Contract Formation - Offer & Acceptance Flashcards Preview

CPA - Regulation: Ethics & BLAW - Contracts > Contract Formation - Offer & Acceptance > Flashcards

Flashcards in Contract Formation - Offer & Acceptance Deck (23):

When is an acceptance of an offer effective?

If sent by authorized medium, effective when delivered to the medium;

If sent by unauthorized medium, effective when received by offeror, provided that the offer is still open.


When is a revocation by the offeror effective?

When offeree knows of or receives revocation.


What conditions must exist for the acceptance of a bilateral offer to take place?

Acceptance must be unequivocal and communicated to the offeror.


What happens under UCC if there are additional terms in acceptance and the parties are nonmerchants?

There is a contract, but without the additional terms.


What happens under UCC law if there are additional terms in acceptance and the parties are merchants?

There is a contract with the additional terms unless those terms are material, are objected to, or if the offer was specifically limited to its terms.


Can silence be considered a form of acceptance to an offer?

Generally not acceptance unless the offeree's actions indicate an attempt to accept or the offeree has the duty to reject.


Describe an expressly authorized or stipulated means of communication.

A means of communicating acceptance that is expressly stipulated in the offer.


List the requirements of a firm offer for the sales of goods.

1.Offeror is a merchant;
2.Offeror using a signed writing;
3.Assures offer will remain open for a stated period of time (without consideration not to exceed three months, regardless).


Describe the requirements of an offer.

Objective intent to contract;

Common law: subject matter, price, payment terms, time for performance, etc.;

Uniform Commercial Code (UCC): subject matter and quantity if more than one;

UCC will supply the remaining terms if not in the offer.


When is the revocation of a public offer effective?

Effective if made in the same medium as the offer.


What happens under Common Law if there are additional terms in an acceptance?

The acceptance is a counteroffer and a rejection.


List the requirements of an offer.

1.Serious intent;
2.Definite Terms;
3.Communication of Offer.


When are advertisements considered offers?

Advertisements are generally not offers unless they only invite acceptance.


When does the acceptance of an unilateral offer occur?

Takes place upon completion of the act required by the offeror.


When are preliminary negotiations considered offers?

Preliminary negotiations are generally not offers unless such negotiations includes price lists, solicitation of bids, and auctions with reserve.


How is serious intent (objective intent) measured?

Measured by a reasonable person's interpretation of the circumstances.


List the elements of a contract.

Offer, Acceptance, Consideration, Capacity of the parties, Legality, Writing (when required).


Define "option contract".

An option contract is a distinct contract in which the offeree gives consideration to keep the offer open.


Describe the general rule of revocation.

An offer can be revoked at any time before acceptance unless offer is irrevocable.


List the ways in which an offer can be terminated by operation of law.

1.Lapse of time;
2.Death or insanity of either party (unless offer is irrevocable);
3.Destruction of the specific subject matter of the contract;
4.Intervening illegality.


Describe the mirror-image rule regarding acceptance of an offer.

Acceptance must be absolute, unequivocal, and unconditional. In common law, if the acceptance is not a mirror image of the offer's terms, it is a rejection and counter offer.


List the ways an offer can be terminated by the act of the parties to the offer.



List the three types of irrevocable offers.

2.Sales of goods firm offers;
3.Offers irrevocable by estoppel.