Contract Law: Offer and Acceptance
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Questions and Answers

What was one of the key issues addressed by the Carbolic court regarding the ad?

  • The fairness of the product pricing.
  • Whether the ad constituted a valid offer. (correct)
  • The history of the Carbolic company.
  • The reputation of the influenza vaccine.

Performance of the stated condition in a unilateral contract communicates acceptance.

True (A)

What standard did the court use to evaluate vague time limits in offers?

Reasonableness standard

The Carbolic case illustrates the nature of __________ contracts, where an offer is accepted by performance.

<p>unilateral</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Rejection = Refusal to accept an offer Expiration = Termination of an offer after a set time period Revocation = Withdrawal of an offer by the offeror Counteroffer = A response that modifies the original offer</p> Signup and view all the answers

Which of the following indicates that a contract has been accepted in a unilateral offer?

<p>Performing the requested act. (D)</p> Signup and view all the answers

What does an advertisement need to include to potentially be viewed as a binding offer?

<p>A clear and distinct promise</p> Signup and view all the answers

If an offer does not state a specific time for acceptance, it automatically remains valid indefinitely.

<p>False (B)</p> Signup and view all the answers

What is the primary argument made by consumer advocates regarding the RLCC?

<p>It departs from the principle that silence equals acceptance. (A)</p> Signup and view all the answers

The Mailbox Rule makes acceptance effective upon receipt by the offeror.

<p>False (B)</p> Signup and view all the answers

In a unilateral contract, how is acceptance achieved?

<p>By full performance.</p> Signup and view all the answers

In the case of Ever-Tite, acceptance could be provided through either __________ or the commencement of performance.

<p>written acceptance</p> Signup and view all the answers

Match the following cases with their key characteristics:

<p>Ever-Tite = Acceptance by written or performance Beard Implement = Requires dealer's signature for acceptance Carlill = Unilateral offer requiring performance for acceptance Davis v. Jacoby = Bilateral contract requiring a promise to perform</p> Signup and view all the answers

What is a primary distinction between unilateral and bilateral contracts?

<p>Unilateral contracts are accepted by full performance. (D)</p> Signup and view all the answers

In electronic contracts, terms such as clickwrap or browsewrap simplify consent processes.

<p>True (A)</p> Signup and view all the answers

What is the role of the 'master of the offer' principle in contract law?

<p>The offeror dictates the terms of acceptance.</p> Signup and view all the answers

Acceptance by mail is effective on __________ unless otherwise stated by the offeror.

<p>dispatch</p> Signup and view all the answers

Which aspect of modern contracting creates complications in offer and acceptance?

<p>The rise of e-commerce and digital contracts (B)</p> Signup and view all the answers

What kind of contract allows acceptance only through performance?

<p>Unilateral Contract (D)</p> Signup and view all the answers

A bilateral contract can be accepted by either a promise or performance.

<p>True (A)</p> Signup and view all the answers

What happens to an offer when the offeror dies?

<p>The offer is terminated by operation of law.</p> Signup and view all the answers

An ___ listing is a unilateral contract in real estate.

<p>open</p> Signup and view all the answers

Match the type of listing with its description:

<p>Open Listing = Allows multiple brokers to find a buyer Exclusive Listing = Only one broker works to find a buyer Exclusive Right to Sell = Broker earns a commission regardless of who sells Bilateral Contract = Requires a promise for acceptance</p> Signup and view all the answers

In the Ever-Tite Roofing Corp. v. Green case, what constituted acceptance?

<p>Commencing performance (C)</p> Signup and view all the answers

In Beard Implement Co. v. Krusa, a contract was formed despite the dealer's lack of signature.

<p>False (B)</p> Signup and view all the answers

What critical factor distinguished the acceptance methods in Ever-Tite and Beard Implement cases?

<p>The specificity of the acceptance method outlined in the contract.</p> Signup and view all the answers

The case of Davis v. Jacoby concluded that the offer was a ___ contract.

<p>bilateral</p> Signup and view all the answers

Which statement best represents the Restatement (Second) of Contracts § 32?

<p>In case of doubt, an offer invites acceptance either by promise or performance. (A)</p> Signup and view all the answers

The promise made by Mr. Whitehead in Davis v. Jacoby was considered a unilateral offer.

<p>False (B)</p> Signup and view all the answers

What is a primary characteristic of real estate brokerage contracts?

<p>Broker fees are contingent on performance.</p> Signup and view all the answers

A purchase order signed only by the buyer, requiring dealer acceptance, was ruled as not forming a valid ___ in Beard Implement Co. v. Krusa.

