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What do you look for in the contract Agreement Process?

look for (i) initial communication (offer) and (ii) what happens after the initial communication (termination of the offer) and (iii) who responds and how she responds (acceptance)


Define an offer

An offer is a manifestation of an intention of one person to contract--words or conduct showing commitment by one person.


what is the basic test for an offer?

Would a reasonable person in the position of the offeree believe that his assent would create a contract


What law applies to a Sale of Real Estate Contract? What is required in a Sale of Real Estate Contract?

Common Law applies. Price and description required.


What law applies to a Sale of Goods Contract? What is not required?

Article 2 applies. No pricing requirement


Can Vague or Ambiguous Material Terms be considered an offer?

Not an offer under common law or UCC [words like Appropriate, fair, reasonable]


What is a Requirements Contract?

A contract for the sale of goods can state the quantity of goods to be delivered under the contract in terms of the buyer's requirements or seller's output [All, only, exclusively, solely]

Requirements or output contracts are not vague or ambiguous and are valid


when is it permissible for you to ask for an Increase in requirements for output/requirements contract? Under what circumstance is it impermissible?

Permissible so long as the increase is in line with the prior demands. NO UNREASONABLY DISPROPORTIONATE LIMITATION ON INCREASES.


Context: Is an advertisement or price quotation an offer? What are the exceptions?

Generally no, exceptions:
(i) an advertisement can be a unilateral offer if it is the nature of a reward
(ii) an advertisement can be an offer if it specifies quantity and expressly indicates who can accept (1 fur coat, $10 first come first served)
(iii) price quotation can be an offer if sent in response to an inquiry.


What are the four Methods for of Termination of an Offer?

1) Lapse of time-time stated or reasonable time
2) Death of a party prior to acceptance, exception: irrevocable offer
3) Words or conduct of offeror, i.e. revocation of an offer
4) Words or conduct of the offeree i.e. rejection


What two ways can the offeror revoke an offer?

Later unambiguous statement by offeror to offeree of unwillingness or inability to contract, or later unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is AWARE OF

Recall: multiple offers are not revocation


Which four offers are irrevocable?

1. Options,
2. UCC Firm Offer Rule,
3. Reliance,
4. Unilateral Contract (if they have begun performance)


What is an option? Can it be revoked?

An option is a (i) promise to not revoke the offer (or promised to keep it open) AND (ii) this promise is supported by payment or other consideration (option)

It cannot be revoked.


What three elements must be satisfied for the Firm Offer Rule?
How long can the offer be open?

An offer cannot be revoked for up to three months if it is
(i) offer to buy or sell goods, (ii) signed written promise to keep the offer open, and (iii) party is a merchant (merchant is generally a person in business)


What are the three elements of reliance that make an offer irrevocable?

An offer cannot be revoked if there has been (i) reliance that is (ii) reasonably foreseeable and (iii) detrimental


What makes a unilateral contract irrevocable?

What is not enough to make unilateral contract irrevocable?

The start of performance pursuant to an offer to enter into a unilateral contract makes that offer irrevocable for a reasonable time to complete the performance. Mere preparation will not suffice.


What is the effect of a Counteroffer? Do counteroffers terminate options?

Generally terminates the offer and creates a new offer. Thus generally, where a counter offer has been made there is no express contract unless that counteroffer has itself been accepted. Counteroffers need to be distinguished from bargaining. Bargaining does not terminate the offer.

Counteroffers do not terminate options.


Does Conditional acceptance terminate an offer? What phrases should you look for?

What is the effect of a conditional acceptance under common law?

Under UCC?

A conditional acceptance terminates the offer. Look for a response to an offer with the word "accept if, only if, provided, so long as, but, etc."

CL: Rejects and becomes a counteroffer than can be accepted by conduct
UCC: Rejection


What is the Mirror Image Rule? Under what applicable law does it fall?

Common law: a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance


Are Additional or different terms, a rejection under the UCC? What is it known as?

Not a rejection. Seasonable expression of acceptance. Look for fact pattern in which there is an offer to buy or sell goods and a response with additional or different terms.


What 2 questions should you ask when there are Additional or different terms in a sale of goods contract?

1. Is there a response to an offer that adds additional terms but does not make them a condition of acceptance?
2. Are the additional term part of the K?


In a sale of goods contract, if there a response to an offer that adds additional terms but does not make them a condition of acceptance, what is it treated as? What is it known as?

it generally treated as acceptance (a seasonable expression of acceptance)


In a sale of goods contract, when there is a response to an offer that adds additional terms but does not make them a condition of acceptance, under what conditions are the additional terms parts of the contract?

It is only if (i) both parties are merchants AND (ii) the additional term is not material AND (iii) the additional term is not objected to by original offeror


Who controls the Method of Acceptance?

Offeror can control method of acceptance, the time that a distance acceptance is effective, or whether the offerree must give notice that is has accepted by performance.


Acceptance: Distance and Delay in Communications

Communications other than acceptance are effective when received.
Acceptance is effective when MAILED (Mailbox Rule).
Rejection mailed before acceptance mailed, neither is effective until received. Cannot use mailbox rule to meet option deadline. For mailbox rule look at when out of control of responder.


What happens if the Seller of goods sends the wrong goods and the recipient accepts?
What is the accommodation exception?

General rule: acceptance and breach
Accommodation exception: counteroffer and no breach


Who can accept an offer? Can offers be assigned?
Can Options be assigned?

Generally, only by the (i) person who knows about the offer at the time she accepts, (ii) who is the person to whom it was made. Offers cannot be assigned; options can be assigned unless the option provides otherwise.


What is the general rule for acceptance in a bilateral contract when the offeree starts performance?

General Rule: start of performance is acceptance. Starting to perform is treated as implied promise to perform so there is a bilateral contract.


Is start of performance an acceptance in a unilateral contract?

No. The start of performance is not acceptance of unilateral contracts, as can only be accepted through completion. (this can make the offer irrevocable)