Chapter 10 BLAW 3021
what is the first sign of mutual assent?
valid offer and valid acceptance
when is an acceptance effective?
when it is sent
When is a revocation effective?
when received
when are counteroffers effective?
when received
When is a rejection of an offer effective?
when received by the offeror
when is acceptance after a prior rejection effective?
when received by the offeror
when is there an effective acceptance of an offer to enter into a unilateral contract?
when the offeree has fully performed what was asked of him in the offer
Can you reject an offer by inaction?
yes
Irrevocability offer of unilateral contract
a unilateral offer may not be revoked for a reasonable time after performance has begun, offeror would make a unilateral offer and try to revoke it while the offeree is performing the task (like someone cleaning your pool)
Irrevocable Offer of Unilateral Contract
a unilateral offer may not be revoked for a reasonable time after performance is begun
General Rule for Communication of Acceptance
acceptance effective upon dispatch unless the offer specifically provides otherwise or the offeree uses an unauthorized means of communication
Unauthorized Means
acceptance effective when received, provided that it is received within the time within which the authorized means would have arrived
Unauthorized Means of Acceptance
acceptance effective when received, provided that it is received within the time within which the authorized means wouldhave arrived
According to general (common) contract law, the ______________ must be the ____________ of the offer.
acceptance; mirror image
If an offer has no stated time by which it must be accepted, when does the offer terminate?
after a reasonable period of time
Mail Box Rule
an acceptance is valid when dispatched, as long as the communication is correctly addressed (can opt out of this)
who would likely be considered a merchant under the UCC with respect to the goods in question?
an authorized apple computer dealer selling accessories for apple computers and apple related products
what is an advertisement?
an invitation to make an offer or an actual offer
To be effective an offer must:
be communicated to the offeree.
To be effective, an offer must:
be communicated to the offeree.
For purposes of general contract law (common law) an offer must:
be sufficiently definite and certain
For purposes of general contract law (common law), an offer must:
be sufficiently definite and certain
how do parties usually show mutual assent?
by one party making an offer in words or by conduct and the other party accepting in words or by conduct
Mirror Image Rule
except as modified by the code, an acceptance cannot deviate from the terms of the offer
what does a unilateral contract require for acceptance?
let the offeror know of your intent to accept
an offer for the sale of goods under the UCC:
must include the quantity
Do preliminary negotiations and advertisements constitute offers?
no that does not create sufficient intent
Promissory Estoppel
noncontractual promise that binds the promisor because she should reasonably expect that the promise will induce the promisee (offeree) to take action in reliance on it
Catamount Slate Products, Inc. v. Sheldon
objective standard case (was an offer made)
Destruction of subject matter
of an offer terminates the offer
Death or Incompetency
of either the offeror or the offeree terminates the offer
Subsequent Illegality
of the purpose or subject matter of the offer terminates the offer
what is subsequent illegality?
offer becomes illegal after it is accepted; this terminates the offer
Statutory Irrevocability
offer made irrevocable by statute
Lapse of Time
offer remains open for the time period specified or, if no time is stated, for a reasonable period of time
Lapse of time
offer remains open for the time period specified or, if no time is stated, for a reasonable period of time
Definiteness
offer's terms must be clear enough to provide a court with a basis for giving an appropriate remedy
what is the general rule of acceptance?
offeree must communicate acceptance in a bilateral contract; in a unilateral contract, offeree must communicate acceptance only if the offeror has no reasonable means to learn of the offerees acceptance through performance
Communication
offeree must have knowledge of the offer an the offer must be made by the offeror to the offeree
Communication (essential of offer)
offeree must have knowledge of the offer, and the offer must be made by the offeror to the offeree
Silence as Acceptance general rule:
offeree should not be legally obligated to affirmatively reject an offer, unless there is historical performances of this action.
