Business Law Ch 11 (Unit 2)

Meeting of the minds

parties can form a contract only if they had a ____ __ ___ _____
requires that they understood eachother and intended to reach an agreement

offer

An _____ is an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms

offeror

The person who makes the offer is the

offeree

The person to whom the offer is made is the

Two questions determine whether a statement is an offer

Did the offeror intend to make a bargain?
Are the terms of the offer definite

(offer) Problems with Intent

-Invitations to Bargain
Not an offer
-Price Quotes
Generally not an offer
-Letters of Intent
May sometimes be treated as contracts
Cochran v. Norkunas (2007)
-Advertisements
Generally not an offer
An advertisement is merely a request for offers
There are

offer (problems with definiteness)

The terms of the offer must be definite
Baer v. Chase (2004)
Toyota or Toy Yoda (Hooters)

offer (UCC and Open Terms)

UCC Section 2-204(3) - Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is certain basis for giving an appropriate remedy
If the contract does not c

offer (Delivery, time and payment)

Generally, place of delivery is the seller's business
The time for shipping goods is usually a reasonable time, based on the normal trade practices
Payment is usually due when and where the buyer receives the goods

offer (warranties)

-Implied Warranty of Merchantability - The goods must be of at least average, passable quality in the trade
-Implied Warranty of Fitness for a Particular Purpose - If seller knows that buyer plans to use the goods for a particular purpose, the seller is g

offer (termination by revocation)

Revocation is effective when received by the offeree
Firm Offers and Revocability
A firm offer is one that by its own terms will be held open for a given period
Common Law Rule - Under the common law, revocation of a firm offer is effective if the offeree

offer (termination by rejection)

If an offeree rejects an offer, the rejection immediately terminates the offer
Counteroffer - A counteroffer is a rejection

termination by expiration (offer)

When an offer specifies a time limit for acceptance, that period is binding
If the offer specifies no time limit, the offeree has a reasonable period in which to accept

(offer) termination by operation of law

Death or mental incapacity of the offeror terminates an offer, whether the offeree knows of the change or not
Destruction of the subject matter terminates the offer
Supervening illegality

accepting a contract

The offeree must say or do something to accept
When the offer is for a bilateral contract, the offeree must generally accept by making a promise
When the offer is for a unilateral contract, the offeree must accept by performing
If the offer is ambiguous,

mirror image rule

The common law mirror image rule requires that acceptance be on precisely the same terms as the offer

UCC and the battle of forms

UCC Section 2-207 dramatically modifies the mirror image rule for the sale of goods
Additional or Different Terms
An offeree who accepts may include in the acceptance terms that are additional to or different from those in the offer
If the offeree states

communication of acceptance

The "medium" refers to whether the acceptance is done in person or by mail, telephone, e-mail or fax
The "manner" refers to whether the offeree accepts by promising, by making a down payment, by performing and so forth
If an offer demands acceptance in a

time of acceptance: the mailbox rule

An acceptance is generally effective upon dispatch, meaning the moment it is out of the offeree's control
Soldau v. Organon, Inc. (1988)

PROMISSORY ESTOPPEL

Under the doctrine of promissory estoppel, even if there is no contract, a promise may be enforceable if:
The offeror makes a promise knowing the offeree is likely to rely on;
The offeree does in fact rely; and
The only way to avoid injustice is to enforc