Contract Law: Offer Termination
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Questions and Answers

Which of the following is NOT a mode of termination for an offer?

  • Acceptance by another offeree (correct)
  • Expiration of time
  • Rejection by the offeree
  • Revocation by the offeror

    • A counteroffer serves as a rejection of the original offer.

    True

    What principle determines when acceptance via telegraph is valid?

    Acceptance is valid when dispatched within a reasonable time.

    An offer can be revoked by the _____ before it is accepted.

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

    Match the following case to its principle:

    <p>Minnesota Linseed Oil Co. v. Collier White Lead Co. = Reasonable time for acceptance is crucial in fluctuating markets Kempner v. Cohn = Property purchase negotiation and offer validity</p> Signup and view all the answers

    Under what circumstance does the mailbox rule NOT apply?

    <p>To rejections</p> Signup and view all the answers

    The death or incompetency of either the offeror or offeree can lead to termination of the offer.

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

    What influences the determination of a reasonable time for acceptance?

    <p>Market fluctuations, nature of goods, prior dealings.</p> Signup and view all the answers

    What is the significance of the mailbox rule in contract law regarding acceptances?

    <p>Acceptance is effective upon posting.</p> Signup and view all the answers

    A promise to keep an offer open is always binding without consideration.

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

    What generally happens to an outstanding offer when the offeror dies?

    <p>The offer is terminated.</p> Signup and view all the answers

    The act of completing the requested act in a unilateral contract is known as __________.

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

    Match the following terms with their definitions:

    <p>Mailbox Rule = Acceptance is effective upon posting. Option Contract = Agreement to keep an offer open for a specified time. Indirect Revocation = Knowledge of the offeror's sale to another party revokes the offer. Firm Offer = An offer made by a merchant that must be held open without consideration.</p> Signup and view all the answers

    In Dickinson v. Dodds, why was there no binding contract?

    <p>Dickinson accepted after learning the property was sold.</p> Signup and view all the answers

    Acceptance of an offer can be effective if it is mailed before the offeror revokes it.

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

    What distinguishes an option contract from a regular offer?

    <p>It is supported by consideration.</p> Signup and view all the answers

    In the U.C.C., a merchant can make a __________ offer that does not require consideration if explicitly stated.

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

    What type of contract is formed if performance has not yet been completed in a unilateral agreement?

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

    An acceptance can become effective even if the offeror has died, as long as it was already dispatched.

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

    In the context of the U.C.C., what must a firm offer contain to be considered irrevocable?

    <p>A signed writing by a merchant.</p> Signup and view all the answers

    To uphold an option contract, __________ must be present alongside the offer to keep it open.

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

    Match the following court cases with their key rulings:

    <p>Dickinson v. Dodds = No binding contract due to indirect revocation. Petterson v. Pattberg = No contract as offeror revoked before completion. Minneapolis &amp; St. Louis Ry. Co. = Explores effect of revocation on offers. Tom Wolfe &amp; Ted Kaczynski = Concern with offer termination upon death.</p> Signup and view all the answers

    Which of the following events terminates an offeree's power of acceptance?

    <p>Rejection by the offeree</p> Signup and view all the answers

    An offer can be revoked at any time before acceptance regardless of any circumstances.

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

    What creates an option contract in a unilateral offer situation?

    <p>Beginning of performance by the offeree.</p> Signup and view all the answers

    An option contract limits the promisor's power to ______ an offer.

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

    Match the type of offer with the reason why it remains irrevocable.

    <p>Part Performance = Creates an option contract Firm Offer = Written assurance of keeping the offer open Consideration = Paying something of value to keep the offer open Reasonable Reliance = Offeree relies on the offer</p> Signup and view all the answers

    Which of the following is NOT an exception to the free revocability of offers?

    <p>Offer expiration after a week</p> Signup and view all the answers

    Bette can enforce Annie's promise to sell her the farm after making substantial improvements.

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

    What is a firm offer under UCC § 2-205?

    <p>A written offer made by a merchant assuring it will be held open.</p> Signup and view all the answers

    The ______ can revoke an offer if no exceptions apply.

