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Contracts
University of Dayton School of Law
Chaffee, Eric C.

                                                 CONTRACTS       
Chaffee 2009
OFFER AND ACCEPTANCE
I.                    Contract
a.       An agreement that the law will enforce
b.      Written v. Oral Contracts
                                                              i.      An agreement may be binding on both parties even though it is oral. Some contracts, however, must be in writing under the Statute of Frauds
II.          OFFER & ACCEPTANCE
a.       Offer
                                                              i.      An offer is the manifestation of willingness to enter into a bargain, which justifies another person in understanding that his assent can conclude the bargain
b.      Acceptance
                                                              i.      An acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer
1.       After acceptance has occurred the parties have an enforceable contract assuming that there is no requirement of a writing
c.       Bilateral Contract
                                                              i.      A contract in which both parties make promises
1.       à I promise to pay you 10 dollars if you promise to give me that shirt tomorrow…
d.      Unilateral Contract
                                                              i.      a contract which involves an exchange of the offerer’s promise for the offeree’s act.
1.       **the offeree does not make a promise, just simply acts
a.       à Ill pay anyone $1,000 to walk across that bridge…. A person may take on that offer without a challenge, yet no contract has been entered into until that person crosses the bridge
e.       In deciding whether A intended to make an offer to B, the issue is whether A’s conduct reasonably indicated to one in B’s position that A was making an offer
f.        Legal Enforceability
                                                              i.      The parties intention regarding whether a contract is to be legally enforceable will normally be effective.
1.       If both parties intend and desire that their agreement not be legally enforceable, it will not be
                                                            ii.      Where the evidence is ambiguous about whether the parties intended to be bound, the court will follow theses rules;
1.       In a business context the court will presume that the parties intended their agreement to be legally enforceable
2.       In a social or domestic situation the presumption will be that legal relations were not intended
a.       à A court would not find a husband promising to pay his wife a monthly allowance legally enforceable, it arises in a domestic situation
g.      Intent to put into writing later
                                                              i.      If the parties agree to an agreement orally but state that they will formalize the agreement in writing at a later date the enforceability centers around their intention to be bound
1.       If both parties intend to be bound right away based on their oral agreement then they will be bound even though they expressly provide for a later formal written document
                                                            ii.      Where the evidence of intent is ambiguous the court will generally treat a contract as existing as soon as the mutual assent is reached, even if no formal document is ever drawn up later.
1.       For very large deals however, the court will probably find no intent to be bound until the formal document is signed
III.              Validity of Particular Kinds of Offers
a.       Offer made in Jest
                                                              i.      An offer which the offeree knows or should know is made in jest is not a valid offer
1.       Even if it is accepted no contract is created
b.      Soliciting Bids
                                                              i.      If a party solicits bids this is not an offer and cannot be accepted, instead it merely serves as PRELIMINARY NEGOTIATIONS
c.       Advertisements
                                                              i.      Most advertisements are not offers to sell. This is because they do not contain sufficient words of commitment to sell
                                                            ii.      SPECIFIC TERMS
1.       If the advertisement contains specific words of commitment, especially a promise to sell a PARTICULAR NUMBER of units, then it may be an offer
a.       à “100 mens jackets at $26 a piece, first come first serve, Saturday” this is so specific that it probably would be held to be an offer
                                                         iii.      WORDS OF COMMITMENT
1.       Words of commitment suggest an offer
a.       If a person commits themselves to take certain actions in response to a consumers action
d.      Auctions
                                                              i.      When an item is put up for auction this is usually not an offer, but is rather a solicitation of offers from the audience.
1.       Unless the sale is said to be “without reserve” the auctioneer may withdraw the goods from the sale even after the start of bidding
IV.              The Acceptance
a.       Who can accept?
                                                              i.      An offer may be

                                                                   i.      Reason to Understand
1.       Silence can constitute acceptance if the offeror has given the offeree reason to understand that silence will constitute acceptance, and the offeree subjectively intends to be bound
                                                                                                                                    ii.      Benefit of Services
1.       An offeree who silently receives the benefit of services (but not goods) will be held to have accepted a contract for them if he;
a.       Had a reasonable opportunity to reject them, and
b.      Knew of should have known that the provider of the services expected to be compensated
                                                                                                                                 iii.      Prior Conduct
1.       The prior course of dealing may make it reasonable for the offeree’s silence to be construed as consent
                                                                                                                                  iv.      Acceptance by Dominion
1.       Where the offeree receives goods, and keeps them, this exercise of dominion is likely to be held to be an acceptance
V.                 Acceptance Varying from Offer
a.       Common law “mirror image” rule
                                                              i.      The offeree’s response operates as an acceptance only if it is the precise mirror image of the offer. If the response conflicts at all with the terms of the offer, or adds new terms, the purported acceptance is in fact a rejection and counter offer, not an acceptance
b.      UCC view on the “battle of the forms”
                                                              i.      The UCC rejects the mirror image rule, and will often lead to a contract being formed even though the acceptance diverges from the offer.
1.       Wherever possible the UCC tries to find a contract, so as to keep the parties from weaseling out (as to escape market changes).
                                                            ii.      UCC §2-207