Morrison v Thoelke (P cancelled contract same day it reached D by mail) – acceptance is effective upon dispatch if it is properly addressed and stamped. Plaintiff argued that you have the right to get your mail back once you put it in the mailbox – court said that just because you have the power to get your mail back, you don’t have the right. Court puts the risk on offeror because it closes the deal more quickly and enables performance more promptly. An acceptance by mail is irrevocable after it is mailed. Deposited Acceptance Rule : - contract is complete upon deposit of acceptance in mail. 1. court must draw a line at which point contract is complete. 2. contracts revocable at any time prior to acceptance. 3. meeting of mind is upon instant posting. b. Exception: Mail box rule does not apply to firm offers or option contracts – acceptance is effective when the offeror receives it, not when the offeree puts it in the mail. c. The mail box rule is an exception to acceptance having to be communicated. Mail Box Rule & Option Contracts: If there is a valid option contract, the usual mail box rule does not apply. To be an effective acceptance, it must be received during the option period to be effective. Mail Box Rule does not apply to option contracts. Mailbox rule only applies to an acceptance, it does not apply to a rejection. Revocation takes place when it is received. THE MAILBOX RULE: What is the effect of dual responses by OEE? - Rejection followed by acceptance: o If OR receives rejection first = No K; acceptance treated as a counteroffer. o If OR receives acceptance first = contract formed. - Acceptance followed by rejection: o Contract is formed regardless of order received. For E-Mail, Acceptance takes place as soon as it is sent. 17
TENDER – An unconditional offer to perform coupled with the demonstrated ability to carry out the offer of performance and to produce the subject matter of the tender. Option Contracts Option Contracts An option contract is created when the offeree has given the offeror something in exchange for the offeror’s promise to keep the offer open for the period of time agreed upon. § 45. Option Contract Created By Part Performance Or Tender: Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer. Marchiondo v. Scheck (1967) Broker was given revocation prior to Option contract deadline and was able to enforce contract F. Option v Option Contracts Option: - Revocable - No Consideration Option Contract: - Irrevocable during period stated - Consideration - Can be verbal - If offeree terminates after giving consideration, he is not entitled to get his consideration back 18
Hypo: Option Option Contract Oct 1.
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