I. OFFER AND ACCEPTANCE
§24: OFFER:“an offer is the manifestation [outward showing] of willingness to enter into a bargain [by offeror], as made as to justify another person in understanding that his assent [acceptance] to that bargain is invited and will conclude it.”
· Lonegran (P) [offeror] v. Skolnick (D) [offeree], *WINNER bc mere request for an offer.
o Advertisement in newspaper for tract of land, saying “need cash will sacrifice”…inviting offers- yes would not conclude the deal
o {AD} not an offer because multiple ppl could respond (mere request for offer).
· Lefowitz (P *WINNER, bc “yes” can conclude the deal) v. Great Minneapolis Surplus Store (D)
o 1st ad saying “3 coats worth up to $100” “1st come 1st serve $1 each” NOT definite enough bc not specific item- yes will not conclude deal
o 2nd ad saying “1 Lapin Black Stole worth #139.50” “$1, 1st come 1st serve”- YES definite enough bc said specific item, its value and 1st come 1st serve- yes will conclude deal
o bc “1st come, 1st serve language made it an offer…So unlike Lonegran, not worried about other “offers” and stated specific item so it could specifically be said “yes” to conclude
§50(1): ACCEPTANCE: can be made by the offeree in any manner invited or required by the offeror
§56: Acceptance by Promise: No contract until ACCEPTANCE [of offer] is communicated to the offeror. Un-communicated intention to accept an offer is not acceptance, unless offer is supported by CONSIDERATION. An offeror may withdraw at any time before acceptance, and communicate that fact to offeree [or agent]. §50(3) Acceptance by Promise: Requires offeree to complete every act to making the promise.
· Hendricks (P) v. Behee (D) *WINNER- no contract, bc offer withdrawn before notification of acceptance. §54(1)
o K depends on the time sequence…it matters when acceptance was communicated
o Requires Notice. Notifying one’s own agent is the same as notifying one’s self.
o Acceptance by Promise. Acceptance not effective until communicated to offeror
§50(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§53: Can accept by performance only if offer invites such acceptance…rendering performance does not constitute acceptance if offeree notifies offeror of non-acceptance within a reasonable time
§54(1): Performance does not require notice, unless offer states otherwise. Power to create a k by acceptance of an offer terminates at the time specified in offer, if no time specified, at the end of a reasonable time.
· Ever-Tite [contractors] (P) *WINNER bc §54(1) acceptance by performance v. Green [home owners] (D)
o Since no actual time limit was placed on acceptance, a reasonable time must be allowed
o Commencement of performance [loading the trucks at 4 am] signified the intent to do work (allowed for in the k) – no notice of acceptance necessary
o Notice of revocation by offeror came after acceptance when workers showed up; too late
§69: Acceptance by silence
· Ammons [buyer] (P) *WINNER on rare occasion silence can make acceptance §69(1)(c) v. Wilson [seller] (D)
o In this case, due to prior course of dealings, silence can make acceptance *VERY RARE
o If the parties have an established pattern (previous dealings) of accepting by silence, silence can constitute an acceptance
§61: Acceptance which requests change of non-material terms- a request to change something doesn’t invalidate the k *unless made expressly conditional…“demonstrates unwillingness to proceed w/ k”
· Petterson (P) [debtor] v. Pattberg (D) [creditor] *WINNER no k, bc terms of acceptance were conditional upon the actual tender of money…no tender of $=no acceptance
o Terms of acceptance were conditional upon the actual tender of $ (payment in full).
o Revocation (selling to someone else) occurred before performance (tender of $)
· Audio Visual (P) [buyer] v. Sharp Electronics (D) [seller] *WINNER no k, bc acceptance was conditional
o Audio Visual’s purchase order was at most an offer, which was rejected by Sharp and no k ever existed
o HYPO: “purchase quote list” on buyer’s website…list says will pay $100 per hundred pounds of nails…seller sees list and ships buyer 1000lbs along w/ an order confirmation…buyer receives goods and promptly rejects…buyer is NOT bound
UCC: §2-206:An offer to make a contract invites acceptance in any form using any medium reasonable and an order to buy goods for PROMPT OR CURRENT SHIPMENT can be accepted by either promise to ship or actual shipment of goods.
· Swift (P) [seller] *WINNER bc acceptance by performance §2-206 v. Brice (D) [buyer]
o Before acknowledgement was mailed, Brice phone Swift and cancelled order…but partial performance was already rendered. So yes k.
o Performance does not require notice…and no notice was requested.
o The second you mail something it becomes effective…so had Swift mailed the acknowledgement and Brice called to cancel before they received it, it would still be binding.
