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Contracts - Mutual Assent


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What is the tentative working guide for an offer?
A definite, conditional promise manifesting a present intent to enter into a binding, final agreement.
What are the issues around the finality of an offer?
- The words used in the offer
-- "quote" vs. "offer", words that are only invitations to an offer)

- The context of the proposal
-- Real property agreements have higher standards; agreements to agree no good)
-- Dealings with third party indicate that offer hasn't been made
-- Closeness of relationship between P and D
-- Proposals made in jest/anger/at social engagements

- The size of the class of offerees
-- Generally, advertisements to a large group of people are not an offer.
-- However, if ad is definite (first come, first served, quantity and time), then may still be offer.

- Contemplation of subsequent formalities
-- Generally, extended negotiations do not require formal paperwork
-- Except when explicitly called for by one party
What are considered material terms of an offer?
Material terms are: Quality, Quantity, Price, Terms of Payment, Terms of Delivery.
How does the UCC step in on various Definiteness issues?
Generally, UCC relaxes the definiteness standards (intention of the parties + method of determining the remedy is enough):
- Gap Fillers: Give default values if unsettled in the offer. Notably, Quality and Quantity are not covered.
- Quantity in reference to something else is okay (Output/Requirements Ks)
- Terms to be specified by one party are okay, as long as that party specifies terms that are commercially reasonable and in good faith.
How can indefiniteness in an offer be mitigated?
- Expert testimony
- Industry Norms
- Incorporation of terms by reference
- Employment contracts can often be terminated at will; no duration term is necessary.
How much time until an offer terminates?
-- Explicit duration, if given. Otherwise, "reasonable" depending on subject matter, rate of price fluctuation, etc.
-- Face-to-face offer usually terminates at end of conversation.
-- Extensions: depend only on offeror's subjective desire. Do not require that offeree knew.
What is the SoA on how the superveining death or mental incapacity of the offeror affects the validity of the offer?
Terminates the offer.
Majority: notice to offeree not required.
Minority: notice required.
How can an offeror revoke the offer?
Directly: Language interpreted loosly, in favor of offeror.

Indirectly: If offeree hears that the offer is no longer available, it is terminated. However, stricter standard:
- some communication of intent to revoke
- communication is a true one
- communication comes from a reasonable source
- tenor of the communication must destroy all reasonable expectation of performance
What are the offeree's methods of terminating the offer?
- Outright rejection
- Outright counter-proposal
- Qualified Acceptance

Remember, language is key. Language that inquires into the possibility of a change of terms does not count as a counter-proposal.
What limits might there be on the power to revoke an offer?
- Option Contracts supported by consideration
- Part Performance by the offeree
- Promissory Estoppel
- UCC 2-205: Offers by merchants are forced to remain open
How can an option contract be terminated?
higher standards than normal offer:
- Death of offeror/offeree
- express rejection by offeree
What is the tentative working guide for an acceptance?
An eligible offeree with knowledge of the offer and intent to accept gives the requested return, unconditionally.
What is an "Eligible Offeree"? What is an exception to the rule?
Generally, the offeree indicated by the offeror.

Option contracts are transferable, however.
What are the methods of termination of an offer?
- Supervening Death or Mental Incompetancy of the Offeror (SoA)
- Offeree's Supervening Death or Incompetency
- Lapse of Time
- Revocation by Offeror
- Termination by Offeree
- Supervening Illegality
Does the acceptance have to be at the forefront of the offeree's mind for the acceptance to be valid?
What are the rules for acceptance if the offeree is silent?
Generally, silence means no acceptance.

There are exceptions, however.
- If there was active solicitation and a substantial delay, the offer is considered accepted.
- Accepting goods, keeping them without saying anything, or exercising dominion over them in any way is an acceptance.
- UCC: Receiving goods for use is acceptance. Use includes holding for resale.
What are the requirements for the offeree "giving the requested return"?
What is the legal status of a given method of acceptance?
- Making a promise (bilateral K)
- Performing an act (unilateral K)

If, the method is:
- Required, then must use that method.
- Suggested, then this method is valid. Acceptance on dispatch
- Reasonable, then Majority say effective on dispatch. Minority say effective on receipt.
- Unreasonable, then effective on receipt.
What are the rules for determining whether the offeree must communicate the acceptance?
If expressly required by the offer, then that is honored.

If not expressly required:
- Bilateral Ks generally require communication of the acceptance. Specific language can negate this requirement.
- Unilateral Ks do not require communication if performance itself will notify the offeror in a reasonable period of time.
What are the rules for determining the method that the offeror must use to communicate the acceptance?
Common Law:
Required means only that method.
Suggested means that any reasonable method is okay.
Reasonableness means a mode of acceptance similar or faster than the mode of the offer.

UCC: relaxes this further. Even if mode was unreasonable, if the acceptance arrives in a reasonable amount of time, it's valid.
When is an acceptance or a rejection valid: on dispatch or receipt?
If the method was unreasonable, then valid on receipt.

If reasonable, then Mailbox Rule: Rejections are valid on receipt, Acceptances on dispatch. Exceptions to the Mailbox rule:
- Exlplicit language in the offer to the contrary.
- Improper dispatch (e.g. wrong address) means that acceptance is valid on receipt. Again, UCC allows it to be effective on dispatch if it arrives in the same amount of time.
- Legally overaking Acceptance (SoA)
- Physically overtaking Rejection (SoA))
What are the opinions on Legally Overtaking Acceptances?
- The acceptance is effective only on receipt. Thus, either party can walk.
- The K is voidable by the innocent party.
- The Mailbox Rule is applied mechanistically. Thus, the acceptance is effective, having been dispatched first. Exception only if innocent party has detrimentally changed position.
What are the opinions for a Physically Overtaking Rejection?
If offeror didn't detrimentally change position, then the Mailbox Rule is applied. Acceptance is binding.

If the offeror did detrimentally change position, then the K is voidable by the offeror.
What is the common law view on whether an acceptance is unconditional?
If it was conditional, what are the legal consequences?
An acceptance is conditional if there is a difference in terms that is:
- Express (not implied)
- Insisted upon (no precatory language)
- Material

Any difference meeting these criteria is a condition; substantive of procedural.

If it was conditional, it kills the original offer. It may in of itself consitutite a valid counteroffer (evaluate.)
What are the "last shot" and "escape hatch" problems?
These are are problems with the CL mirror-image analysis of offer acceptance. Often, there is a series of document exchanges with varying terms. The timing of performance can determine an unfair advantage to one party or another:

If there's a falling out before performance, the offeree can point to any small difference to invalidate the acceptance.

If there's a falling out after performance has commenced, the offeror gets all of the terms of his document incorporated.

The UCC addresses these issues (for goods only, of course)
Describe how UCC 2-207 works.
1) If there was a written response that has differing terms, it may still be an acceptance:
- any dickered terms must match
- it must not expressly require acceptance of the differing terms
If criteria are met, go to 2)
Failing this, go to 3)

2) For a layperson the new terms are not added to the contract.
For merchants, the new terms are added, unless:
- the original offer expressly forbids new terms
- the new terms materially alter the K
- notification of objection to the new terms is given in a timely manner

3) Even failing 1), a K is formed if the conduct of the parties recongnizes the K. In this case, the K is the terms upon which the two docs agree, plus gap-fillers for the rest.

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