Chapter 10 Contracts The Agreement Offer o Requirements of an Offer An offer is a promise conditional on an act return promise or forbearance refraining from doing something Parties to a contract must have intent to enter a binding agreement terms must be definite and the offer must be communicated to the offeree by the offeror Intent o An offeror must indicate present intent to a contract or the intent to meet the contract obligation upon acceptance o Courts use the objective theory of contracts Would a reasonable person judge the offeror s words and acts in the context of the circumstances to signify intent Definiteness of terms o Offer and resulting contract must be definite and certain Offer cannot be vague about major points Ex I ll paint your house until im tired is too vague Ill finish painting your house in three days is definite o Armstrong v Rohm and Haas Company Inc Fired everyone and told them to accept severance and start a new company stating that the old company would like to outsource all work to the old employees Court decided that the agreement was too vague and therefore unenforceable in a court of law o Definiteness under the UCC UCC often creates contractual liability where no contract would result under common law Article 2 states contracts can be created in any manner sufficient to show agreement including conduct A price quantity delivery and time for payment left open in a contract can be filled by inserting a presumption found in the Code s rules Advertisements Rewards Auctions and Bids o Ads for a sale of goods at a specified price generally are not considered offers but as invitations to offer or negotiate Examples flyers handbills catalogs listing prices Sales puffery is not an offer o Advertisements offering rewards for lost property information or capture of criminals are treated as offers for unilateral contracts To accept the offer and receive the reward an offeree must perform the requested act as in returning a dog to its owner o Advertisements for bids and sellers at auctions generally treated as making an invitation to offer so those who bid are making an offer that seller may accept or reject o Gleason v Freeman an online real estate auction is not a binding contract but a non binding advertisement Termination by Revocation before the offer is accepted Exceptions o An offer may be terminated by revocation in revoked and communicated to offeree Option contract in which an offeror agrees not to revoke the offer for a stated time in exchange for some valuable consideration Offers for unilateral contracts rewards Promissory estoppel circumstances Firm offers for sale of goods Rejection offeree expressly rejects unwilling to accept offer or impliedly rejects the offer by making a counteroffer o An offer to contract on terms materially different from terms of the original offer Lapse of time and expiration of offer Death or disability of either party Subsequent illegality
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