Mutual Assent - Acceptance Flashcards
(6 cards)
Acceptance of Offer for Bilateral Contract
Recall that unless an offer specifically provides that it may be accepted only through performance, it will be construed as an offer to enter into a bilateral contract and may be accepted either by a promise to perform or by the beginning of performance.
a. Acceptance Must Be Communicated
* Unless the offer provides otherwise, acceptance of an offer to enter into a bilateral contract must be communicated to the offeror. Generally, silence can’t be treated as an acceptance (see below).
b. Method of Acceptance: Unless otherwise provided, an offer is construed as inviting acceptance in any reasonable manner and by any medium reasonable under the circumstances. Any objective manifestation of the offeree’s counterpromise is usually sufficient.
* Offers to Buy Goods for Current or Prompt Shipment: Under Article 2, an offer to buy goods for current or prompt shipment is construed as inviting acceptance either by a promise to ship or by current or prompt shipment of conforming or nonconforming goods.
* Acceptance by Unauthorized Means: An acceptance transmitted by unauthorized means or improperly transmitted by authorized means may still be effective if it is actually received by the offeror while the offer is still in existence.
c. Acceptance Must Be Unequivocal
Traditional contract law insists on an absolute and unequivocal acceptance of each and every term of the offer (the “mirror image rule”). At common law, any different or additional terms in the acceptance make the response a rejection and counteroffer.
Acceptance of Offer for Unilateral Contract
a. Completion of Performance
* A unilateral contract is not accepted until performance is completed. Recall that the beginning of performance may create an option so that the offer is irrevocable.
* However, the offeree is not obligated to complete performance merely because they have begun performance, as only complete performance constitutes an acceptance of the offer.
b. Notice
* Generally, the offeree is not required to give the offeror notice that he has begun the requested performance but is required to notify the offeror within a reasonable time after performance has been completed.
* However, no notice is required if: (1) the offeror waived notice; or (2) the offeree’s performance would normally come to the offeror’s attention within a reasonable time.
Acceptance under Article 2
an offer to buy goods for current or prompt shipment may be accepted by either a promise to ship or by a shipment of conforming or nonconforming goods.
* Improper Shipment = Acceptance & Breach
* The shipment of nonconforming goods is an acceptance creating a bilateral contract as well as a breach of the contract unless the seller seasonably notifies the buyer that a shipment of nonconforming goods is offered only as an accommodation. The buyer is not required to accept accommodation goods and may reject them. If the buyer rejects, the shipper isn’t in breach and may reclaim the accommodation goods, because the tender does not constitute an acceptance of the buyer’s original offer.
* Accommodation = Counter-Offer
Silence as Acceptance
Generally, Silence does not = Acceptance
* However, a court may find silence works as an acceptance if, because of prior dealings or trade practices, it would be commercially reasonable for the offeror to consider silence an acceptance.
* Also, if the recipient of services knows or should have known that the services were being rendered with the expectation of compensation and, by a word, could have prevented the mistake, the recipient may be held to have accepted the offer if they fail to speak.
Mirror Image Rule (Common Law)
Acceptance must mirror offer terms at common law
* Any different or additional terms in the acceptance make the response a rejection and counteroffer.
Battle of the Forms Provison (Mirror Image Not Required): Offeree’s additional term not part of contract unless:
* Both are Merchants;
* It’s Not Material; and
* Offeror Doesn’t Reject
* A material change causes hardship or surprise (ex: disclaimers)
* Industry Custom = Not Material Change
When Acceptance is Effective - Mailbox Rule*
Acceptance effective when sent
* Doesn’t apply to rejections & revocations
Exceptions:
* The offer stipulates that acceptance is not effective until received.
* An option contract (irrevocable offer)1 is involved (an acceptance under an option contract is effective only upon receipt).
* The offeree sends a rejection and then sends an acceptance, in which case whichever arrives first is effective.
* The** offeree sends an acceptance and then a rejection, in which case the acceptance is effective (that is, the mailbox rule applies) *unless the rejection arrives first and the offeror *detrimentally relies on it.
