BUS311_chapter_04

In such instances the general rule is that an

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Unformatted text preview: that the offeree can use any reasonable means of acceptance. In face-to-face transactions, acceptance is usually communicated verbally. As soon as assent is given, a contract is formed that obligates both parties to render whatever performance was promised. Since a contract comes into existence as soon as the offeror’s offer is accepted by the offeree, problems can arise when parties are not dealing face to face when a contract is made. In such instances, the general rule is that an acceptance is binding at the time that it is sent. Therefore, leaving a voice message on an answering machine constitutes acceptance at the time that the message is recorded, not at the time that it is actually heard by the offeror. Likewise, sending an e-mail message or a telegram containing a valid acceptance results in a valid contract as soon as the messages are sent. Consider the following situation: rog80328_04_c04_062-088.indd 76 10/26/12 5:42 PM Section 4.4 Consideration CHAPTER 4 Example 4.22. Joan offers to sell Matilda a used television set for $100. Matilda writes Joan a letter in which she accepts the offer. She mails the letter at 5 p.m. The next morning, before the mail is delivered, Joan calls Matilda and tells her that she wishes to revoke the offer. May she do so? This illustrates the mailbox rule, which states that as long as mail is a proper way to accept an offer, the acceptance takes effect and forms a binding contract as soon as a properly addressed and stamped envelope is mailed. Matilda’s acceptance was effective, and they have a contract, as soon as Matilda mailed her letter to Joan, and Joan’s attempted revocation is too late. This is true even though Joan has not yet received the acceptance. Even if the postal service loses the letter, there is still a contract as long as the letter was properly addressed and had the right postage. This may seem unfair, but keep in mind that the offeror can easily protect himself by requiring as part of the offer that acceptance be made...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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