Contract- A promise for the breach of which the law gives a remedy or the performance of which the law in some way recognizes as a duty
1. Mutual Assent
2. Consideration
3. Object of the agreement is not prohibited by law
OFFER AND ACCEPTANCE
I. OFFER- to invite a deal, only an answer of yes will conclude the deal
A. Restatement 24 Offer Defined
Offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it
Lonergan (buyer) v Skolnick (seller)à Skolnick wins
Rule: an ad is generally not an offer. A form letter is not a K, merely an intention to find out if the other party is interested
· Facts: Seller put an ad in the paper for land. Buyer inquired and they exchanged information
· Reason: the ad was a for the general public, letter sent was form letter sent to more than one person-the terms listed were not exclusive to that particular buyer. The original ad was just a request for an offer
Seller
Specific words
Why would we not expect “yes” to conclude the deal
Ad
Ads typically do not define-no price set
Ads are merely requests for offers
Letter
“This is a form letter”
Multiple copies sent, indicates that there are multiple buyers interested
Hypo
Letter but no indication that it is a form letter
Has facts but no words of commitment to this buyer
Hypo
“if you except within a week…”
Yes- commitment to this buyer
Hypo
Form letter to 6 best customers “we promise you each a ton, just sign and its yours”
Yes-commitment to this buyer, specific assent will conclude a deal
Lefkowitz (buyer) v. Great Minneapolis (seller)à Lefkowitz wins
Rule: an ad can be an offer if it is clear, concise, and definite that acceptance completes the deal
· Facts: Seller place a first come, first serve ad in the newspaper. Buyer was first one at store. Seller would not sell to him b/c he was not a woman-this was not stated in the ad
· Reason: the terms in the ad were clear, concise, definite and explicità no room for negotiation. Buyer’s acceptance concluded the Kà made offer binding
* Two prong test:
o Clear, definite, explicit; AND
+ = no negotiation
o Acceptance will make it binding
+ “yes” will conclude the deal
* Ad #1: “3 coats worth up to $100”
o Fails first prong—“worth up to”
o Passes second prong
* Ad#2:
o Passes first prong
o Passes second prong.
Seller’s manifestation
Conclusion (K?)
For buyer to expect yes will conclude the deal
2nd ad “fist come, first served”
Yes
1) Clear and definite statementànothing left for negotiation
2) buyer was not worried about other buyersà he was the first one there
Hypo: 2nd ad with out “first come, first serve” clause
No
No commitment to any one buyerà not specific to any person, therefore the ad is not an offer
II. NOTIFICATION OF ACCEPTANCE
A. Restatement 50 Acceptance and Offer
1. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited by the offeror
2. Acceptance by Performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise
3. Acceptance by Promise requires that the offeree complete every act essential to the making of the promiseà ex. EVERTITE
B. Restatement 54 Acceptance by Performance
Where an offer invites offeree to accept by rendering a performance, no notification is necessary to make effective, unless notification is required by the offer
C. Restatement 56 Acceptance by Promise
Acceptance by promise must be seasonably communicated to the offeror to constitute acceptance
Ever-Tite (seller) v. Green (buyer)à Ever-Tite wins: application of R 50, 54
· Rule: Acceptance by performance occurs when performance begins. If no time is specified, a reasonable time will be implied. After acceptance, the offer cannot be revoked.
· Facts: Seller drafted K for re-roofing. Buyer signed a form that said, “Performance or notification will bind K.” Workers packed and drove to site where another crew was already there.
· Reason: performance and thus acceptance began when they loaded the trucks. Acceptance by performance was invited. There was no time limit specified by the buyer
· Cannot revoke an offer after there has been acceptance
Hendricks (escrowee) v. Behee (buyer,OFFEROR)à Behee wins: application of R 42, 56
· Rule: Acceptance by promise must be communicated TO OFFEROR in order to form a Kà no notification = no K.
· Facts: Offeror made an offer. Offeree indicated acceptance by communicating to his own agent. Offeror withdraws the offer before he is notified that offeree has accepted.
· Reason: K was accepted by promise but offeror was not notified before the withdrawal, not bindingà offeror may withdraw at any time before acceptance is communicated
Notice of Acceptance
Hendricks
Ever-Tite
Was acceptance tried before offer was revoked
Yes: promise- signed agreement
Yes: performance (act)
Where was method set forth
Written offer
In the offer- “upon commencing performance of work”
Does this method require notice to offeror
Yes- there is no K until acceptance of an offer is communicated to the offeror
NO- no notification is necessary to make acceptance effective, unless the offer specifically requests a notification
What
Is K effective?
CCEPT OR REJECT THE COUNTEROFFER
PROBLEM
(296)
(CHART IN CLASS)
BUYER
SELLER
NO K
K
Offer not accepted…
Offer accepted..
Offer didnt mention acceptance by performance (+didn’t ship-2-206)
But…2-206(1)(a)
But…offer didn’t mention acceptance (ever-tite)
Ordering from suppliers…(2-206(1)(b) construed as acceptance
Seller didn’t acknowledge pronto (2-206(2))….(i.e. Give notice-behee (house notice)
But…acceptance by performance needs NO notice (ever-tite)
IV. “VARYING” ACCEPTANCE
A. UCC 2-207: 3 ways of entering into a Kà Additional Terms in Acceptance or Confirmation(UCC DOES NOT COVER SERVICES RENDERED, ONLY GOODS…SERVICES=COMMON LAW)
1. A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
B. Restatement 39 Counter Offers
A counter offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offerà ex. Minneapolis
C. Restatement 59 Purported Acceptance w/ Additional Terms
A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms a additional to or different from those offered is not acceptance but is a counter offerà ex. Minneapolis
Minneapolis (buyer) v. Columbus (seller)à Columbus wins: application of R 39, 59
· Rule: varying acceptance constitutes a rejection of the offerà power of acceptance is terminated by the making of a counter offer
· Facts: Seller quotes prices and Buyer attempts to order an amount less than what was quoted: ordered 1200 when seller’s # was 2000-5000. Seller refuses order. The buyer’s order was outside the range of the offer and therefore was a counteroffer.
· Reason: acceptance of terms varying from the offer is a rejection of offer so there is no K. When buyer then ordered amount in the seller’s range this was not effective acceptance b/c the offer was goneà the deal was closed when they made a counter offer
Idaho Power (buyer) v Westinghouse (seller)à Westinghouse wins: application of UCC 2-207(1)
