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 (A)

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

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

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

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

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

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

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

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

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

The mailbox rule applies to rejections of offers.

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

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

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

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

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

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

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

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

<p>False (B)</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. (D)</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 (A)</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. (C)</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 (B)</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. (B)</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 (A)</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. (B)</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 (B)</p> Signup and view all the answers

Flashcards

Rejection of Offer

An offer can be terminated when the offeree rejects the offer, either explicitly or by making a counteroffer. The original offer is then no longer valid.

Expiration of Offer

An offer will automatically expire if a specific time limit was provided in the offer or if a reasonable amount of time has passed since the offer was made (if no specific time was provided).

Revocation of Offer

The offeror can withdraw their offer before it is accepted, unless there is a special agreement like an option contract which prevents revocation.

Death or Incompetency

An offer is terminated if either the offeror or offeree dies or becomes legally incapacitated.

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Counteroffer as Rejection

When an offeree makes a counteroffer, it is considered a rejection of the original offer. The original offer can no longer be accepted.

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Offeree Becomes Offeror

In a counteroffer, the original offer is deemed rejected by the offeree, and the offeree becomes the new offeror.

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Mailbox Rule (Acceptance)

Acceptance of an offer is effective when it is sent (e.g., by mail or telegram), as long as it is done within a reasonable timeframe.

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Rejection is Effective Upon Receipt

A rejection of an offer is effective only when received by the offeror.

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Mailbox rule for acceptances

Acceptance is effective when it is mailed, if properly addressed, etc., even if the offeror hasn't received it yet.

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Promise to hold offer open

A promise to keep an offer open is not binding without consideration. It's like an option contract that needs a price to be paid for the exclusivity.

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Indirect Revocation

Even if the offeror hasn't directly revoked, if the offeree learns the offeror has already sold the item to someone else, the offer is revoked.

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Option Contract

A separate, binding agreement that uses consideration to keep an offer open for a specific time.

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Firm Offer Rule (UCC § 2-205)

Under the UCC, a signed writing by a merchant promising to hold an offer open is irrevocable for the stated time, up to 3 months.

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Revocation of Unilateral Contract

A unilateral contract offer can be revoked any time before performance is completed, as the offeree has not acted to accept yet.

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Revocation of Unilateral Contract (Restatement)

Under the Restatement (Second), beginning performance of a unilateral contract makes the offer irrevocable.

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Acceptance of Unilateral Contract

An offer for a unilateral contract can be accepted only by completing the requested act. Partial performance doesn't accept the offer.

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Irrevocable Offer

A contract that is binding and cannot be revoked by the offeror even if the offeror changes their mind.

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Free Revocability

When an offer can be revoked by the offeror at any time before acceptance.

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Part Performance in a Unilateral Contract

When an offeree begins performing the required actions in a unilateral contract, creating an option contract. The offeror cannot revoke.

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Consideration to Keep an Offer Open

When an offeree gives something of value in exchange for a promise to keep an offer open.

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Reasonable Reliance by Offeree

When an offeree relies on an offer to their detriment, making the offer binding.

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Firm Offer Rule

A statutory provision that allows a merchant to make an irrevocable offer in writing for a specific time or a reasonable time (up to 3 months).

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Revoking Public Offers

Revoking a public offer (e.g., a reward) by making the revocation public.

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Rejection or Counteroffer on an Option Contract

Even if the offeree rejects or counteroffers, the option holder can still accept the original offer within the option period.

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Waiver

Giving up a right by action or inaction.

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Termination of Offeree's Power of Acceptance

The power of the offeree to accept the offer is terminated when the offer is rejected or a counteroffer is made.

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Acceptance

The offeree accepts the terms of the offer and creates a binding contract.

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Revocation

When the offer is withdrawn by the offeror before the offeree accepts.

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In-the-box acceptance

An agreement reached when a party keeps a product beyond a specified timeframe, accepting the seller's terms included within the packaging.

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Vendor as master of the offer

The seller has the power to propose acceptance by conduct, such as keeping a product.

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UCC §2-207

This section of the UCC governs the acceptance of an offer and clarifies when additional terms become part of the contract.

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Formation in any manner sufficient to show agreement

Parties can form a contract using any reasonable way to show agreement, even if that's just implied acceptance.

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Favorable policy toward arbitration

The policy of encouraging the use of arbitration to resolve disputes, often seen in contracts.

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Buyer as offeror

An agreement where the buyer is considered the offeror, and the seller's terms are considered proposals that need the buyer's explicit agreement.

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Express assent requirement

The buyer keeping a product doesn't automatically imply agreement to additional terms, especially in standard consumer transactions.

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Shrinkwrap terms

Terms included in the packaging of a product, often encountered in online or e-commerce purchases.

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Adhesion contract

A form of agreement where one party has significantly more power than the other, leaving the weaker party with little choice.

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No automatic enforcement of shrinkwrap terms

The buyer's acceptance of the product doesn't automatically make the in-the-box terms binding, especially when the buyer isn't a merchant.

