Acceptance
Acceptance is **a manifestation of assent by the offeree communicated in such a way that shows he has accepted the terms of the offer and intends to be bound by it. **
Acceptance
Restatement (Second) of Contracts
Restatement (Second) of Contracts:
- “An ‘acceptance’ is the offeree’s manifestation of assent of the offer, made in a manner invited or required by the offer.”
- An acceptance must be made in response to an offer, NOT in response to something other than an offer such as a solicitation of offers.
Acceptance
Who can accept an offer?
- An offer may be accepted only by a person in whom the offeror intended to create a power of acceptance. (Restatement §§29, 54)
- An acceptance is usually **valid only if the offeree knows of the offer at the time of his alleged acceptance. **
- Restatement §23 “It is essential to a bargain that each party manifest assent with reference to the manifestation of the other.”
Acceptance is effective if it is:
Acceptance is effective if it is:
- Definite and Unequivocal
- The Mirror Image of the offer
- Counteroffers do not create a contract.
- Notice
What is appropriate form of acceptance?
Dictated by offer
Can be Promise OR Performance
When offer specifies conduct,
we can assume ________.
When offer specifies conduct, we can assume that performance is proper mode of acceptance
NOTE: Performance does not require notice
If contract does NOT indicate appropriate form of acceptance, ______________.
If contract does NOT indicate appropriate form of acceptance, the offer invites acceptance:
- in any manner and by any medium
- reasonable in the circumstances
NOTE: Promise requires notice of acceptance…must be communicated
ACCPETANCE
Promise v Performance
Promise REQUIRES notice of acceptance…must be communicated
**Performance DOES NOT **require notice
ACCPETANCE
Mirror Image Rule
Mirror-Image Rule: For acceptance to become effective, it must mirror the terms of the offer
- May not impose additional conditions or add limitations
- If it does, the new terms and conditions act as a counter offer (QUALIFIED ACCEPTANCE)
- However, an offeree may accept the offer and ask for additional terms and conditions independent of the acceptance, so long as they indicate that their acceptance is not conditioned on the additional terms (ABSOLUTE ACCEPTANCE)
ACCEPTANCE
When does acceptance become effective?
The offeror is the “master of his offer.”
- He may prescribe the method by which it may be accepted.
- If an offeror does not specify the mode of acceptance, the acceptance may be given “in any manner and by any medium reasonable in the circumstances.” Restatement 2d §30(2)
ACCEPTANCE
When acceptance becomes effective
Return Promise
- Acceptance is effective on dispatch (Mailbox Rule): as soon as it leaves the offeree’s possession
- An offeror’s revocation is effective upon receipt as opposed to the offeree’s dispatch.
- Once offer is accepted, offeror no longer has power to revoke
- Once acceptance is mailed (dispatched), offeree can’t take it back and offeror can’t terminate the offer
ACCEPTANCE
When acceptance becomes effective
Return Promise
Bilateral Contract:
Bilateral Contract:
- If the offer looks to be a bilateral contract, the acceptance will usually be in words.
- (i.e. looks to an acceptance that is by promise rather than performance)
- But the acceptance may also be in the form of actions, IF these fairly indicate to the offeror that the offeree intends to enter into the contract.
ACCEPTANCE
When acceptance becomes effective
Return Performance
Unilateral Contract (R2d §45)
Unilateral Contract (R2d §45):
- When an offer to a unilateral contract is made, it can be accepted only by full performance.
- BUT if the offeree begins to perform, most courts treat the offer as having become temporarily irrevocable.
- Where an offer looks to a unilateral contract, most courts now hold that the offeree must give reasonably prompt notice of his acceptance after he has done the requested act (unless the offeror promptly learns of the acceptance in some other way).
- If the offeree does not do this (and the offeror does not otherwise learn of the acceptance or indicate that notice is unnecessary), then the contract that was formed by the act is discharged. Rest. 2d §54(2)
ACCEPTANCE
When acceptance becomes effective
Return Performance:
General Rule &
the Exception
General Rule: When acceptance requires performance, no notification is necessary to make such acceptance effective (unless the offer requests notification)
Exception: If offeree knows or has reason to know that offeror will not be notified of the performance within a reasonable amount of time, notice is required unless:
- The offeree exercises reasonable diligence to notify the offeror of acceptance
- The offeror learns of the performance within a reasonable time
- The _offer indicates that notification is not required _
ACCEPTANCE
Return Performance
When accepting by performance, the acceptance is not effective until ____________.
