Contracts- Robert Denicola Fall Semester- 2012
I. Offer
A. Vests in the other party the power to accept
i. 2 requirements to be an offer: intent to be bound & sufficiently definite
ii. Objective standard
§ Would a reasonable person think it was an offer?
B. Intent to be bound
i. Have to intend to make a contract. No contract when…
§ Insufficiently serious- an obvious joke
§ Optimistic statements from Drs
§ Social statements among family members
ii. If you have to argue over whether it was an offer, then it probably wasn’t.
C. Definiteness
i. Relational contracts
§ People who deal w/ each other on a regular basis
ii. Power TO contract and power FROM contract
§ Easy enough so ppl can make contracts, but not so easy that everyone gets stuck in contracts
iii. Terms like good faith and reasonableness are deemed definite enough
D. Invitation to offer
i. Not an Offer!
ii. Approval by executive
§ When a seller gives the buyer a form, the sale being contingent on the approval of an executive, then this is an invitation to offer rather than an acceptance.
iii. Price quotations & Advertisements are usually not offers. They are invitations to offer
§ To be an offer, it has to be definite enough to constitute a bargain
ú i.e. stating quantity, price, etc..
ú stating limited quantity or first come first serve is enough to define quantity
· the idea is just to prevent the seller from unlimited liability
o lefkowitz: scarf case
§ Mason Jar case: stated “if accepted immediately” this made it more than a price quote and turned it into an offer
ú Implied that they were giving the other party the power to accept = offer
E. Details
i. Mirror image rule
ii. Gentleman’s agreements: they specifically state that it is not a legally enforceable contract
§ As long as that statement was seen and understood, then they cannot enforce it
iii. Usually an order to buy something is an offer, and the seller shipping it is the acceptance
II. Acceptance
A. Act of exercising the right conferred in him by the offeror, creating a contract.
i. Can be express or implied by actions
ii. Once accepted, they can no longer change the terms of the contract
§ Changing the terms = Counter offer rather than acceptance
B. Acceptance occurs when the offeree manifests it. Not when the offeror learns of it
i. Manifestation: must be a physical act toward making it binding. Mental acceptance does not count
ii. UNLESS the offeror states that the acceptance is not complete until the offeror knows about it
iii. Mailbox rule: binding when the offeree puts it in the mail
§ Only counts if this is a means of allowed acceptance by the offeror
§ Offeror can state that the acceptance is not good til they receive it. This is inforceable
§ If the acceptance (or rejection) is not received, the burden usually falls on the offeror. It should be their responsibility to contact the offeree for never hearing back from them.
§ Exception to the mail box rule: mailing a check & they never receive it. The other party is not considered pd when you mail it, they must also receive it.
ú RULES:
· Acceptance: once sent
· Revocation: upon receipt
· Rejection: upon receipt
o EXCEPTION: if you accept, you have to do so before you reject.
§ So if there is a rejection and acceptance in the mail at the same time and you sent the rejection 1st, the rejection is the one the counts. No acceptance.
§ If the letter gets lost, the mailbox rule still applies
ú Unless it is the fault of the sender, then you could argue that it shouldn’t apply
§ Email: counts when it gets to the inbox. Doesn’t matter if it is read yet.
ú §15
C. Unilateral Agreement
i. Express or implied acceptance
D. Bilateral Agreement Acceptance (promise for a promise)
i. You have to expressly or impliedly accept
§ Either state that you will do it, or start doing it.
§ Implied is sometimes difficult to tell: when did the performance b
te a contract
o If a seller doesn’t want to be bound to terms, then don’t start performance until the terms are decided upon
ú There is no intentional distinction in the UCC between different and additional (subsection 1 states diff &add, while subsection 2 only states add)
· Doesn’t really matter. They treat them the same.
iv. Confirmations: Just acknowledgement of the contract
§ If there are diff or add terms, it gets run through the UCC just like they would in an offer.
v. SOOO essentially 3ish different choices
§ Mirror image
§ Knockout rule
§ UCC
ú where diff and add are treated the same
§ Talk about treatment under all three on the exam
ú Northup
· There were different terms. The court could choose knockout (pick a default), mirror image (the offerors terms rule/last shot), or UCC (the are treated the same as additional terms)
· Trial chose knockout and app chose UCC
vi. Terms AFTER the deal is created
§ §2-207 used here as well
ú ProCD case. Terms were inside the box
· Keeping the goods was a form of acceptance
· Could argue that there was some type of agreement upon purchase
o But they know there are going to be more terms… so you are bound when you purchase the product and can get out only by returning the product if you don’t like what you see upon reading the terms.
ú Gateway case: 30 days to return or subject to the terms
· They would have expected the other party to be held to the agreement, so they are held as well.
ú No real acceptance upon purchase, the acceptance comes when they don’t return the product.
