Assent Mutual - 3
Acceptance Overview
Valid acceptance creates contract Late or defective acceptance does not create contract Once offer has been validly accepted, offeror can no longer revoke
WHEN IS ACCEPTANCE EFFECTIVE?
I.e., when is the contract formed Choices - when sent or when received
WHEN IS ACCEPTANCE EFFECTIVE? (cont.) 1. General rule Effective when sent if sent by authorized means
Note, this is a common law rule, but there is no UCC rule
Sent - leaves offerees hands and put in hands of delivery agency - mailbox rule
Acceptance effective when sent (cont.)
Authorized means a) If offer specifies, means specified in offer b) If offer does not specify
1) Old common law rule means used to send offer is impliedly authorized (and only authorized means) 2) Modern rule, as reflected in UCC 2-206(1)(a) Any reasonable means under the circumstances is authorized
Case example - Defeo
Note offeror takes risk of not knowing, of non-delivery
WHEN IS ACCEPTANCE EFFECTIVE? (cont.)
2. When received, if sent by unauthorized means
Note offeree takes risk of late delivery, of non-delivery
3. Regardless of means, effective, if at all, when received, if: a) Offer specifies effective on receipt
e.g., must have your response by Tuesday at 3:00
b) Rejection or counteroffer sent first, if acceptance received before rejection or counteroffer received c) Option
Manner of Acceptance - Offer for Bilateral Contract
Definite promise - express or implied Silence?
Exceptions GOL 5-332
Manner of Acceptance Offer for Unilateral Contract
Accepted by performance Issue of offerors power to revoke Some changes to common law rule by UCC 2-206 (1) (b)
UCC 2-206 An (1)(b)
offer to buy goods for prompt or current shipment may be accepted by: performance - i.e., prompt or current shipment or promise to perform - i.e. promise to ship (so contract created)
or shipment of non-conforming goods
Variant Acceptance UCC 2-207
Common law - Mirror image rule Actual commercial practice exchange of forms - offer, acceptance, confirmation may contain different termsbattle of the forms
UCC 2-207 (cont.) UCC 2-207 addresses two questions: 1 - Was a contract formed by the writings exchanged? i.e., was the acceptance, which contained additional or different terms, an acceptance or was it a counteroffer, as it would be under common law? 2 - If a contract was formed, what are the terms? i.e., offerors? offerees? both?
UCC 2-207 (cont.)
1. Was a contract formed? i.e., was there an acceptance? Yes if
Definite and timely (seasonable) Not expressly conditioned on offerors agreement to additional or different terms
If conditional then it is a counteroffer, as it is under common law
UCC 2-207 (cont.) 2 - What are the terms of the contract? Provides different rules depending on whether both parties are merchants or not If both parties are merchants, additional term becomes part of contract unless:
Offer is limited to its terms Offeror objects Term materially alters (changes) offer
If one party is not a merchant, additional term does not become part of contract unless expressly accepted
Approach to answering problems
Chronological Was offer irrevocable? Why or why not? If so, attempts to revoke will be ineffective. What did each communication or act constitute? When, if ever, was each communication or act effective?