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25 Cards in this Set
- Front
- Back
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What is the tentative working guide for an offer?
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A definite, conditional promise manifesting a present intent to enter into a binding, final agreement.
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What are the issues around the finality of an offer?
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- The words used in the offer
-- "quote" vs. "offer", words that are only invitations to an offer) - The context of the proposal -- Real property agreements have higher standards; agreements to agree no good) -- Dealings with third party indicate that offer hasn't been made -- Closeness of relationship between P and D -- Proposals made in jest/anger/at social engagements - The size of the class of offerees -- Generally, advertisements to a large group of people are not an offer. -- However, if ad is definite (first come, first served, quantity and time), then may still be offer. - Contemplation of subsequent formalities -- Generally, extended negotiations do not require formal paperwork -- Except when explicitly called for by one party |
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What are considered material terms of an offer?
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Material terms are: Quality, Quantity, Price, Terms of Payment, Terms of Delivery.
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How does the UCC step in on various Definiteness issues?
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Generally, UCC relaxes the definiteness standards (intention of the parties + method of determining the remedy is enough):
- Gap Fillers: Give default values if unsettled in the offer. Notably, Quality and Quantity are not covered. - Quantity in reference to something else is okay (Output/Requirements Ks) - Terms to be specified by one party are okay, as long as that party specifies terms that are commercially reasonable and in good faith. |
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How can indefiniteness in an offer be mitigated?
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- Expert testimony
- Industry Norms - Incorporation of terms by reference - Employment contracts can often be terminated at will; no duration term is necessary. |
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How much time until an offer terminates?
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-- Explicit duration, if given. Otherwise, "reasonable" depending on subject matter, rate of price fluctuation, etc.
-- Face-to-face offer usually terminates at end of conversation. -- Extensions: depend only on offeror's subjective desire. Do not require that offeree knew. |
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What is the SoA on how the superveining death or mental incapacity of the offeror affects the validity of the offer?
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Terminates the offer.
Majority: notice to offeree not required. Minority: notice required. |
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How can an offeror revoke the offer?
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Directly: Language interpreted loosly, in favor of offeror.
Indirectly: If offeree hears that the offer is no longer available, it is terminated. However, stricter standard: - some communication of intent to revoke - communication is a true one - communication comes from a reasonable source - tenor of the communication must destroy all reasonable expectation of performance |
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What are the offeree's methods of terminating the offer?
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- Outright rejection
- Outright counter-proposal - Qualified Acceptance Remember, language is key. Language that inquires into the possibility of a change of terms does not count as a counter-proposal. |
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What limits might there be on the power to revoke an offer?
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- Option Contracts supported by consideration
- Part Performance by the offeree - Promissory Estoppel - UCC 2-205: Offers by merchants are forced to remain open |
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How can an option contract be terminated?
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higher standards than normal offer:
- Death of offeror/offeree - express rejection by offeree |
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What is the tentative working guide for an acceptance?
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An eligible offeree with knowledge of the offer and intent to accept gives the requested return, unconditionally.
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What is an "Eligible Offeree"? What is an exception to the rule?
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Generally, the offeree indicated by the offeror.
Option contracts are transferable, however. |
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What are the methods of termination of an offer?
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- Supervening Death or Mental Incompetancy of the Offeror (SoA)
- Offeree's Supervening Death or Incompetency - Lapse of Time - Revocation by Offeror - Termination by Offeree - Supervening Illegality |
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Does the acceptance have to be at the forefront of the offeree's mind for the acceptance to be valid?
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Nope.
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What are the rules for acceptance if the offeree is silent?
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Generally, silence means no acceptance.
There are exceptions, however. - If there was active solicitation and a substantial delay, the offer is considered accepted. - Accepting goods, keeping them without saying anything, or exercising dominion over them in any way is an acceptance. - UCC: Receiving goods for use is acceptance. Use includes holding for resale. |
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What are the requirements for the offeree "giving the requested return"?
What is the legal status of a given method of acceptance? |
- Making a promise (bilateral K)
- Performing an act (unilateral K) If, the method is: - Required, then must use that method. - Suggested, then this method is valid. Acceptance on dispatch - Reasonable, then Majority say effective on dispatch. Minority say effective on receipt. - Unreasonable, then effective on receipt. |
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What are the rules for determining whether the offeree must communicate the acceptance?
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If expressly required by the offer, then that is honored.
If not expressly required: - Bilateral Ks generally require communication of the acceptance. Specific language can negate this requirement. - Unilateral Ks do not require communication if performance itself will notify the offeror in a reasonable period of time. |
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What are the rules for determining the method that the offeror must use to communicate the acceptance?
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Common Law:
Required means only that method. Suggested means that any reasonable method is okay. Reasonableness means a mode of acceptance similar or faster than the mode of the offer. UCC: relaxes this further. Even if mode was unreasonable, if the acceptance arrives in a reasonable amount of time, it's valid. |
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When is an acceptance or a rejection valid: on dispatch or receipt?
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If the method was unreasonable, then valid on receipt.
If reasonable, then Mailbox Rule: Rejections are valid on receipt, Acceptances on dispatch. Exceptions to the Mailbox rule: - Exlplicit language in the offer to the contrary. - Improper dispatch (e.g. wrong address) means that acceptance is valid on receipt. Again, UCC allows it to be effective on dispatch if it arrives in the same amount of time. - Legally overaking Acceptance (SoA) - Physically overtaking Rejection (SoA)) |
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What are the opinions on Legally Overtaking Acceptances?
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- The acceptance is effective only on receipt. Thus, either party can walk.
- The K is voidable by the innocent party. - The Mailbox Rule is applied mechanistically. Thus, the acceptance is effective, having been dispatched first. Exception only if innocent party has detrimentally changed position. |
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What are the opinions for a Physically Overtaking Rejection?
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If offeror didn't detrimentally change position, then the Mailbox Rule is applied. Acceptance is binding.
If the offeror did detrimentally change position, then the K is voidable by the offeror. |
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What is the common law view on whether an acceptance is unconditional?
If it was conditional, what are the legal consequences? |
An acceptance is conditional if there is a difference in terms that is:
- Express (not implied) - Insisted upon (no precatory language) - Material Any difference meeting these criteria is a condition; substantive of procedural. If it was conditional, it kills the original offer. It may in of itself consitutite a valid counteroffer (evaluate.) |
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What are the "last shot" and "escape hatch" problems?
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These are are problems with the CL mirror-image analysis of offer acceptance. Often, there is a series of document exchanges with varying terms. The timing of performance can determine an unfair advantage to one party or another:
If there's a falling out before performance, the offeree can point to any small difference to invalidate the acceptance. If there's a falling out after performance has commenced, the offeror gets all of the terms of his document incorporated. The UCC addresses these issues (for goods only, of course) |
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Describe how UCC 2-207 works.
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1) If there was a written response that has differing terms, it may still be an acceptance:
- any dickered terms must match - it must not expressly require acceptance of the differing terms If criteria are met, go to 2) Failing this, go to 3) 2) For a layperson the new terms are not added to the contract. For merchants, the new terms are added, unless: - the original offer expressly forbids new terms - the new terms materially alter the K - notification of objection to the new terms is given in a timely manner 3) Even failing 1), a K is formed if the conduct of the parties recongnizes the K. In this case, the K is the terms upon which the two docs agree, plus gap-fillers for the rest. |