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Buyer's purchase as offer

In consumer transactions, the buyer typically makes the offer, and the seller accepts by fulfilling the order.

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New terms need express assent

Terms added after the formation of the contract require express assent from the buyer, especially if they aren't a merchant.

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Seller's acceptance by shipping or delivery

The buyer's purchase is the offer, and the seller's acceptance is demonstrated by shipping or delivering the product.

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Battle of the forms

The process where multiple parties exchange forms, often with differing terms, and the courts must decide which terms prevail.

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No binding terms without agreement

The buyer is not bound by terms they never saw or agreed to, especially when those terms are presented after the purchase is complete.

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Counteroffer

A counteroffer rejects the original offer and terminates the offeree's power to accept unless the offer is revived or the counteroffer is a mere inquiry.

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Reviving an Offer

The offeree's attempt to accept an expired offer (after a counteroffer has been made) is invalid, unless the offeror renews the offer.

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Mirror Image Rule

In common law, a response to an offer that changes any term is considered a counteroffer, rejecting the original offer.

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Last Shot Doctrine

If a seller incorporates new terms into their acceptance, it's a counteroffer killing the original purchase offer and the last form sent wins if the other party accepts.

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U.C.C. § 2-207 (1)

UCC § 2-207 modifies common law for sales of goods, allowing additional or different terms in an acceptance to still be valid unless acceptance is expressly conditional on assent to the new terms.

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U.C.C. § 2-207 (2)

Under UCC § 2-207(2), if both parties are merchants, additional terms may become part of the contract unless they are expressly limited, materially alter the contract, or are timely objected to.

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Contract by Conduct

If both parties perform as if a contract exists, even with differing forms, the contract is formed by conduct under UCC § 2-207(3), with terms from the written agreement and UCC gap-fillers.

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Arbitration Clause

An arbitration clause is a provision in a contract that requires disputes to be settled by an arbitrator instead of a court.

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Material Alterations

A material alteration to a contract is a change that significantly affects the terms of the agreement.

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Non-Merchant

A non-merchant is a party who is not regularly involved in the sale of the type of goods being traded.

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Merchant-to-Merchant Transactions

In a merchant-to-merchant transaction, additional terms can become part of the contract unless they are material alterations and there is no timely objection.

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CISG

The CISG (United Nations Convention on Contracts for the International Sale of Goods) is an international agreement that governs contracts for the sale of goods between parties in different countries.

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CISG vs. UCC § 2-207

The CISG has similar principles to UCC § 2-207 regarding modifications as rejections, but the details and application can differ.

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Lapse of Time

An offer terminates at the time specified by the offeror. If no time is specified, it terminates after a reasonable time, depending on factors like the subject matter and context.

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Death or Incapacity of Offeror/Offeree

Death or incapacitation of the offeror or offeree generally terminates the offer. However, an option contract ensures the offer's irrevocability, surviving such events.

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Counteroffer vs. Independent Proposal

A counteroffer terminates the original offer. In contrast, an independent proposal doesn't affect the offer's validity if the acceptance is otherwise unchanged.

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Grumbling Acceptance

Even if the offeree expresses dissatisfaction, their acceptance is valid if they clearly agree to the offer's terms.

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Last Shot Rule

The last set of terms exchanged governs the contract if the other party's conduct indicates acceptance, like performing the contract. This approach is outdated, replaced by UCC § 2-207.

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UCC § 2-207 (Battle of the Forms)

This UCC provision addresses the 'battle of forms' and allows for contracts even if acceptance includes additional or different terms.

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§ 2-207(1): When Acceptance Operates as Acceptance

A definite and timely expression of acceptance is valid even with additional or different terms, unless acceptance is expressly conditional on the offeror's assent to the new terms.

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§ 2-207(2): Additional Terms as Proposals

If § 2-207(1) criteria are met, additional terms become proposals. They become part of the contract unless the terms are explicitly limited, materially alter the offer, or the offeror objects within a reasonable time.

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§ 2-207(2): Handling Different Terms

While § 2-207(2) addresses additional terms, different terms often fall out unless the other party agrees. This interpretation varies among jurisdictions.

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§ 2-207(3): Contract by Conduct

If writings do not form a contract under § 2-207(1) but the parties perform, a contract by conduct arises. Its terms are those agreed upon in writing, plus UCC gap fillers.

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UCC Gap Fillers

The UCC provides default terms, called 'gap fillers,' to complete a contract when certain details are omitted.

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UCC § 2-308: Place for Delivery

This UCC provision outlines the default place for delivery - usually the seller's business or residence if no business.

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UCC § 2-309: Time for Shipment/Delivery

This provision establishes a reasonable time for shipment or delivery, and allows for termination if the duration is indefinite.

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UCC § 2-310: Payment Due

Under this UCC provision, payment is due at the time and place the buyer receives the goods, unless otherwise agreed upon.

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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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