BLAW 2301 Lecture Notes - Lecture 12: Shrink Wrap, Fax, Posting Rule
26 Jun 2018
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CH 12 OFFERS AND ACCEPTANCE
Making offers:
Parties can form a contract only if
–Understood each other and
–Intended to reach an agreement
–One side must make an offer and the other must make an acceptance
•Courts make objective assessments when evaluating offers and acceptances.
Ex: It will look at the handshake objectively, deciding how a reasonable person would
interpret her words and conduct.
Offer:
Offer: An act or statement that proposes definite terms and permits the other party to create a
contract by accepting those terms.
Two questions determine whether a statement is an offer
1) Do the offeror’s words and actions indicate an intention to make a bargain?
2) Are the terms of the offer reasonably definite? (The terms of the offer must be definite)
–Cases: Toyota vs toy-yoda, terms not definite enough for it to be an enforceable
contract.
Ex: Ex: Zachary says to Sharon, “Come work in my English language center as a teacher. I’ll
pay you $800 per week for a 35-hour week, for six months starting Monday.” If Sharon accepts,
the parties have a contract that either one can enforce.
•Offeror: The person who makes the offer (zac)
•Offeree: The person to whom an offer is made (Sharon)
What isn’t an offer:
Invitation to bargain is not an offer. Price quote itself is not an offer. But when u
negotiate tht quote then it becomes an offer.
1)Invitations to Bargain: Not an offer
Ex: “There is no way I could sell the condo for less than $150,000.” merely an invitation
to negotiate. not promising to sell the condo for $150,000 or for any amount.
2)Price Quotes: Generally not an offer
Ex: leviton vs litton. Leviton claimed that under the contract it had no liability. But the
court held that the price letter was not an offer. It was a request to receive an offer.
Thus the contract ultimately formed did not include Leviton’s liability exclusion. Litton
won over $4 million.
3)Letters of Intent: May sometimes be treated as contract
Letters of intent: "negotiating in good faith" ex: Amazon buys whole foods. They merely
state what the parties are considering, not what they have actually agreed to. But note
that is possible for a letter of intent to bind the parties if its language indicates that the
parties intended to be bound.
find more resources at oneclass.com
find more resources at oneclass.com
4)Advertisement
consumer makes the offer, whether by mail or by arriving at a merchant’s store ready to
buy. The seller is free to reject the offer.
There are consumer protection statutes, which outlaws false advertising.
Ex: For example, an automobile dealer who advertises a remarkably low price but then has only
one automobile at that price. ad was published in bad faith, to trick consumers into coming to
the dealership.
5) Auctions
The bids are the offers
If and when the hammer falls, the auctioneer has accepted the offer
With reserve – Item for sale has a minimum price
Without reserve – No minimum sales price, auctioneer must sell the merchandise to the
highest bidder.
The UCC and Open Terms
If a contract for sale of goods has indefiniteness can still use under the UCC as long as both
parties intended for a contract and there is a certain basis for giving an appropriate remedy.
Ex: yuma and central pipeline. Each party INTENDED a binding agreement without a
definitive price. But because this was a sale of goods, it was governed by the UCC.
Gap filler provisions: (if intended to make sale of goods contract, but forgot some definite
terms n there is a possible remedy to fix it- then use gap filler provisions under UCC)
UCC rules for supplying missing terms
1)Open Price
UCC establishes a reasonable price
2)Output and Requirements Provisions
Output Contract: Obligates the seller to sell all of his output to the buyer, who agrees to
accept it
Requirements Contract: Obligates a buyer to obtain all of his needed goods from the
seller Code requires both parties to act in good faith. Neither party may
suddenly demand a quantity of goods (or offer a quantity of goods) that is
disproportionate to their past dealings or their reasonable estimates.
When dealing with goods. Always have to have QUANTITY. If its not definite quantity can use
output and requirement provisions.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
One side must make an offer and the other must make an acceptance: courts make objective assessments when evaluating offers and acceptances. Ex: it will look at the handshake objectively, deciding how a reasonable person would interpret her words and conduct. Offer: an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms. Two questions determine whether a statement is an offer: do the offeror"s words and actions indicate an intention to make a bargain, are the terms of the offer reasonably definite? (the terms of the offer must be definite) Cases: toyota vs toy-yoda, terms not definite enough for it to be an enforceable contract. Ex: ex: zachary says to sharon, come work in my english language center as a teacher. But when u negotiate tht quote then it becomes an offer.