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

    Match the section with its corresponding principle:

    <p>§ 36(1) = Termination of power of acceptance § 45 = Option contract created by part performance § 87(1)(a) = Consideration to keep the offer open § 2-205 = Firm offer rule</p> Signup and view all the answers

    What must happen for an offeree to keep their right to accept after making a counteroffer?

    <p>They must have a prior option contract.</p> Signup and view all the answers

    An offer that is made by public announcement can be revoked in private.

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

    What is required for indirect revocation to occur?

    <p>Reliable information that the offeror has taken definitive action.</p> Signup and view all the answers

    In case of ______, the offeree retains the right to accept even after rejection.

    <p>option contracts</p> Signup and view all the answers

    If the offeree starts painting a house based on an offer, what is the status of the offer?

    <p>It becomes irrevocable.</p> Signup and view all the answers

    What does the 'master of the offer' concept imply in contract formation?

    <p>The seller can dictate the terms of the offer.</p> Signup and view all the answers

    Under U.C.C. § 2–204, a contract can only be formed through a written agreement.

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

    What happens if a buyer retains a product beyond the specified time frame set by the seller?

    <p>The buyer accepts the seller's offer.</p> Signup and view all the answers

    The court criticized Hill's treatment of U.C.C. § 2–207 for removing standard buyer __________.

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

    Match the following court cases to their significant outcomes:

    <p>Hill v. Gateway = Vendor's in-the-box terms are part of the offer Klocek v. Gateway = New terms require express assent Minnesota Linseed Oil v. Kempner = Acceptance timing issues Dickinson v. Dodds = Indirect revocation is not binding</p> Signup and view all the answers

    Which of the following describes the Klocek v. Gateway decision?

    <p>The consumer was seen as the offeror.</p> Signup and view all the answers

    The mailbox rule applies to rejections of offers.

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

    What distinguishes option contracts from firm offers under the U.C.C.?

    <p>Option contracts require consideration, while firm offers do not.</p> Signup and view all the answers

    U.C.C. § 2–207 handles cases of __________ in contract formation.

    <p>non-identical forms</p> Signup and view all the answers

    What is a significant takeaway regarding shrinkwrap or clickwrap terms?

    <p>Contract formation timing and buyer assent are crucial factors.</p> Signup and view all the answers

    In typical consumer transactions, the seller's additional terms are considered the controlling offer.

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

    What principle does the U.C.C. § 2–207 promote regarding merchants?

    <p>It allows additional terms to become part of the contract unless they are material or objected to.</p> Signup and view all the answers

    A unilateral offer is __________ until the performance is completed.

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

    In the context of acceptance, which of the following is true?

    <p>An inquiry about changing terms counts as a counteroffer.</p> Signup and view all the answers

    What is the standard condition for the termination of an offer if no time is specified?

    <p>At the end of a reasonable time</p> Signup and view all the answers

    Death or legal incapacity of the offeror always terminates the offer regardless of contract terms.

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

    What is the result of a counteroffer under the mirror image rule?

    <p>It kills the original offer.</p> Signup and view all the answers

    Additional terms in a contract between merchants become part of the contract unless they __________ the offer.

    <p>materially alter</p> Signup and view all the answers

    Match the UCC gap fillers with their definitions:

    <p>§ 2-307 = Delivery in Single Lot or Several Lots § 2-308 = Place for Delivery § 2-309 = Reasonable Time for Shipment/Delivery § 2-310 = Payment due at the time/place of goods receipt</p> Signup and view all the answers

    Which of the following is an exception to the general rules of offer termination?

    <p>Firm offers by merchants</p> Signup and view all the answers

    Grumbling acceptance is considered a valid acceptance if it communicates agreement to the terms.

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

    What occurs when parties perform a contract despite not having a written agreement?

    <p>A contract by conduct arises.</p> Signup and view all the answers

    Under UCC § 2-207, an expression of acceptance operates as acceptance even if it contains __________ terms.

    <p>additional or different</p> Signup and view all the answers

    Match the scenarios with their outcomes:

    <p>Unilateral contract = Revocation is invalid if performance begins Option contract = Offer is irrevocable if consideration is given Firm offer = No consideration is needed for stability Counteroffer = Original offer is negated</p> Signup and view all the answers

    What happens if an acceptance is conditioned upon assent to new terms?

