Schmitz - Ks - Fall 2004 - Long Outline

Schmitz - Ks - Fall 2004 - Long Outline - K FORMATION OFFER...

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K FORMATION: OFFER & ACCEPTANCE OFFER Re2d § 24: OFFER: “The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Ask: Is it a Clear Manifestation of a Definite Intention to Be Bound? if Yes? then Power of Acceptance Intent overrides lack of terms The offeror is the master of the offer. Preliminary Negotiations are not offers-Rest § 26: Ads are not offers –they are invitations to bargain (generally) Leonard v. Pepsico, Inc. - Harrier Jet case –he took ad as an offer Quotes are not offers –they are generally an invitation to enter negotiations Revocation of Offer Prior of Acceptance Allen R. Krauss Co. v. Fox – renege of counteroffer on prop before acceptance S.M. Wilson & Co. v. Prepakt Concrete Co . –bid invitation cards (PROM ESTOP / U/T) Newberger v. Rifkind -5 emps offered stock options, continued emp was consideration § 41 Has to be with in reasonable amount of time or w/in time specified in offer § 42: Revocation by Communication From Offeror Received by Offeree: “An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.” § 43: Indirect Communication of Revocation: “An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.” § 32: Invitation of Promise of Performance – If doubt - there is offer if the offeree is invited to accept either by promising to perform of by performing If no consideration given or promissory estoppel, Offer Can Be Revoked at Any Time -Offer is revocable up until time it’s accepted. Irrevokable Offers Option Ks (Rest 87) - not revocable either by statute or if it is in writing, signed, recites consideration, and proposes exchange on fair terms w/in reasonable time -If there is consideration to support an option K, then it must stay open in accordance with the option K -Allen Krauss v. Fox: Held: If it’s not a binding option, offeror free to revoke. Firm Offer where nominal consideration has been Given (otherwise a firm offer (an offer that’s to remain open until a fixed date) can be revoked prior to the expiration of its term) Reliance -Offer is irrevocable if offeror should have foreseen that offer would induce reliance-Rest 87(2) - Wilson v. Prepakt Concrete: Sub-contractor’s bid was irrevocable b/c relied on by contractor. 1
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Part Performance Rest 62 -Offer for unilateral K in which performance has begun -If only preparation has begun, then offeror can revoke, but he gets reliance damages Firm Offer by Merch (UCC 2-205) to buy or sell goods in a signed writing, where terms give assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is
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