Offer
What creates the power of acceptance
Offer
What rule states that acceptance requires agreement on every term proposed in the offer?
Mirror Image Rule
A homeowner invited a contractor to bid on a home repair project. After reviewing the project, the contractor told the homeowner that he would call the homeowner later that day with a price quote. That afternoon, the homeowner received a message from the contractor stating that the contractor would do the work for $1,000 and that he could start the work on Monday. The homeowner, believing that $1,000 was too much for the project, called the contractor back and stated that he was not interested in the contractor’s services. The following day, the homeowner had a change of heart and called the contractor again. The homeowner left a message stating that he would be willing to pay the contractor $800 to complete the work. On Monday, the contractor began work on the project. After completing the work, the contractor sent the homeowner a bill for $1,000.
What is the legal status of the contract between the homeowner and the contractor?
There is a valid contract for $800.
There is a valid contract for $800 between the homeowner and the contractor. The contractor’s original offer to do the work for $1,000 was terminated by the homeowner’s rejection of the offer. When the homeowner called back the next day, he made a new offer to pay the contractor $800 for the work. The contractor accepted this new offer by beginning performance, and the homeowner’s obligation to pay arose when the contractor completed the performance
What is Mutal Assent?
objective meeting of the minds between the offeree and the offeror
What restatement defines offer?
Rest. 2d Contracts 24 – Offer
a.Offer is a manifestation of willingness to enter into a bargain, inviting assent
b.Offer is a direct complete proposal that a contract be entered into, providing for an exchange of defined performances
The power of acceptance exists in the offeree until ...
revocation
Rejection
counter offer
lapse of time
Tweeedle Dee enters into a contract with Mad Hatter Catering to purchase some pies for a party he is throwing. The contract specifies that Mad Hatter will provide 10 "moon pies" for the occasion. Prior to the contract, Tweedle Dee was at a friend's house and was served an unusual pie made out of chocolate and blue cheese and the friend told him that it was a mood pie - this is what Twwedle Dee meant to be ordering. Unbeknownst to Tweedle Dee, the pie the Mad Hatter called "moon pie" is made of blackberries and oranges. The night of the party the Mad Hatter delivers his version of "mood pies." Tweedle Dee is stunned when he sees the fruity concoction and refuses to accept them.
Assume Mad Hatter had no reason to know that Tweedle Dee thought moon pies were made another way and Tweedle Dee had no reason to know that Mad Hatter made them a different way. What is the result?
There is no contract, so Tweedle Dee can refuse to accept the pies.
when the parties to a contract have a misunderstanding about a material term in the contract, and neither party knows or has reason to know of the misunderstanding there is no meeting of the minds and therefore no contract
what are the five characteristics of a contracts
what is Agreement, A common understanding (there must be communication), At least two parties, An exchange – acts to be done in the future, and Must be enforceable
an offer made by offeree relating to the same matter as the original offer, and proposing a substituted bargain
Rest. 2d Contracts 39
what is Counter-offer
Rest. 2d Contracts 35
An offer gives the offeree power to complete the manifestation of mutual assent by acceptance of the offer
what is Offeree’s Power of Acceptance
what is the difference between UCC and CL
UCC is the sale of goods, a good is a movable tangible object at time of contract formation and sale of good is passing of title from seller to buyer
CL is the catch-all body of law that governs anything UCC does not
Describe what a unilateral contract is.
a contract in which only one party promises to do something and the other party is free to act or not act as they wish
Why are ads not typically considered offers?
They do not contain sufficient words of commitment to sell.
An advertisement is generally not an offer unless the language makes an express promise to adhere to specific terms. In particular, mere puffery (i.e., describing a product or service in flattering language meant to attract potential buyers) is not an offer. Courts have typically construed advertisements as either invitations to negotiate or solicitations of offers, rather than as offers. Restatement (Second) of Contracts § 26 cmt. B
Explain the Mailbox Rule under R 63 and R 40
Under the mailbox rule, an acceptance by mail is effective upon proper dispatch (typically, once it is properly addressed, postage paid, and placed with the postal service)
a.Offer is accepted as soon as the acceptance is deposited in the mailbox
b. The offeror cannot revoke the offer once the acceptance is in the mailbox
c. Must be reasonable – giving it to a mail clerk is not yet “in the mail”; not having correct postage is not “in the mail”
d. R 63: Offeror can stipulate how to accept – thus, acceptance may not be allowed through the mail. Unless offer says otherwise, acceptance takes effect when it leaves the offeree, whether or not it reaches the offeror
e. If Sent (1) acceptance, then (2) rejection/counter offer
1.Acceptance arrives first, acceptance governs
2.Rejection arrives first, then the acceptance STILL generally governs
i.Before rejection was received, acceptance was sent, and thus it began to operate
ii.Exception: where the offeror relies on the rejection by doing a deal with someone else, then the rejection governs (R § 63 illus. 7)
f. If Sent (1) rejection/counter offer, then (2) acceptance
i. R § 40 – whatever arrives first governs
a.When a rejection/counter offer is sent before an acceptance, whatever arrives first wins
2.Acceptance arrives first, acceptance governs
3.Rejection arrives first, rejection governs
i.When the acceptance arrives second, the law treats it as an offer or a counter offer, and the original offeror may accept it
Rejection or counter-offer by mail/telegram does not terminate power of acceptance until it reaches the offeror. Acceptance after sending rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer.
A farmer sought to have a fence repaired. The farmer sent emails to several contractors explaining the job to be done and asking whether they would be willing to do the job for $2,500. One contractor who received the email came to the farm and repaired the fence while the farmer was away.
Is there a valid contract between the farmer and the contractor?
No, because there was never an offer for the contractor to accept.
In order to form a valid contract, there must be an offer and acceptance. An offer is defined as a manifestation of willingness to enter into a bargain that justifies another person in understanding that assent to that bargain is invited. Restatement (Second) of Contracts § 24 (1981). An offer is valid when it contains reasonably certain terms that offer to exchange something of value. Preliminary negotiations are not considered offers. Examples of preliminary negotiations include invitations to bid, price quotations, and proposals
what are the three elements of contracts
what is Offer, Acceptance and Consideration
A contract generally forms if one party makes an offer, and another party accepts the offer by manifesting assent to the offer's terms (creating mutual assent), provided that there is adequate consideration.
what type of classic contract is being described?
what is bilateral contract
A party may indicate a desire to enter into a contract through some kind of invitation to negotiate, e.g., an invitation to bid, a negotiation of terms, a price quotation, or a proposal of terms. Generally, these communications are not considered binding offers, because there is as yet no manifestation of the offeror's willingness to conclude a final bargain. [See Restatement (Second) of Contracts § 26, with comments.]
What is Preliminary Negotiations
A manifestation of willingness to enter a bargain is not an offer if the other party knows the first party does not intend assent to conclude the bargain
1. Generally, advertisements are not intended to be offers
2. A quote invites an offer based on a price given by the bidder
3. Words like “make me an offer” generally invite offers/bids
Define Acceptance
is the offeree's manifestation of assent to the terms of the offer, made in a manner invited or required by the offer
Paris grants Micheal an option to buy Blackacre for $1000 at any time during the next month. Micheal pays $10 for this option. Is there a valid contract? if so what type of contract would this construe?
Yes, the option contract constitutes not only an offer of sale but also a contract binding Paris to keep the offer open for 30 days.