<p>contract</p> Signup and view all the answers

What is often a reason for the rarity of unilateral contracts in practice?

<p>They are less enforceable than bilateral contracts. (B)</p> Signup and view all the answers

What type of contract does a bilateral contract fully protect?

<p>Both sides (B)</p> Signup and view all the answers

Silence can always be considered as acceptance in contractual agreements.

<p>False (B)</p> Signup and view all the answers

What is the significance of the Carbolic Smoke Ball case?

<p>It established that a unilateral offer can be accepted by performance without notification.</p> Signup and view all the answers

In a unilateral contract, the offeror states, 'If you ______, I will pay Y.'

<p>do X</p> Signup and view all the answers

Match the following contractual terms with their definitions:

<p>Bilateral Contract = A contract where both parties make promises to each other Unilateral Contract = A contract where only one party promises something Mailbox Rule = Acceptance is effective upon dispatch, not receipt Revocation = Withdrawal of an offer before acceptance</p> Signup and view all the answers

What was one of the defenses used by the defendant in Carlill v. Carbolic Smoke Ball Co.?

<p>The ad was mere puffery (D)</p> Signup and view all the answers

An offeror can set conditions for how acceptance is to be communicated.

<p>True (A)</p> Signup and view all the answers

What happens if an acceptance is mailed before a specified deadline?

<p>It is considered timely if postmarked before the deadline.</p> Signup and view all the answers

Davis v. Jacoby highlights the importance of ______ in contractual acceptance.

<p>context</p> Signup and view all the answers

Match the concepts related to acceptance:

<p>Performance = Method of acceptance in unilateral contracts Effective Revocation = Upon receipt by the offeree Acceptance by Mail = Effective upon dispatch Silence = Generally does not imply acceptance</p> Signup and view all the answers

What characterizes a unilateral contract?

<p>Requires only one party to perform (B)</p> Signup and view all the answers

Accepting a unilateral contract requires notification to the offeror during performance.

<p>False (B)</p> Signup and view all the answers

What risk does the mailbox rule place on the offeror?

<p>The risk of delay or loss in communication.</p> Signup and view all the answers

A notice of revocation is effective only upon ______.

<p>receipt</p> Signup and view all the answers

What does 'continuing offer' refer to in unilateral contracts?

<p>Ongoing performance may constitute acceptance (A)</p> Signup and view all the answers

Flashcards

Unilateral Contract

A type of contract where one party makes a promise in exchange for the other party's performance of a specific act.

Offer

A statement of willingness to enter into a contract on specific terms, made with the intention of being legally bound upon acceptance.

Acceptance

The act of agreeing to the terms of an offer, creating a binding contract.

Acceptance by Performance

A type of acceptance where the offeree performs the requested act, fulfilling the terms of a unilateral contract.

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Offer in an Ad

A legal doctrine stating that an offer can become a binding contract if the offeror creates a clear and distinct promise, inviting the offeree to perform a specified act.

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Expiration by Its Own Terms

When an offer terminates due to the passage of time, either explicitly stated or implied by a reasonable timeframe.

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Revocation by the Offeror

An offer can be revoked by the offeror before it's accepted, except in specific cases like option contracts or partial performance in unilateral contracts.

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Counteroffer

A counteroffer is a response to an offer that changes the terms of the original offer, effectively rejecting the original offer.

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Master of the Offer

The offeror controls the terms of acceptance, dictating how and when acceptance can occur. The offeror's wording is paramount in determining valid acceptance.

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Mailbox Rule

Acceptance is considered effective upon dispatch (e.g., sending a letter) if the offeror didn't specify otherwise.

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Received Acceptance

Acceptance is effective when received by the offeror if explicitly stated in the offer terms.

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Clickwrap Agreement

Acceptance by clicking a button or check box acknowledging agreement with online terms of service. Often used for online purchases.

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Browsewrap Agreement

Acceptance by browsing and using a website implies consent to its terms of service, often displayed at the bottom of the page.

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Explicit Acceptance Methods

Expressly defining acceptable methods for acceptance in the offer, such as 'written acceptance' or 'commencing performance'.

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Offeror Determines Acceptance

The contract's formation is highly dependent on the terms set by the offeror. The offeror dictates how and when the acceptance can occur.

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Death or Incompetency of Offeror

An offer is terminated by operation of law if the offeror dies or is adjudicated incompetent.

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Offers Inviting Acceptance by Either Promise or Performance

Offers that allow acceptance either by a promise or by performance.

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Unilateral Contracts in Practice

Rewards for specific actions, like finding lost property or selling real estate.

