurance in a signed writing that the offer will be held open. the code, therefore, makes a merchants firm offer enforceable even though no consideration is given to the offeror for that promise.

consideration

the inducement to enter into a contract consisting of an act or promise that has legal vale. ex. if ellen, in return for the payment $500 to her by barry, grants barry an option, exercisable at any time within thirty days, to buy Blackacre at price of $80,000, ellens offer is irrevocable. ellen is legally bound to keep the offer open for thirty days, and any communication by ellen to barry giving notice of withdraw of the offer is ineffective. barry has thirty days to accept.

Rejection

the offeree may consist of express language or may be implied from language or conduct.

revocation

the offeror generally may cancel or revoke an offer at any time prior to its acceptance. if the offeror originally promises that the offer will be open for thirty days but wishes to terminate it after five days, he may do so merely by giving the offeree notice that he is withdrawing the offer. this notice may be given by an means of communication and effectively terminates the offer when received by the offeree.

option contracts

the offeror is bound to hold open an offer for a specified period of time. it must comply with all of the requirements of a contract, including the offerees giving of consideration to the offeror.

offeror

the person making the proposal

offeree

the person to whom it is made

promise as a joke

the promise is intended as a joke, however, and the promisee as a reasonable person should understand it to be such. therefore, it is not an offer.

a promise made under obvious excitement or emotional strain

this is not an offer. ex) charlotte, after having her month old cadillac break down for the third time in two days, screams in disgust "i will sell this car to anyone for 102 dollars"

death of incompetency

this of the offeror or the offeree ordinarily terminates an offer.this also terminates the offer, because an ordinary offer is not assignable (transferable) and may be accepted only by the person to whom it was made. this does not work for an option however.

destruction of the specific subject matter

this terminates the offer. suppose that sarah, owning a buick, offers to sell the car to barbara and allows barbara five days in which to accept. three days later the car is destroyed by fire. on the following day, barbara, without knowledge of the destruction of the car, notifies sarah that she accepts sarah's offer. there is no contract.

intent

to have legal effect, an offer must manifest an intent to enter into a contract. this of an offer is determined objectively from the words or conduct of the parties. the meaning of either partys manifestation is based on what a reasonable person in the other partys postilion would have believed.

communication in regards to mutual assent

to provide his part of the mutual assent required to form a contract, the offeree must know about the offer; he cannot agree to something about which he has no knowledge.

lapse of time

unless otherwise terminated, the offer remains open for the specified time. upon the expiration of that time, the offer no longer exists and cannot be accepted. any acceptance is a new offer. if the offer does not state the time within which the offeree may accept, the offer will terminate after a reasonable time.

unauthorized means

when the method of communication used by the offeree is unauthorized, the traditional rule is that acceptance is effective when and if revived by the offeror, provided that it is received within the time during which the authorized means would have arrived. the restatement goes further: by providing that if these conditions are met, then the effective time for the acceptance is the moment of dispatch.

mirror image common law example

when the seller receives the buyers order, he agrees to the buyers quantity, price, and delivery terms and sent to the buyer on his acceptance form an unequivocal acceptance of the offer. however, on the back of his acceptance form, the seller has thirty-to numbered paragraphs generally favorable to himself and in significant conflict with the provisions on the buyers form. no contract would exist, for the seller has not accepted unequivocally all of the material of the buyers offer.

irrevocable offers of unilateral contracts

where the offer contemplates a unilateral contract that is, a promise for an act- injustice to the offeree may result if revocation is permitted after the offeree has stated to perform the act requested in the offer and has substantially but not completely accomplished it. ex. jordoan offers karlene $300 if karlene will climb to the top of the flagpole in the center of campus. karlene starts to climlb, but when she is five feet from the top, jordan yells to her, "I revoke"

preliminary negotiations

which the parties either request or supply the terms of an offer that may or may not be made. for instance, if brown writes to young "will you buy my automobile for $3000" and young replies "yes" there is no contract. brown has not made an offer to sell her automobile to young. the offeror must demonstrate an intent to enter into a contract, not merely a willingness to enter into a negotiation.

firm offer

written promise not to revoke a an offer for a stated period of time