Rule: When accepting by performance, the acceptance is not effective until the entire performance is complete
However, offeree is protected by RST§45
- Option Contract: Where acceptance is allowed by performance, an option contract is created when the offeree begins the invited performance.
- Contract becomes irrevocable as long as performance is completed in reasonable time under the circumstances
ACCEPTANCE: Return Performance
RST§45 Option Contract:
RST§45 Option Contract:
Where acceptance is allowed by performance, an option contract is created when the offeree begins the invited performance.
- Contract becomes irrevocable as long as performance is completed in reasonable time under the circumstances
ACCEPTANCE: Acceptance by Silence
Common Law v Modern Law
- Common Law: The common law rule is expressed by the phrase “he who is silent does not give his consent.”
- Silence is not an appropriate form of acceptance b/c gives no notice of acceptance (either by performance or communication)
- Modern view: Modern courts, and the Second Restatement, try to correct injustices by recognizing silence as a mode of acceptance in several scenarios.
- These scenarios in which the parties do not expressly exchange an offer and acceptance, but in which they indicate by their silence (or non-verbal conduct) their understanding that a contract has been formed, are sometimes said to give rise to an implied in fact contract.
ACCEPTANCE: Acceptance by Silence
Reason to understand silence is consent
R2d §69(1)(b)
Where the offeror has given the offeree reason to understand that silence will constitute acceptance, the silence or inaction of the offeree will operate as an acceptance if she subjectively intends to be bound. Restatement 2d §69(1)(b)
EX:
- Prior dealings suggest silence is appropriate form of acceptance
- When you act like its yours, its yours
ACCEPTANCE: Acceptance by Silence
Acceptance of Services
R2d §69(1)(a
Taking benefit of offered services with reasonable opportunity to reject them and failing to do so
An offeree who silently receives the benefit of services (not goods) will be held to have accepted the contract for them if she
- had reasonable opportunity to reject them AND
- knew or should have known that the provider of the services expected to be compensated for them.
Restatement 2d §69(1)(a)
ACCEPTANCE: Acceptance by Silence
Prior conduct making acceptance by silence reasonable:
R2d §69(1)(c).
- Even if the offeror has not indicated to the offeree that silence will constitute acceptance, the prior course of dealing of the parties may make it reasonable that the offeree’s silence be construed as consent.
- This will be the case when the prior dealings make it “reasonable that the offeree should notify the offeror if he does not intend to accept.”
Restatement 2d §69(1)(c).
ACCEPTANCE: Acceptance by Silence
Acceptance by dominion:
R2d §69(2)
When the offeree receives goods,
- he may be held to have accepted a contract for the goods even though he does not intend to do so.
- He may make such an unintentional acceptance by exercising “dominion” over the goods in a way inconsistent with the offeror’s ownership of the goods.
Restatement 2d §69(2)
Inconsistency: when offeree’s actions are inconsistent with the ownership rights of the offeror
When you act like its yours, its yours
When analyzing acceptance, make sure the manner of acceptance ____________.
When analyzing acceptance, make sure the manner of acceptance:
- was one that the offer allowed OR
- that was reasonable if the offer didn’t say what manner what acceptable.
If a seller promises to ship something, would that be considered acceptance?
Under the UCC, the Seller can usually accept either by shipping OR promising to ship.
EX: If a reward is offered for the return of something, and you return it without knowing of the reward, have you still fulfilled the contract?
No. An offeree must know about the offer in order to accept it. If you return the item without knowing the owner of the item has offered a reward, there no enforceable contract.
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Definitions26
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Last day Review1
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Uniform Commercial Code - Straight Code Verbiage15
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Cases10
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Restatement (Second) of Contracts24
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General Principles40
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General Damages for Breach of Contract→ Expectancy Measure17
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UCC Damages § 2 applicable in contract for sale of goods1
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General Damages for Breach of Contract→ Reliance Measure4
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General Damages for Breach of Contract→ Restitution Measure13
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Equitable Remedies: Specific Performance9
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Contract Formation14
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Offer28
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Acceptance28
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E-Commerce and Mutual Assent3
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DISCERNING THE AGREEMENT Ambiguous or Vague Terms4
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DISCERNING THE AGREEMENT Filling in Gaps in the Terms OR Missing Terms11
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DISCERNING THE AGREEMENT: Identifying the Terms of the Agreement5
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Formation/Interpretation under the UCC14
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Parol Evidence Rule9
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Statute of Frauds9
