Contracts- Peppet- Fall 2005-13pp

Contracts- Peppet- Fall 2005-13pp - Formation Offer o...

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Formation - Offer o Objective Test for Offer - R.§ 24 Manifestation of willingness to enter into bargain o Creation Bilateral K Both promise K created when offer accepted Unilateral K Promise exchanged for performance K created by significant (can be partial) performance o Intent to be bound Duty to read & Capacity to understand document – Ray v. William G. Eurice Unconscionable: no K – Burch v. 2 nd Judicial District Court of Nevada Illiteracy irrelevant if understood - Rollins v. Foster o No further assent necessary – R.§ 26 Preliminary negotiations req’d: no K– Logergan v. Scolnick o Reasonableness 20 Bishops Rule Irrelevant if bishops would vouch for you - What reasonable person in position would think offer meant Unreasonable: no K - Leonardo v. Pepsico Offeree doesn’t know it’s a joke and seems reasonable: K ok – Lucy v. Zehmer o Advertisements Generally not offer Reasonable party test can make it an offer – Izadi v. Machado (Gus) Ford, Inc. o Option K In writing, signed, recitation of consideration, exchange w/in reasonable time – Berryman v. Kmoch o Firm Offer – UCC §2-205 Signed record, terms hold open, irrevocable for lack of consideration during state time/ 3 months, and separate form supplied by offeree signed by offeror Merchants, sale of goods Must state it is Irrevocable o Look at Missing terms Invitation to bid Prior communication Unreasonable conditions/risk 1
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Quote v. Offer Power of Acceptance o UCC § 2-204 – Expression of Acceptance Show agreement Missing terms do not void K - Acceptance (Battle of the Forms) o Common Law Mailbox Rule – R.§ 63 Acceptance effective as soon as dispatched – Logergan v. Scolnick Acceptance not operative until received by offerer Mirror Image Rule – R.§ 59 Acceptance must be of the exact same terms as offer Purported acceptance adding conditions is counteroffer Counteroffer – R.§ 39 Offeree becomes offerer, loses power of acceptance but becomes master of the offer Last-Shot Rule o Last form becomes offer and can be accepted by performance – Princess Cruises Inc. v. General Electric o UCC Expression of acceptance, intent to accept § 2-207 – Additional Term in Acceptance or Confirmation Sent w/in reasonable time Acceptance expressly made conditional upon assent to new terms Counteroffer – Brown Machine v. Hercules Material alteration + Surprise & Hardship = Counteroffer – Dale Horning v. Falconer Glass o Price, quantity, subject matter o Negation of standard warranties o Requirement guaranteeing 90-100% deliveries when trade usage much more lenient o Clause for seller to cancel if failure to meet invoice date o Clause requiring complaints be made in much shorter time than customary/reasonable o NOT: Force Mejours Reasonable fixed time for complaints Customary trade rejection for defects Exclusion of consequential damage Different not additional Terms Knockout Rule 2
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