What three things are required by the common law to constitute an offer?
- Intent of the offeror to be bound
- Specificity of persons empowered to accept
- Definiteness of the terms of the offer (all material terms)
What three type of terms are considered when evaluating the definiteness of an offer?
- Material terms
- Vague terms
- Missing terms
Which UCC section governs formation of contracts?
UCC Article 2-204
What is required under UCC Article 2-204 for the formation of a contract?
- Intent to be bound
- Specificity of the offeree
- A reasonably certain basis for providing an appropriate remedy
Which CISG Article governs contract formation?
CISG Article 14
What are the contract formation requirements under the CISG article 14?
- Intent to be bound
- Specificity of the offerees
- Sufficiently definite price and quantity
- A proposal is only an invitation to make an offer
How can an offer be terminated prior to acceptance under the common law?
4 methods
- Passage of time (conversation rule)
- Revocation by the offeror
- Rejection by the offeree
- Death or incapacity of a party
What is the conversation rule?
An offer made during a face-to-face or telephone conversation is deemed to have lapsed at the end of the conversation, absent a contrary intent of the offeror
What is required for an indirect revocation?
- A definite action by the offeror that is inconsistent with intent to contract with the original offeree
- The information provided must be reliable
When is rejection valid?
When received by the offeror.
What are the two effects of a counteroffer?
- Rejection of the original offer
- Serves as a new offer
How can termination be precluded under the common law?
- Option contract
- Reliance on a unilateral offer
How can termination be precluded under UCC Article 2-205?
A firm offer
What is required for a firm offer?
- A signed writing by a merchant
- States that it will be held open for a specific period of time (no greater than 3 mos.)
- If on a form supplied by the offeree, must be separately signed by the offeror
How can termination be precluded under the CISG Article 16?
- The offer indicates it is irrevocable
- The offeree reasonably relied on it being irrevocable
What is the “advertising rule”?
An advertisement is not generally considered an offer; it is construed as an invitation to make an offer to the seller on the terms stated, which the seller may then accept or reject.
What makes a term “material”?
- It is a necessary term, without which there is no contract
- It is an important term that affects the value of the bargain