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Common Practice: Bilateral Contracts

Most business deals use a promise as the form of acceptance.

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Restatement 2nd of Contracts § 32

A method for accepting an offer that minimizes confusion about the method of acceptance.

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Open Listing

A real estate listing where the broker gets a commission only if they successfully find a buyer.

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Exclusive Listing

A real estate listing where the broker promises best efforts and the seller promises a commission if the broker finds a buyer.

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Exclusive Right to Sell

A real estate listing where the broker promises best efforts, and the seller promises a commission if the property is sold by anyone, regardless of who finds the buyer.

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Ever-Tite Roofing Corp. v. Green

A case where starting performance by loading trucks and traveling to the site was deemed sufficient for acceptance of a roofing contract.

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Beard Implement Co. v. Krusa

A purchase order signed by the buyer but not by the dealer was not considered binding when acceptance required the dealer’s signature.

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Davis v. Jacoby

A case where the promise to come and provide care for an elderly couple was considered acceptance of a bilateral offer, even though the offeror died before performance.

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Presumption in Favor of Bilateral Contracts

When an offer doesn't explicitly state how it can be accepted, the law assumes it can be accepted by either a promise or performance.

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Puffery

A statement that is not intended to be a legally binding offer. Usually used in advertising or promotional materials.

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Offer to the Public

A contract formed by an offer made to the public, generally accepted through performance of specified actions.

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Revocation

When the offeror, through their actions or words, clearly expresses their intent to terminate the offer before acceptance.

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Reward-type Offer

An offer made to the public with the intent to be accepted by anyone who fulfills the conditions.

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Offeror as Master of the Offer

The legal principle that the offeror controls the terms of the offer and can specify the form or method of acceptance.

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Silence as Acceptance

Generally, silence does not imply acceptance. However, there are exceptions where past dealings or specific circumstances suggest acceptance.

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Effective Time of Acceptance

The point in time where acceptance becomes legally effective. For mailed acceptance, it's when the acceptance is sent (dispatch)

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Race Between Revocation and Acceptance

A situation where a revocation and acceptance are both in transit, creating a 'race' to see which one is received first.

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Acceptance by Commencement of Performance

The principle that starting performance can constitute acceptance, but finishing performance may be required depending on the terms of the offer.

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Compliance with Offer Terms

A legal principle that the terms of an offer must be complied with for acceptance to be valid.

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Study Notes

Carbolic Smoke Ball Case

  • Carbolic Smoke Ball Co. made a public offer to pay £100 to anyone who used their product as directed and still contracted influenza.
  • The court ruled this was a valid unilateral offer, not just "puffery."
  • Acceptance was by performance—using the smoke ball as directed and getting sick.
  • Notice of acceptance wasn't required; the act of using the product sufficed.

Offer and Acceptance Principles

  • Offers can be terminated by rejection, expiration, revocation, or death/incapacity.
  • A unilateral contract is accepted by performance.
  • A bilateral contract is accepted by a promise.
  • Some offers allow acceptance by either a promise or performance.
  • Offers inviting acceptance by performance can be accepted once performance begins
  • The offeror is the "master of the offer," controlling the manner and method of acceptance

Examples and Illustrative Cases

  • Ever-Tite Roofing Corp. v. Green: Acceptance by commencement of performance (loading trucks to the job site).
  • Beard Implement Co. v. Krusa: Acceptance required the dealer's signature; no contract formed without it.
  • Davis v. Jacoby: Circumstances suggested a bilateral contract (acceptance by a promise to perform).
  • Carlill v. Carbolic Smoke Ball Co.: Classic example of a unilateral contract; implied notification of acceptance once the conditions were met.

Additional Rules on Acceptance

  • Offerors can specify specific acceptance methods.
  • Silence generally does not constitute acceptance.
  • Special circumstances may permit silent acceptance

Mailbox Rule

  • Acceptance by mail is effective upon dispatch, not receipt.
  • Offers requiring "receipt" of acceptance do not apply to the mailbox rule
  • Revocation takes effect upon receipt by the offeree.

###Modern Nuances and RLCC

  • Modern electronic contracting complicates acceptance timing and methods.
  • The proposed Restatement of Consumer Contracts (RLCC) suggests binding terms even without a formal assent.
  • This creates an evolution of acceptance principles.

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Description

Explore the crucial principles of offer and acceptance in contract law through the Carbolic Smoke Ball case and other examples. This quiz covers unilateral and bilateral contracts, their acceptance methods, and key legal concepts. Test your knowledge and understanding of how contracts are formed.

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