This lesson introduces offer and acceptance as central parts of contract formation and explains how courts identify a genuine offer.
Offer and acceptance are traditionally analyzed as essential elements of contract formation, alongside matters such as consideration and legal capacity. A contract generally requires an offer capable of acceptance and an acceptance that objectively indicates agreement to it. Modern contract law also draws on doctrines such as estoppel, misrepresentation, misleading conduct, and unjust enrichment, so offer and acceptance are not the only ideas that may matter.
All flashcards
What is an invitation to treat?
A preliminary communication inviting others to make offers or negotiate, rather than an offer normally open to immediate acceptance.
What is a bilateral contract?
An agreement formed through an exchange of promises between the parties.
What is an option contract?
An agreement that can keep an offer open for a specified period, subject to applicable legal requirements.
What is the battle of the forms?
A dispute over conflicting standard terms exchanged by parties who behave as though they have made a contract.
What is the postal rule?
When applicable, acceptance by post takes effect when properly posted rather than when received.
Quiz questions
A shop displays a product on a self-service shelf with a price label. Under the usual common-law approach, what is the display generally treated as?Answer: An invitation to treat; the customer generally makes the offer at checkout.
Under the traditional common-law mirror image rule, what is the usual effect of accepting an offer only if the seller changes a delivery term?Answer: The response is generally a counter-offer that rejects and replaces the original offer.
A person who knows of a reward offer performs the requested act. In a unilateral contract, what can that performance do?Answer: It can accept the offer without a separate advance notice of acceptance.
When can acceptance by post take effect under the postal rule?Answer: When post was contemplated as an acceptable method and the letter is properly posted.
Under U.S. UCC § 2-207, what may happen when a buyer and seller exchange forms with different terms but otherwise show a definite, seasonable acceptance?Answer: A contract may form despite the differing terms, with rules determining which terms apply.