Definiteness (Essentials of an Offer)
offers terms must be clear enough to provide a court with basis for giving an appropriate remedy
Osprey v. Kelly-Moore Paint (landlord)
- Kelly had 15-year commercial contract, and delivered renewal notice on the last day by fax - Landlord tried to kick them out bc contract said renewal "shall" be given in writing--> eviction suit - Bc they said "shall" and "may" be delivered in person or via email, they lost because "may" - and fax served the same purpose
Sherrod v. Kidd
-Duration of offer -Kidd's dog bit Sherrod -Kidd's offer settlement of 31,843 (offer neither accepted or rejected) -Arbitrator awarded 25,069 -Sherrod's GAL accepted Kidd's offer one year later Court said offer hadn't been withdrawn -Supreme court said offer expired when arbitrator announced the award -Trial Judge's decision REVERSED
Lefkowitz v. Great Minneapolis Surplus Store deals with
-Unilateral Contract Advertisement -Ad states that the first person in the store with a dollar in their hand will receive the fur coat advertised -lower court states advertisements are not offers; they invite you to make an offer -State supreme court says that this specific ad had so many terms that the ad crossed over the boundary and became a unilateral contract
which of the following offers can be revoked?
-any offer made by a merchant under the UCC -any offer that is in writing that promises to leave the offer open for three months or less -any offer in writing, signed and promises to leave the offer open whether it is made by a merchant or not
what are ways offers can be terminated?
-death or incompetency -destruction of subject matter -Subsequent illegality -lapse of time -Revocation -Rejection -Counter offer
which is correct about the UCC's "Battle of the Forms" rule?
. The UCC battle of the forms rule changes the common law's mirror image rule. . The UCC battle of the forms rule may result in a contract with terms that are not identical to the terms included in the offer. . What gets included in the final contract terms may depend upon whether the parties are merchants.
what are the essentials of an offer?
1. Communication 2. Intent (objective standard) 3. Definiteness
Bill faxes Harry an offer at 9 a.m. on Monday and the fax arrives at Harry's office at 9:02 a.m. Monday. Because Harry is taking a vacation day on Monday, he does not read the fax until Tuesday at noon. Harry decides to accept Bill's offer and tells his assistant at 3 p.m. Tuesday to prepare an acceptance for his signature. The acceptance is placed on Harry's desk at 4:45 p.m. Tuesday. Harry signs the acceptance and gives it to his assistant to fax back to Bill at 9 a.m. Wednesday. The assistant does so immediately; however, due to malfunctioning of Bill's fax machine, Bill does not receive Harry's acceptance until Friday morning. The offer is effective at __________ and the acceptance is effective at __________.
9:02 Monday; approximately 9 a.m. Wednesday
Offeree
A person to whom an offer is made.
Offeror
A person who makes an offer.
Furniture Store runs an ad in the local Sunday newspaper announcing a special Veteran's Day offer of a free Brandname chairside table to the first three veterans who come into the store on Veteran's Day. The ad states the price of the table, the dimensions, the SKU#, and what the table is made of. Other parts of the ad indicate the store's location and its hours. Joe is a Veteran. He goes to the store on Veteran's Day, but he arrives after the hours listed in the ad and the store has closed. Joe sticks a post-it on the store door saying that he is a veteran and wants the table. Which of the following statements is correct about his offer?
According to the court in Osprey L.L.C. v. Kelly-Moore Paint Co., Inc., Joe's sticking a the post-it on the door of the store is not the authorized means of accepting the store's offer and is not likely be considered a sufficient substitute for the ad's requirement that the offer be accepted by coming into the store because it does not ensure that the offeror will receive the acceptance at all and it does not ensure that the acceptance will be received before the offer has expired by its terms.
The Jones' have always admired a house that sits on the top of a hill owned by the Smiths. Martin is a mutual friend of both the Jones and the Smiths. One day, Martin mentions to the Smiths how much the Jones would love to buy the Smith home. The Smiths say that if they sell the house, they would be happy to sell it to the Jones. Martin relays this conversation to the Jones and the Jones immediately call the Smiths to accept the Smith's offer to sell. Have Smiths made an offer to sell their home to the Jones?
All of these are correct
Which of the following offers cannot be revoked?
An offer to pay the high school student next door if he will take in your mail when you go on vacation regardless of whether he promises to take in the mail, if the revocation is before your return from vacation but after he has collected your mail for all the days that you have been on vacation up until the revocation.
