Offer life-cycle
Mutual Assent · Sep 23
Floor. ~40 min: Smaligo callback + R2d § 36 termination map + the firm-offer exits (§§ 45, 87, UCC § 2-205).
Target. ~75 min: Floor + counter-offer (§ 39) + mailbox-rule setup (§ 63) + Flender and State DOT previews on UCC § 2-207.
(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
(1) An offer is binding as an option contract if it
(a) is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
(b) is made irrevocable by statute.
(2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.
An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.
An offer is freely revocable until accepted — unless one of these holds it open:
432 Pa. 133, 247 A.2d 577 (1968)
Supreme Court of Pennsylvania
Rule. An offer is rejected by conduct inconsistent with acceptance. Demanding arbitration after an offer of settlement amounts to a rejection because it is inconsistent with the conclusion that the offer has been accepted.
R2d § 39. (1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
(2) An offeree's power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.
Unless the offer provides otherwise,
(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror; but
(b) an acceptance under an option contract is not operative until received by the offeror.
R2d § 63(a): an acceptance made in a manner invited by the offer is operative as soon as put out of the offeree's possession — on dispatch — whether or not it ever reaches the offeror.
But revocations, rejections, and counter-offers are effective only on receipt.
So if an offeree mails an acceptance before a revocation arrives, a contract has formed — the later revocation is a nullity. The rule does not apply to option contracts (acceptance there is effective only on receipt).
830 A.2d 1279 (Pa. Super. Ct. 2003)
Pennsylvania Superior Court
Rule. Under UCC § 2-207, when an offer and acceptance contain conflicting terms on the same subject, both conflicting terms drop out and default rules supply the gap. Forum-selection clauses that disagree are knocked out; jurisdiction is governed by background law.
674 A.2d 1239 (R.I. 1996)
Supreme Court of Rhode Island
Rule. An acceptance is not rendered counter-offer by terms that are immaterial or that the offer itself permits. Changes that do not alter the substance of the bargain or impose new burdens on the offeror leave acceptance effective.
Washington State prisoners filed a class action over conditions of confinement. On the eve of trial, the State and the prisoners settled. A proposed consent decree set a March 1, 1983 deadline for population reduction. The State noticed an error and submitted a revised decree on February 13, 1981 with an April 1, 1983 deadline. The prisoners moved to approve the original (March 1) decree; the State moved to modify to April 1. Both motions were denied for lack of meeting of the minds. On May 15, the prisoners filed a notice accepting the February 13 offer (April 1).
Did the prisoners reject the State's April 1 offer when they moved to approve the March 1 decree? Did they accept it on May 15?
BMW sent Mini Works a cease-and-desist with three requests, ending: "Countersign and return the acknowledgment on page 4 of this letter, by June 21, 2007.… We look forward to your response by June 21." On July 3, 2007, Mini Works signed and returned. BMW later sued to enforce; Mini Works argued the offer had lapsed.
Did BMW's offer lapse on June 21?
Stretch problems from the chapter.
Rules. R2d §§ 39, 45, 87, 63 · UCC § 2-205 (firm offer), § 2-207 (battle of the forms, setup).
Cases. Smaligo (callback) · Flender Corp. v. Tippins International (knockout preview) · State Department of Transportation v. Providence & Worcester Railroad Co. (immaterial-variation preview).
Open question. Today closed the termination map and located the irrevocability doctrines, then crossed into acceptance. Class 9 takes up acceptance in full — what counts as an acceptance (§ 50), the mirror-image rule and its UCC override (§ 2-207), and the mailbox rule applied to an acceptance-then-rejection sequence.
Next class: Acceptance
_Mutual Assent_ · Sep 24
Read Flender Corp. v. Tippins International and State DOT v. Providence & Worcester Railroad. Both are UCC § 2-207 cases; same statute, opposite results. Bring one sentence: what feature of each fact pattern decides the case?