Mutual Assent · Sep 14
Floor. ~40 min: R2d § 24 + Lefkowitz. The doctrine the next class assumes you have covered.
Target. ~75 min: Floor + Leonard + R2d § 26 + synthesis.
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
R2d § 24: an offer is a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
Two scenarios:
A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
R2d § 26: an expression is not an offer if the person addressed knows or has reason to know that the speaker does not intend to be bound until a further manifestation of assent.
So a price quotation, an invitation to bid, or "would you sell?" opens a conversation — it does not hand the other side a power of acceptance.
Why don't sellers want every signal to be a binding offer? Because they need room to negotiate, to check inventory, to choose a counterparty.
(1) Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
(2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
(3) The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
251 Minn. 188, 86 N.W.2d 689 (1957)
Supreme Court of Minnesota
Rule. An advertisement is an offer when it is clear, definite, and explicit, and leaves nothing open for negotiation. A seller cannot impose new conditions of acceptance after the offer has been accepted by performance.
88 F. Supp. 2d 116 (S.D.N.Y. 1999), aff'd, 210 F.3d 88 (2d Cir. 2000)
United States District Court for the Southern District of New York
Rule. An advertisement does not constitute an offer where no objective, reasonable person could understand it to be a serious expression of willingness to enter a bargain. Obvious humor, exaggeration, and commercial context can defeat any reasonable inference of an offer.
Two recurring fact patterns sit on the offer line:
144 Ill. 2d 24, 578 N.E.2d 981 (1991)
Supreme Court of Illinois
Facts. A publisher agreed to publish an anthology of John Cheever's short stories, but the agreement fixed no number of stories or pages, no deadline, no criteria for an acceptable manuscript, no publication date, no price, and no term of publication.
Holding. Not sufficiently definite to be an enforceable contract. Even where the parties manifested an intent to contract, the agreement's essential terms were too uncertain, and the court would not rewrite the deal by supplying them.
Rule. An offer must be so definite as to its material terms that the promises and performances of each party are reasonably certain (R2d § 33). Courts may imply a missing term only where a standard for reasonable implication exists; where the subject matter itself was never decided, the contract fails.
Padilla was hired by RRA, a personnel agency. He claimed an oral side-agreement with RRA's vice president: Padilla would earn a commission of "between 1% and 10%" on contracts he procured, with the exact rate to be negotiated later depending on profit margin. Padilla brought in two contracts worth $655,200; RRA paid him a $750 finder's fee. Padilla sued.
Is "1% to 10%, to be negotiated" sufficiently definite to be enforceable under R2d § 33?
Same Pepsi commercial. Vary one fact: instead of a Harrier jet at 7,000,000 points, the commercial shows a Pepsi-branded mountain bike at 7,000 points. Leonard tenders the points. Pepsi refuses, claiming the commercial was puffery.
*Is the result the same as in Leonard v. Pepsico?*
Stretch problems from the chapter.
Rules. R2d § 24, R2d § 26, R2d § 33.
Cases. Lefkowitz v. Great Minneapolis Surplus Store · Leonard v. Pepsico.
Open question. R2d §§ 24, 26, 33 tell us when an offer exists. They do not tell us how long it lives. Class 7 takes up termination: revocation, rejection, counter-offer, lapse. Smaligo anchors the question of when an offer dies before acceptance closes it.
Next class: Termination of the Offer
_Mutual Assent_ · Sep 17
Read Smaligo v. Fireman's Fund Insurance and R2d §§ 36, 42, 43. An offer can die four ways: revocation, rejection, counter-offer, lapse. Bring a one-sentence answer for each: what is the moment of death, and who controls the timing?