Osprey v. Kelly Moore Paint deals with
Communication of Acceptance-
Chase and Tyler are best friends and fellow police officers. One day, Chase came home with a brand new, top-of-the-line Ford F-150 4x4 pickup valued at $38,000 and showed it to Tyler. Tyler told Chase that he wanted a truck just like his. Jokingly, Chase says, "Sure thing, buddy. I'll sell you my new pickup for $100 and a six-pack of beer!" If Tyler seeks to accept Chase's offer, what is Chase's best defense?
Chase intended the offer as a joke and a reasonable person would understand it to be a joke.
Which of the following will terminate an offer?
Destruction of the subject matter of the offer.
Sherrod v Kidd deals with
Duration of Offer, Offer had terminated
Bill offers to sell his house to Harry for $90,000. Harry tells Bill he will buy the house for $90,000 if Bill will fix the roof. Bill says he is not interested in fixing the roof. Harry then tells Bill he will still buy the house. Bill tells Harry the house is no longer for sale to Harry. Which statement is true?
Harry's counteroffer terminated Bill's offer, and Bill's rejection of both Harry's counteroffer ($90,000 plus fix the roof) and offer ($90,000) leave Bill free to make a new offer to sell the house to anyone he chooses, including Harry, and under any terms he chooses as long as the terms are not illegal.
Furniture Store runs an ad in the local Sunday newspaper announcing a special sale on a Brandname chairside table. The ad states the price of the table, the dimensions, the SKU#, and what the table is made of. Other parts of the ad indicate the store's location, the hours, and a website where purchases may be made online. Joe goes online and places an order for the table. Two months later, Furniture Store sends Joe an email notifying Joe of the store's acceptance of his order and charges his account. Joe no longer wants the table. According to the court in Sherrod v. Kidd:
Joe is not likely to be contractually bound to this purchase because two months is likely to be more than a reasonable amount of time within which the store had to accept Joe's offer.
Jose offers to sell George his iPad 3 for $150 and explains that George has five days to accept. After three days, Jose accidentally drops his iPad 3 from his third-floor apartment balcony, shattering it into tiny pieces. On the fourth day, George, who does not know that the iPad was shattered, notifies Jose that he accepts the offer. Do Jose and George have a valid contract?
No, the destruction of the iPad terminated Jose's offer.
Sam emailed Bob offering to sell him his 1970 Corvette for $7,000. Later, Sam finds out 1970 Corvettes which are in excellent condition and have all the original parts sell for closer to $57,000. He changes his mind about selling his Corvette to Sam for $7,000. Which of the following statements about the offer is correct?
Sam can revoke his offer to Bob at any time so long as there is still an offer to revoke.
Sam emailed Bob offering to sell him his 1970 Corvette for $7,000 and also said that he would give Bob two weeks to accept Sam's offer before he started advertising the Corvette for sale. One week later, Bob learns that Sam has sold his 1970 Corvette to Terry. Which of the following statements about the offer is correct?
Sam's action of selling the car to Terry is a revocation of his offer to Bob.
Contractors bidding on jobs, when they submit offers or bids then for a period of time they are not allowed to revoke them because the govt does not want to deal with that, this is an example of a:
Statutory Irrevocability
Betty is looking at the grocery ads in the newspaper and sees that canned tuna is on sale for 6 cents. Because this is an amazingly low price, she rushes off to the grocery store. She loads 10 cans into her cart, goes to the checkout counter and hands the cashier 60 cents. The cashier asks for $6.90 and tells her that the tuna is 69 cents per can and that the ad was a misprint. Betty demands that the tuna be sold to her for 6 cents a can. Which of the following statements about the ad is correct?
The ad is an invitation for others to make offers. Betty has made an offer to buy the tuna for 6 cents a can and the grocer has rejected Betty's offer, but countered with an offer to sell it to Betty for 69 cents per can.
Objective Standard
Would a reasonable person believe that a serious offer was made based on the Offeror's conduct.
