I. OFFER – Legal Requirements:
1. Serious Intention to be Bound
a. Objective Standard – a party’s mental assent is not necessary to make out a K. It is enough that one party has a reason to believe that the first party had intention to enter a K.
b. Agreements made in jest, as a joke, are unenforceable, unless the other party has reason to believe otherwise.
c. Advertisements aren’t offers but mere invitation to make an offer.
1. Exception: when ad is clear, definite and explicit; leaves nothing open for negotiation; has words of limitation.
2. Ads offering rewards are offers.
2. Definiteness – Reasonably definite terms
a. UCC has relaxed this, but only for Sale of Goods – UCC plugs in almost all terms when missing
3. Communication
a. Offer is not effective until it reaches offeree. Until then, offeror can withdraw offer.
b. Termination of an Offer
1. Revocation – effective only upon receipt.
a. Offer freely revocable by offeror at any time before acceptance
b. Offeror need not to say ‘revoke’ to revoke. It is enough that the offeror indicates intention not to make proposed K. A subsequent offer, inconsistent with original offer, may suffice to revoke original offer. Action w/o words may suffice if action is inconsistent w/ intention to K.
c. Revocation need not be communicated directly to offeree. It is enough that offeree received info that offeror took actions inconsistent w/intent to make K.
d. Unless the offer is an option or a firm offer under 2-205, promise to keep it open is not binding on offeror.
2. Rejection or Counter Offer – effective only when received.
a. Rejection terminates power of acceptance. Offeree cannot later accept. If he tries to, the purported acceptance might be an offer.
b. Problem – whether the purported acceptance that varies in terms is a counteroffer or acceptance.
3. Party’s Death or Incapacity. – notice not required.
a. Applies only when death occurs before acceptance. Once K is formed, death of a party does not terminate it, unless the K, by its terms, provides for termination UC.
b. The other party need not to have notice of death/incapacity, the offer will still be terminated.
4. Lapse of Offer
a. Offeror may limit the period during which the offer is effective
b. If fails to specify – offer lapses within a reasonable time UC.
c. ACCEPTANCE – offeree’s manifestation of asse
fer is irrevocable.
4. Notice of acceptance
a. R2K 54:
1. (1) If an offer invites acceptance by performance, no notification is necessary unless the offer request notification.
2. (2) if offeree accepts by performance, and has reason to believe that offeror will not learn of acceptance w/o notice, the contractual duty of offeror is discharged unless:
i. Offeree exercises reasonable diligence to notify of acceptance,
ii. Offeror learns of acceptance within a reasonable time, or
iii. Offer indicates that no notification of acceptance is required.
b. If offer requires acceptance by promise, offeree must take steps to let offeror know of acceptance
c. If notice is required, it is enough that offeree exercises reasonable care to let offeror know of acceptance, even if offeror never actually knows of it.
If offeree fails to give notice, offeror need not show that failure caused any loss. Regardless of the loss, the offeror is not bound.
