MANGMT 3540 1st Edition Lecture 9 Outline of Last Lecture I Substantive Criminal Law II Crimes related to Business III Defenses to Crimes Outline of Current Lecture IV Mutual Manifestation of Assent V Offer Defined and Four Non Offers VI VII VIII IX X XI Three Requirements for Valid Offer When does offer terminate Requirements for Valid Acceptance Acceptance and Unilateral Contracts Introduction to Uniform Commercial Code Variations under the UCC Current Lecture I Mutual Manifestation of Assent A Offer and Acceptance i Both offer and acceptance are viewed objectively B Standard of Objectivity i Look at words spoken or written and conduct and what they would mean to a reasonable person II Offer Defined and Four Non Offers A Definition of a valid offer i A serious specific offer and a specific demand in a contract setting B Four Non Offers i Expressions of opinion 1 A statement as to general quality or a prediction 2 E g contractor s estimate vs bid My car s worth 10 000 Surgeon your boy s leg will heal in a few days These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute ii Statements of Intention 1 A statement of what one may do in the future I plan 2 E g I plan on selling my son s car for 1 000 I may I m going to I m considering iii Preliminary Negotiations 1 Inquiries or general discussions of potential contract terms 2 E g Are you interested in would you take 1 000 for your son s car Would you consider 750 for the car iv Certain Advertisements and Auctions 1 With Ads the danger is multiple acceptances 2 Ads are not offers unless they are very specific eliminating multiple acceptances Fur buyer example 3 E g Catalogs Craig s list 4 Auctions are not offers unless they are advertised without reserve opposite of eBay III Three Requirements for Valid Offer A Intention i Serious and objective intention by offeror to be bound ii Offers made in obvious anger jest or excitement are not binding iii E g an offer made while drunk is not valid B Definiteness i An offer definite enough to ascertain terms of contract ii Including names description of goods or services quantity price and important delivery terms C Communication i Offer must be communicated to the offeree 1 Communication by the offeror 2 Receipt by the offeree IV When does offer terminate A By Reovcation by the Offeror i Revocation is typically possible any time up to acceptance even if the offeror said he would keep it open for a certain period of time 1 E g Garage sale offer for lawn mower seller promises it will be open ii Exceptions options contracts where money is paid to keep the offer open a merchant s firm offer under the UCC see below B By lapse of time i Stated time this offer is open for 3 days ii Reasonable time if a time is not stated the offeree has a reasonable time to accept 1 The amount of time which is reasonable will vary with the situation for example it will be a short time if it is an offer to buy commodities like bananas whose value will decline rapidly C By Rejection or counteroffer i Any manifestation of rejection or a counter offer terminates the offer ii Mirror image rule an acceptance that contains new or varying terms is considered a rejection and counter offer The acceptance must be a mirror image of offer or it is invalid D By Operation of Law i Death or incompetence of either party ii Intervening illegality performance becomes after the offer but before acceptance illegal e g zoning charge iii Destruction of the subject matter of the contract E By terms of the offer i E g this loan commitment shall be binding upon the bank until the prime interest rate rises by of 1 or more True or False A An estimate is an offer to perform for the estimated price FALSE B In a land sale contract the offer must contain the price TRUE C At a garage sale an offer that simply states I ll buy that mower from you for 100 is sufficient TRUE this is enough D Once an auctioneer begins to solicit bids on an item normally the seller has made an irrevocable offer to sell to the highest bidder FALSE E If I tell you I ll hold an offer open I typically can t revoke it until the time I gave you passes False can revoke because you didn t give me anything to keep the offer open F I am entitled to a reward offered to return a diamond ring only if I saw the reward offer before I returned it TRUE offer must be received before I can accept it AND must see it to receive it G Will you take 100 for that bike is a valid offer FALSE it s an inquiry negotiation H If I ve received an offer for my land and the house on it burns down the offer is terminated TRUE I If I give you 10 for you to hold an offer open for 30 days you still don t have to hold it open FALSE J If I tell you I ll hold a valid offer open and you accept before I revoke we have a contract TRUE V Requirements for Valid Acceptance A Acceptance by Whom i Must be made by offeree not another person B Terms of Acceptance 3 requirements i Must be unconditional unequivocal and under the same terms ii Unconditional absolute iii Unequivocal decisive iv Same terms must be the mirror image of the offer or it s rejection C Must be Communicated i Silence is not acceptance absent prior agreement ii Timely acceptance must accept before offer terminates by any means 1 Acceptance is effective when correctly mailed or sent by similar means even if never received according to the mailbox rule The mailbox rule has no application in email or internet acceptances 2 Remember offers and revocations must be received to be valid iii Acceptance must be sent by reasonable means for the mailbox rule to apply iv An offeror may negate the mailbox rule and specify exactly how acceptance is to be made and when it is effective 1 Example Fred says to Tom I d like to hire you to build my chimney Will you keep your 1 500 offer open for 5 days Tom says sure Just send me a letter if you want to accept Tom mails a revocation on 2nd day Fred mails an acceptance on 4th day Fred receives Tom s revocation on 5th day Tom received Fred s acceptance the 6th day Revocation is invalid on 5th day