Firm offer
a merchant's irrevocable offer to sell or buy goods in a signed writing ensures that the offer will not be terminated for up to three months
firm offer
a merchant's irrevocable offer to sell or buy goods in a signed writing ensures that the offer will not be terminated for up to three months
Option Contract
contract that binds offeror to keep an offer open for a specified time
what makes the world go around?
counter offers
Counteroffer
counterproposal to an offer that generally terminates the original offer
Intent
determined by an objective standard of what a reasonable offeree would have believed
Intent (Essentials of an Offer)
determined by an objective standard of what a reasonable offeree would have believed
Defective Acceptance
does not create a contract but serves as a new offer
Furniture Store runs an ad in the local Sunday newspaper announcing a special sale on a Brandname chairside table. The ad states the price of the table, the dimensions, the SKU#, and what the table is made of. Other parts of the ad indicate the store's location, the hours, and a website where purchases may be made online. Joe goes to the store to purchase the table but sees another very similar table that is not on sale ("the regularly priced table"). He offers to buy the regularly priced table from the store for the sale price of the Brandname table. The store says that it cannot sell it at the sale price, but it can sell it for 10% off the listed price. Joe says that is too much money to spend for the regularly priced table. Joe continues to shop around. Seeing nothing he likes, he decides to buy the regularly priced table for 10% off. When he goes to pay for the table, the store charges him full price. If challenged in court, the court is most likely to:
find that the Joe's initial rejection of the store's offer to sell the regularly price table for 10% off effectively terminated that offer; that Joe is now making an offer to purchase the regularly priced table for 10% less than the asking price; and the store is free to accept or reject Joe's offer.
Acceptance Following a Prior Rejection
first communication received by the offeror is effective
Revocation
generally, an offer may be terminated at any time before it is accepted, subject to the following exceptions (option contract, firm offer, statutory irrevocability, promissory estoppel)
what does a counteroffer result in?
immediate rejection and a new offer
Definition (essential of offer)
indication of willingness to enter into a contract
Retail stores typically put advertisements in newspapers describing goods and stated prices. These ads are generally considered to be:
invitations to buyers to make an offer to buy the goods described
Retail stores typically put advertisements in newspapers describing goods and stating prices. These ads are generally considered to be:
invitations to buyers to make an offer to buy the goods described
What is an exception to duration of an offer?
option contract, firm offer, statutory irrevocability, Irrevocable offer of unilateral contract
Acceptance of an Offer
positive and unequivocal expression of a willingness to enter into a contract on the terms of the offer
Rejection
refusal to accept an offer terminates the power of acceptance
what does bilateral contract require for acception?
requires an overt act, express it in a big way
what was the claim in the Catamount Slate v Sheldon case?
that there was a breach of contract
the mirror image rule relates to which required element of a contract?
the acceptance
Stipulated Provisions (Communication of Acceptance)
the communication of acceptance must conform to the specification in the offer
what contract was in question in the Catamount Slate v Sheldon case?
the contract that was made by the mediator, which stated that there would be no contract if the agreements were not signed by both parties (objective intent)
Offer
the manner in which parties usually show mutual assent (by offer and acceptance)
what must the parties at least lay out in an agreement?
the material terms in case of a breach
what must you need for a firm offer to occur?
the merchant and signed writing that contains a PRICE and term that is enforceable
Authorized means of communication
the restatement and the code provide that unless the offer provides otherwise, acceptance is authorized to be in any reasonable manner
Furniture Store runs an ad in the local Sunday newspaper announcing a Veteran's Day special on a Brandname chairside table. The ad states the price of the table, the dimensions, the SKU#, and what the table is made of. Other parts of the ad indicate the store's location, the hours, and a website where purchases may be made online. If Joe goes into the store sometime during the day on Veteran's day and tries to buy a Brandname chairside table, but is told the store has sold out of that particular table, according to the court in Lefkowitz v. Great Minneapolis Surplus Store, Inc.:
the store is not likely to be in breach of contract because the facts and circumstances regarding its ad indicate that the ad was intended to be like most ads—an invitation for the public to make an offer—and the store did not accept Joe's offer.
what happens when you try to accept an offer you already rejected?
there is a new offer created, and the roles are reversed
what was the outcome of Catamount Slate v Sheldon?
there was no breach of contract because there was never a binding agreement
What does the UCC provide if material terms are not laid out in an offer?
they provide ways to fill these gaps in case there is not detail on the terms