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Contracts
University of Florida School of Law
Davis, Jeffrey

I. Offer and Acceptance under the Common Law—For a contract to be formed, the parties must reach an agreement to which they “mutually assent.”
            A. Offer—Manifestation of willingness to enter into bargain
1.      Communication by offeror
2.      Creating reasonable expectation in offeree (REASONABLY and ACTUALLY believe in the offer.)
a.       Look at the words and actions of the offerer to make the reasonable man case. 
b.      Example: A and B are drinking. While A is drinking, he offers to sell his farm for $50,000 to B. A also shows B the necessary paperwork the transaction and A signs the paperwork. A later argues that he did not mean for the contract too form. A contract has formed BECAUSE a reasonable person in the offeree’s position would believe that the offeror intended to contract.
c.       Example: B promises to lend money to A, but A KNOWS that B does not mean it and is joking. No contract.
3.      that offeror is willing to enter into the contract
4.      on specified terms
a.       price
b.      quantity
c.       work to be done
d.      time of performance
e.       parties involved
5.      such that offeree need only accept to for a contract
6.      Miscellaneous offer issues
a.       Intent to memorialize agreement in writing
                                                                                                   i.      If parties’ actions or words make it clear that they intend to be bound even before the legal document is drawn up, the courts will almost always find an enforceable contract.
                                                                                                 ii.      If the parties’ actions or words make it clear that they intend not to be bound until the document is drawn up, the courts will not find an enforceable contract.
b.      Restatement 20—Effect of misunderstanding—Departs from objective standard—Restatement standard departs from common law standard!
                                                                                                   i.      There is no manifestation of mutual assent to an exchange if the parties attach different meanings to their manifestations and
1.      neither party knows or has reason to know the meaning attached by the other; or
2.      each party knows or each party has reason to know the meaning attached by the other.
                                                                                                 ii.      The manifestation of the parties are operative in accordance with the meaning attached to them if
1.      that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or
2.      that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party
iii. example: Emily Edmonds wants a dog from Charles. Charles plans to give her a dog from another owner, but Emily wants the one from Charles. Misunderstanding between the parties.
B. Validity of particular kinds of offers
1. Preliminary negotiations distinguished from offers—A party desiring to contract may make a statement which is not an offer but rather a solicitation of bids. 
a.       example: P tells D that he would like to buy his house for $6,000. D tells P that it would not be possible to sell it unless he received $16,000 in cash. P says that he accepts. D says that he did not give an offer. Held for D.
b.      If D had said: “I will sell it for $16,000.” Then offer.
2. Price quotations distinguished from offers
a.       The quote will only be an offer if it makes clear the quantity in question. Normally, quotations are not offers. The quotations are not specific as it does not contain information on quantities, dates of performance, etc. Also, a reasonable person is not likely to believe that a quotation

      v.      party seeking relief must give prompt notice
b. Example: Elsinore Union Elementary School Dist. V. Kastorff: D made a clerical error on his worksheets when figuring his bid on a project to make addition to P’s building. P went ahead and accepted the bid with knowledge of the error that D had made.
            C. Method of acceptance—Objective manifestation is what counts
1. The offer may be accepted only by a person in whom the offeror intended to create the power of acceptance. (restatement 50)
2. Effect of part performance without knowledge of offer—An offeree who learns of an offer after he has rendered part of the performance requested by the offer may accept by completing the requested performance. (restatement 51)
2. The offeror is the master of his offer and may prescribe the method by which it may be accepted. For instance, he may require that it may be accepted by telegram, letter, signature, etc.
                                    a. Bobby submitted a letter to Gregg offering a water purification
                                    system and stating that a contract for purchase would arise when
                                    Gregg’s order was received and approved by Bobby (invite for
offer). Gregg sent in an order on Bobby’s terms (offer), and Bobby accepted the order (acceptance).
3. Acceptance of a bilateral contract—This will usually be done in words. 
a. Offeree can also engage in CONDCUT which illustrates the acceptance of bilateral. Example: When an auctioneer raises his hand to accept the auctioner’s bid.