    <p>No contract is formed</p> Signup and view all the answers

    Under UCC § 2-207, different terms automatically become part of the contract.

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

    Describe the 'Last Shot Rule' in common law.

    <p>The last set of terms exchanged governs the contract if acceptance is indicated by conduct.</p> Signup and view all the answers

    The reasonable time for shipment or delivery is outlined in UCC § __________.

    <p>2-309</p> Signup and view all the answers

    In the Columbus Rolling-Mill case, what happened when the buyer initially offered to buy 1,200 tons of iron rails?

    <p>The seller rejected the offer.</p> Signup and view all the answers

    The "last shot" scenario in contract law typically arises from the "mirror image" rule and the doctrine that a counteroffer rejects the original offer.

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

    What is the key principle illustrated in the Columbus Rolling-Mill case?

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

    According to the common law "mirror image" rule, any ______ from the original offer constitutes a rejection and a counteroffer.

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

    Match the following cases with their key takeaways:

    <p>Columbus Rolling-Mill = A counteroffer terminates the original offer. J. Livingstone v. Evans = An offer can be revived by the offeror. A.C.Itoh &amp; Co. v. Jordan Int’l Co. = U.C.C. § 2-207(3) allows for a contract by conduct under certain circumstances. Hill v. Gateway 2000, Inc = Shrinkwrap terms can be binding even if they are not explicitly agreed to by the buyer.</p> Signup and view all the answers

    What is the main difference between the common law approach and the U.C.C. § 2-207 approach to the "battle of the forms"?

    <p>The U.C.C. § 2-207 approach allows for a contract even if the forms exchanged do not perfectly match.</p> Signup and view all the answers

    In Livingstone v. Evans, the court found that Evans's statement "Cannot reduce price" killed the original offer.

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

    Under U.C.C. § 2-207(1), what must happen for a written confirmation to be considered a counteroffer?

    <p>The acceptance must be expressly made conditional on assent to the new or different terms.</p> Signup and view all the answers

    In the context of shrinkwrap terms, the ______ is usually the party who learns of the terms after purchasing or receiving the product.

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

    Match the following U.C.C. § 2-207 subsections with their main purposes:

    <p>Subsection (1) = Defines when an acceptance is still valid despite containing additional or different terms. Subsection (2) = Addresses the effect of additional terms when both parties are merchants. Subsection (3) = Establishes a contract by conduct when the parties' writings do not form a complete agreement.</p> Signup and view all the answers

    What is the key legal question in the A.C.Itoh & Co. v. Jordan Int’l Co. case?

    <p>Whether the seller's acknowledgment form constituted a valid acceptance.</p> Signup and view all the answers

    The “Battle of the Forms” typically occurs when two parties exchange forms that do not match exactly.

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

    According to U.C.C. § 2-207(2), when can additional terms in a written confirmation between merchants become part of the contract?

    <p>When they are not material alterations and no timely objection is made.</p> Signup and view all the answers

    The U.C.C. § 2-207 approach is a departure from the common law ______ rule.

    <p>mirror image</p> Signup and view all the answers

    Match the following terms related to the “battle of the forms” with their definitions:

    <p>Mirror image rule = Requires an acceptance to perfectly match the terms of the offer. Last shot doctrine = The party that sends the last form before performance wins the &quot;battle of the forms&quot;. Material alteration = A change in the terms that significantly affects the contract's risk or obligations. Counteroffer = A rejection of the original offer and a proposition of new terms.</p> Signup and view all the answers

    In the Hill v. Gateway 2000 case, what were the Hills' options regarding Gateway's terms and conditions?

    <p>Reject the terms and return the computer within 30 days.</p> Signup and view all the answers

    Under the U.C.C., a contract that is formed by conduct under Section 2-207(3) includes all of the terms from the parties’ writings, even those not explicitly agreed upon.

