Chapter 11 The Agreement Acceptance What Is an Acceptance Acceptance a manifestation of assent to the terms of the offer made by the offeree in the manner invited or required by the offer 3 factors to an acceptance 1 2 3 the offeree intended to enter the contract the offeree accepted on the terms proposed by the offeror the offeree communicated his acceptance to the offeror Intention to Accept Present intent to contract Intent and Acceptance on the Offeror s Terms Common Law Traditional Mirror Image Rule An acceptance must be the mirror image of the offer If the offeree attempts to change the offer at all this is not an acceptance but instead a counteroffer No rejection is implied if the offeree makes an inquiry regarding terms or a grumbling acceptance accepting the offer while complaining UCC Standard for Acceptance on the Offeror s Terms The Battle of the Forms A Code provision called Battle of the Forms has changed the mirror image rule for contracts involving the sale of goods o It allows the formation of a contract even when there is some variance between the terms of the offer and the terms of the acceptance The Code provides that a definite and timely expression of acceptance creates a contract even if it includes terms that are different from those stated in the offer or even if it states additional terms that the offer did not address An attempted acceptance that was expressly conditioned on the offeror s agreement to the offeree s terms would not be a valid acceptance The additional terms contained in the offeree s form are treated as proposals for addition to the contract contract unless o If the parties are both merchants the additional terms become part of the The offer expressly limited acceptance to its own terms The new terms would materially alter the offer The offeror gives notice of objection to the new terms within a reasonable time after receiving the acceptance To accept an offer for a bilateral contract the offeree must make the promise To accept an offer for a unilateral contract the offeree must perform the requested Communication of Acceptance requested by the offer act Manner of Communication The offeror has the power to specify the precise time place and manner in which acceptance must be communicated stipulation If the offeree has no stipulations for the acceptance of the offer the offeree can accept within a reasonable time by any reasonable means of communication When is Acceptance Communicated Acceptance by Instantaneous Forms of Communication Face to face telephone other means of communication that are virtually instantaneous when the offeree says I accept or words to that effect a contract is created assuming the offer still exists Acceptances by Noninstantaneous Forms of Communication mailbox rule properly addressed and dispatched acceptances can become effective when they are dispatched even if they are lost and not received by the offeror Operation of the Mailbox Rule Common Law of Contracts Comes into effect when offeree uses a manner of communication that is expressly or impliedly authorized by the offeror o Ex you may respond by mail and the offeree responds by mail An improperly dispatched acceptance or one that was sent by some means of communication that was nonauthorized would be effect when received not dispatched Operation of the Mailbox Rule UCC Reasonable means of communication depends on the circumstances o Speed and reliability of the means used o The nature of the transaction i e does the agreement involve goods subject to rapid price fluctuations o The existence of any trade usage governing the transaction o The existence of prior dealings between the parties The UCC rejects the traditional rule that such acceptances ones sent by some means that is unreasonable under the circumstances or if the acceptance is not properly addressed or dispatched i e misaddressed or not enough postage cannot be effect until received o It provides that an acceptance sent by unreasonable means would be effect on dispatch if it is received within the time that an acceptance by a reasonable means would normally have arrived Stipulated Means of Communication An acceptance by stipulated means of communication is effective on dispatch The difference is that an acceptance by other than the stipulated means does not create a contract because it is an acceptance at variance with the terms of the offer Special Acceptance Problem Areas Silence as Acceptance General rule an offeree s silence without more is not an acceptance An offeror cannot impose on the offeree a duty to respond to the offer Sometimes silence can be an acceptance o If there had been previous dealings between parties o If the offeree indicates that his silence is an acceptance Ex if you don t hear from me in 3 days I accept o If an offeree expects an offeror s performance knowing what the offeror expects in return Acceptance by Shipment The Code states than an order requesting prompt or current shipment of goods may be accepted either by a prompt promise to ship or by a prompt or current shipment of the goods If the offeree ships nonconforming goods goods different from what the buyer ordered and they are accepted this is like accepting a counteroffer The code provides that prompt shipment of either conforming goods or nonconforming goods operates as an acceptance of the order o Protects buyers because sellers who ship the wrong goods have simultaneously accepted their offers and breached the contract by sending the wrong merchandise o Sellers are protected by the Code in that no contract is created if the seller notifies the buyer within a reasonable time that the shipment of nonconforming goods is intended as an accommodation In this case the shipment is merely a counteroffer that the buyer is free to accept or reject and the seller s notification gives the buyer the opportunity to seek the goods he needs elsewhere Who Can Accept an Offer the original offeree The only person with the legal power to accept an offer and create a contract is An attempt to accept by anyone other than the offeree is treated as an offer because the party attempting to accept is indicating a present intent to contract on the original offeree s terms
View Full Document
Unlocking...