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Mann_Essentials13e_PPT_Ch10.pptxChapter 10
Mutual Assent
Chapter 10 Title Slide
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Topics Covered in Chapter 10: Mutual Assent
I. Offer
A. Essentials of an Offer
B. Duration of Offers
II. Acceptance of Offer
A. Communication of Acceptance
B. Variant Acceptances
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Essentials of an Offer
Communication – offeree must have knowledge of the offer and the offer must be made by the offeror to the offeree.
Intent – is determined by an objective standard of what a reasonable offeree would have believed.
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Essentials of an Offer
Intent – important to distinguish an offer from proposals that ‘invite’ an offer.
Preliminary Negotiations
Advertisements
Auction Sales
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Essentials of an Offer
Definiteness – the offer's terms must be clear enough to provide a court with a basis for giving an appropriate remedy.
Open Terms (UCC)
Good Faith and Commercial Reasonableness
Output and Requirement Contracts
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Duration of Offers
Lapse of Time – offer remains open for the time period specified or, if no time is stated, for a reasonable period of time.
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Duration of Offers
Revocation – generally, an offer may be terminated at any time before it is accepted, subject to the following exceptions.
Option Contract – contract that binds offeror to keep an offer open for a specified time.
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Duration of Offers
Revocation
Firm Offer – a merchant's irrevocable offer to sell or buy goods in a signed writing ensures that the offer will not be terminated for up to three months.
Statutory Irrevocability – offer made irrevocable by statute.
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Duration of Offers
Revocation
Irrevocable Offer of Unilateral Contract – may not be revoked for a reasonable time after performance is begun.
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Duration of Offers
Revocation
Promissory Estoppel – noncontractual promise that binds the promisor because she should reasonably expect that the promise will induce the promisee (offeree) to take action in reliance on it.
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Duration of Offers
Rejection – refusal to accept an offer terminates the power of acceptance.
Counteroffer – counter-proposal from the offeree to the offeror that indicates a willingness to contract, but on different terms from the original offer.
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Duration of Offers
Counteroffer
Conditional acceptance is a type of counteroffer which purports to accept the offer, but with additional or different terms.
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Duration of Offers
Death or Incompetency – either offeror or offeree usually terminates the offer; exception is offer contained in an option.
Destruction of Subject Matter – terminates the offer.
Subsequent Illegality – terminates the offer.
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Duration of Revocable Offers
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Communication of Acceptance
Definition – positive and unequivocal expression of a willingness to enter into a contract on the terms of the offer.
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Communication of Acceptance
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Communication of Acceptance
Communication of Offer
General Rule – acceptance effective upon dispatch unless the offer specifically provides otherwise or the offeree uses an unauthorized means of communication.
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Communication of Acceptance
Communication of Offer
Silence as Acceptance – usually inaction does not indicate acceptance, unless in usual customs or previous dealings, offers have been accepted by silence; example: members of mail order clubs indicate acceptance by NOT returning a mailed notice of shipment.
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Communication of Acceptance
Communication of Offer
Effective Moment
Stipulated Provisions in the Offer – the communication of acceptance must conform to the specification in the offer.
Authorized Means – unless the offer provides otherwise, acceptance can be formed in any reasonable manner.
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Communication of Acceptance
Communication of Offer
Effective Moment
Unauthorized Means – acceptance effective when received, provided that it is received within the time within which the authorized means would have arrived.
Acceptance Following a Prior Rejection – first communication received by the offeror is effective.
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Communication of Acceptance
Communication of Offer
Effective Moment
Defective Acceptance – late or defective acceptance does not create a contract but serves as a new offer. To create a contract, the original offeror must accept the new offer.
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Offer and Acceptance
Offer and Acceptance
Time Effective Effect
___________________________________________________________________________________________Communications by Offeror
Offer Received by offeree Creates power to form a contract
Revocation Received by offeree Terminates power
____________________________________________________________________________________________________________________Communications by Offeree
Rejection Received by offeror Terminates offer
Counteroffer Received by offeror Terminates offer
Acceptance Sent by offeror If received before rejection forms a contract
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Variant Acceptances
Common Law – under the common law, an acceptance must be positive, unequivocal and must not change the provisions of the offer.
Mirror Image Rule – except as modified by the Code, an acceptance cannot deviate from the terms of the offer.
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Variant Acceptances
Code – under the Code, an attempt is made to examine the intent of the parties, regardless of the terms, especially in written contracts between merchants using standard sales forms.
Battle of the Forms
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