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

    Study Notes

    Offer Termination

    • Four Modes of Termination: Rejection (including counteroffers), expiration/lapse of time, revocation by the offeror, and death/incapacity of offeror or offeree.
    • Rejection vs. Acceptance: Rejections are effective when received, while acceptances are often effective when sent. A rejection terminates the power to accept the original offer unless revived.
    • Counteroffers: Counteroffers are rejections, rendering the original offer invalid unless renewed. Distinguish between counteroffers and mere inquiries.
    • Reasonable Time: The time for acceptance depends on the circumstances (market fluctuations, nature of goods, prior dealings). A delay can make an acceptance untimely.

    Cases: Illustrative Examples

    • Minnesota Linseed Oil Co. v. Collier White Lead Co.: Acceptance by telegraph was deemed outside a reasonable time due to significant market fluctuations causing unfairness to the seller.
    • Kempner v. Cohn: The mailbox rule for acceptance applies. Revoking after acceptance is dispatched is ineffective. This shows a delay in acceptance was reasonable in the context of real estate.
    • Tom Wolfe & Ted Kaczynski Hypothetical: Death of the offeror terminates the offer, unless acceptance was already sent.
    • Dickinson v. Dodds: Knowledge of the offeror selling to another effectively revokes the offer, even if the initial stated time limit hasn't passed. Knowledge of inconsistent acts = revocation.
    • Petterson v. Pattberg: An offeror may revoke a unilateral contract offer before the offeree completely performs. Tender alone is insufficient for acceptance.
    • Minneapolis & St. Louis Ry. Co. v. Columbus Rolling-Mill: A counteroffer terminates the original offer. Subsequent attempts to accept the original terms are invalid unless renewed.
    • Livingstone v. Evans: A "counteroffer" can be a mere inquiry and not a rejection if the offeror responds to the inquiry and revives the offer.

    Option Contracts

    • Definition: An option contract is an irrevocable offer, supported by consideration, to hold an offer open; typically needed to maintain the offeror's promise to keep an offer open.
    • U.C.C. § 2–205 ("Firm Offers"): In sales of goods, a signed merchant's offer can be irrevocable without consideration. It needs signed writing, assurances it will be held open, and lasts for up to 3 months.
    • CISG Article 16(2): Similar to the U.C.C., explicit irrevocability or offeree reliance can create irrevocable offers.

    U.C.C. § 2–207: Battle of the Forms

    • Common Law vs. U.C.C. Common law uses the "mirror image rule" and "last shot" doctrine. The U.C.C. alters this approach for sales of goods, potentially recognizing a contract even with differing terms.
    • U.C.C. § 2–207(1): Allows acceptance with additional or different terms, unless acceptance is expressly made conditional on assent.
    • U.C.C. § 2–207(2): If both parties are merchants, additional terms typically become part of the contract (unless specific conditions prevent this).
    • U.C.C. § 2–207(3): Addresses contract formation by conduct when writings disagree. Terms are set by matching writings(including gap fillers from the Code).
    • C. Itoh & Co. v. Jordan Int'l Co.: A seller's acceptance conditional on assent to additional terms is a counteroffer, not a valid acceptance under § 2-207(1). Parties acting as if a contract exists forms a contract by conduct, excluding new extra terms.

    "Shrinkwrap," "Clickwrap," and "In-the-Box" Terms

    • Hill v. Gateway 2000, Inc.: Keeping the delivered product after receiving terms (a time limit to reject or return it) = acceptance (effectively bypassing § 2-207).
    • Klocek v. Gateway, Inc.: Contract formed when the product is initially purchased; in-the-box terms are treated as proposals requiring express assent (especially for consumers).

    Key Takeaways

    • Offers can terminate in explicit ways, or implicitly depending on circumstances (rejection, lapse of time, revocation, death).
    • Exceptions to the general revocability of offers exist.
    • The UCC's approach for sales of goods via § 2-207 offers more flexibility than the common law when dealing with inconsistencies between offer and acceptance.
    • Understanding different terms (additional, different, conditional) and their implications for contract formation is essential.
    • "Shrinkwrap" terms typically require express assent for inclusion in the contract and require close reading of the terms of sale, often depending on the circumstances, whether a consumer or merchant, and whether the offeror or offeree is the "master of the offer."

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    Description

    This quiz covers the different modes of offer termination, including rejection, expiration, and revocation. It also discusses the significance of counteroffers and the concept of reasonable time for acceptance in contract law. Illustrative cases provide practical examples of these principles.

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