2-206(1)(b): With proper notice a partial shipment of a customer’s order does not constitute acceptance of the order, it is merely an accommodation, and presents a counteroffer
· Corinthian (P) [buyer] v. Lederle (D) [seller] *WINNER bc promise by performance §2-206(1)(b)
o In this case, silence does not make acceptance
o A computer system taking orders does not constitute acceptance
o Lederle shipped non-conforming goods and seasonably notified Corinthian that shipment was a mere accommodation
o The shipment falls within § 2-206 as a counter offer, not an acceptance
o When the buyer receives the non-conforming shipment as an accommodation he can reject [and neither party would be in breach] or accept non-conforming goods at seller’s price
UCC:*Varying Acceptance: §2-207:[changes common law to ucc varying acceptance standard]. Quantity, Price and Item must stay same! *UCC DOES NOT COVER SERVICES, ONLY GOODS! HAVE TO APPLY §2-207 (1), (2): if there’s writing OR (3): if there’s not writing
v.
COMMON LAW:MIRROR IMAGE RULE: An offeree cannot pick and choose from among the terms of k…if main terms are varied/changed, there is a counter offer…there must be total congruence (mirror image) §59
§59:Purported Acceptance which adds qualification: changes make a counter-offer not acceptance
· Minneapolis (P) [buyer] v. St. Louis (D) [seller, manufacturer] *WINNER bc no k due to varying acceptance…follows common law bc it was before there was UCC
o No contract without mutual consent
o An offer to sell imposes no obligation until it is accepted
o Rejection or withdrawal leaves the matter as if no offer had ever been made
“BATTLE OF THE FORMS”
· Idaho Power Co. (P) [buyer]*WINNER yes k, bc rejects mirror image rule, but varying acceptance ok under §2-207 v. Westinghouse Electric Corp. (D) [seller]
o Quantity, item price and delivery date stayed same.
o 2-207(1)- can be acceptance even if it has varying terms
o Any term materially altering k would dr
e of dealing…price RANGE…range made it possible to fill in term.
§27:Existence of Contract where written memorial is contemplated
· 168th and Dodge (P) [lease] v.{RED} Rave Reviews (D) [lessor] *WINNER bc letter of intent was conditional and indefinite
o The LETTER OF INTENT expressly states that it “shall not be construed as either a lease agreement or an option to lease”…NOT definite…since it contemplates that a definite agreement may be executed in the future
o Still needed Rave’s Board to agree…MULTIPLE people had to still approve.
· Home Paramount (P) [seller, pest control] *WINNER yes k, bc met requirements of Phoenix 5-prong test v. FMC Corp. (D) [buyer]
o MD test: Phoenix 5-Prong Test to be applied to letter of agreement cases in MD
o Can LETTER OF INTENT bind parties? Decided by 5-prongs:
· 1. The language of the agreement implied k, no specific language stating were not bound
· 2. The context of the negotiations: no further negotiations after letter of intent
· 3. Open Terms: no significant open terms
· 4. Partial Performance- 2 months continued distribution after letter of intent
· 5. The custom of such transactions: History of oral agreements COURSE of DEALING
II. CONSIDERATION:LEGAL DETRIMENT suffered by promise in exchange for the promisor’s promise. Consideration is the invisible formality…needed to form k. A promise is supported by consideration if two things happen:
The promisee (the party whose receiving the promise being analyzed) gave up something of value, or had legal detriment (gave up a liberty)
The promissor made his promise as part of a bargain, that is, he made his promise in exchange for the promise’s giving of value or circumscribing of liberty
§71(1) and (2): Promise has to be “bargained for”… A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise
· Kirksey (P) [tenant, widow] v. Kirksey (D) [landlord, brother-in-law] *WINNER bc promise was a mere gratuity…no consideration. Promise not bargained for.
o It was not sought…just a conditional gift
o This was before promissory estoppel doctrine.
o D did not seek hardship; not consideration – offering a gratuity, not making a bargain
o HYPO: friend says “if you walk across street w/ me and go in store, I’ll buy you a necklace” you do…friend won’t buy necklace…no k…conditional GIFT! Not bargained
· Langer (P) [employee] *WINNER promised performance was consideration by not seeking employment w/ competition v. Superior Steel (D) [employer]
o It was to Δ s benefit that Π would not work for a competitor, because he knew all the secrets
o The promise to pay induced Π not to seek other employment, which he would have otherwise have been able to.
