Chapter 11-13 Outline

Article I. Offers
Offerer Gives te offeree the power of acceptance Offeree Acceptee to K formation because there is an
offer and an acceptance
Offers v Preliminary Negotiations
a) Language Define and certain v not define and certain
b) Objective Test Looks like the parties meant to enter a K v not
c) Communication Offer is communicated to the offeree v not
d) End Result K v Negotiation
Elements of an offer
a) Language must be definite and certain
i) (I offer, promise, will) v (Im considering, might, thinking about)
b) It must appear to a reasonable third party that the parties intended to enter a K
i) Objective Test Did it look like the parties meant to enter into a K?
ii) Lucy v Zehmer Offer written on napkin so there was a K and farm was sold
(1) Rule of intoxication Voids K but hard to prove
c) The offer must be communicated to the offeree
i) Usually communicated directly
ii) Large communicating medium Communication to the masses via media
(1) Exceptions: Limited Class of Offerees Limits the number of the power of acceptances
(a) First Come First Serve Limits the number of offerees to one
(b) Reward K Unilateral, only the person providing the info can collect the award
Terms and Conditions (specific promises)
a) C/L Price term how much the goods will cost to buy
i) Delivery term What time of delivery
ii) Quantity term How many willing to sell
iii) Warranty term How long is the guarantee
(1) Exceptions: Real estate contracts no specific terms that have to be in a contract except an
adequate description of the property so the price can be left out
b) U.C.C. Rule of quantity Must contain the term of quantity
i) Exception: Output Requirement Ks (I might require, might use, might produce)
ii) Rule of gap filling If no price n K, the court would fill the price in
(1) Vague Ks Under the UCC, if parties enter into a K and put in the term but are vague, the K s
not enforceable
Summary
a) The language must be definite and certain exception: Output Requirement K
b) It must appear to a reasonable third party that the parties intended to enter a K (Objective Test) exception:
gap filling
c) The offer must be communicated to the offeree If you put vague terms, court might find no K exists

After an offer
a) Lapse The offer was made and the offeree did nothing in response so the offer dies or lapses
i) Good for time agreed upon or a Reasonable Time which depends on what you are selling
(1) Rapidly changing market Offer is only good for a few minutes
ii) Offer will stay open through Option K which keeps the offer for the time stated
(1) Offeree pay for option K and offeree may not revoke but to hold open the offer for the time stated
b) Termination by operation of law The offer automatically dies because before acceptance offeree
(1) dies (Death)
(2) does insane (Insanity)
(3) what is being sold becomes illegal (Illegality)
c) Express Rejection Offeree expressively declines the offer therefore the offeree no longer has the power
of acceptance
i) Counter-offer (switching powers of acceptance) Offer then counter-offer then acceptance, rejection
or counter-offer
d) Revocation Offerer takes back the offer prior to acceptance so the original offer is killed
i) Three contracts that may not be revoked
(1) Unilateral Contracts If the offeree starts the act, the acceptance has begun
(2) Option Contracts Guaranteeing that the offer wont be revoked
(3) Merchants Firm Offers under U.C.C. Section 2-205 reasonable amount of time if not, stated
in terms
(a) Must be a K under the UCC for the sale of goods
(b) The offerer must be merchant
(c) The offere must promise in a signed writing to hold open the offer
(4) Acceptance
Article II. Acceptance (CL v UCC)
Mode How offer is conveyed or the form of acceptance
Rule UCC S2-207 & Mirror Image
UCC Any reasonable Mode
a) Rule UCC S2-207 Acceptance under the UCC depends on the parties to the transaction (Non-Merchants
v Merchants)
(1) Acceptance sent within a reasonable amount of time even though it states terms additional to or
different from those offered or agreed upon unless acceptance is conditional to additional or
different terms
(2) Additional terms are considered proposals unless the Merchants:
(a) Offer expressly limits acceptance to the offer
(b) Materially alter it
(c) Give notification of objections already or given the objections within a reasonable time when
received
i) Non-Merchants
(1) If offeree says I accept
(2) There is a K
(3) To the terms agreed upon
(a) Terms not agreed upon = proposal requiring further negotiation
(b) Unable to agree = Original terms of offer
(c) Conditional acceptance (Only If Rule) Only if in sentence then it becomes a counter offer
ii) Merchants One who normally deals in goods of that kind
(1) If offeree says I accept
(2) There is a K
(3) New terms are part of the K unless:
(a) New terms are part of the K
(b) New terms cause a significant economic change
(c) Offerer objects to new terms in a timely manner
b) Rule UCC S2-205 If terms are written gives assurance and it will be held open, is not revocable, for lack
of consideration during the time stated if not for a reasonable of time (max 3 months)
i) Form must be signed separately by offeree and offeror
Common Law Mirror Image Modes must match
a) Mirror Image Rule Acceptance encompasses all terms in the offer and must match