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Must the offeror expressly revoke his offer to offeree in order for the revocation to be valid?
No, any act that is inconsistent with the offer is sufficient to revoke, as (and as soon) as the offeree knows about it.
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Under the modern view, may an offeror revoke his offer under a unilateral contract once the offeree has begun to perform?
No. Second Restatement section 45 - an offer to enter into a unilateral contract becomes irrevocable once the offeree begins to perform.
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What is an option?
Offer made irrevocable by consideration. It creates a property right in theofferee, which means that without a provision otherwise, the offeree can sell or transfer this power of acceptance to someone else, enabling him to accept the original offer.
When the option expires, the offer is not automatically revoked, instead the offeror get the right to revoke back.
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What does UCC section 2-205 state?
"Firm Offer" - An offer can be irrevocable i the absence of consideration as long as the offeror is a merchant, the transaction concerns the sale of goods, and the assurance not to revoke is embodied in a "signed writing".
Maximum length of a "firm offer" is three months, if offer states longer, it is still only valid for three months.
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Does the UCC make offers binding without consideration?
Not generally.
Exception: Firm Offer
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What is the definition of a merchant under the UCC?
One experienced in dealing with the type of goods involved in the transaction.
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Under the UCC, may a non-merchant make an offer irrevocable in the absence of consideration?
No. UCC only allows merchants as offerors to enter into firm offers.
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There are three means of acceptance under the UCC, what are they?
UCC section 2-206:
Buyer can:
1) After a reasonable opportunity to inspect, manifest to seller that goods conform or are acceptable in spite of non-conformance;
2) Fail to reject within a reasonable time; or
3) Act inconsistently with seller's ownership.
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If posted properly, by acceptable means, when is an acceptance effective?
The moment it is posted. Mailbox rule.
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What are the rules when an offeree both accepts and rejects the offer?
Whether a contract exists depends on two things:
1) Which was mailed first - the acceptance or rejection.
2) Which was received first.
1) Rejection sent, then acceptance sent, then rejection received, then acceptance received. No contract; The Acceptance constitutes a counter-offer.
2) Rejection sent, then acceptance sent, then acceptance received, then rejection received. Contract.
3) Acceptance sent, then rejection sent, then rejection received, then acceptance received. Courts are split. Some courts follow the offeror's expectations, and since the rejection was received first, that means no contract. Other courts say there is a contract, unless the offeror relied on the rejction before receiving the acceptance.
4) Acceptance sent, then rejection sent, then acceptance received, then rejection received. There is a contract.
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A contract contains ambiguities. In whose favor will courts construe the ambiguities, the offeror or offeree?
The offerees, since the offeror created the terms and had more control over them.
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What supplies the "quantity" term in requirements and output contracts?
Objective and extrinsic facts.
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What is a requirements contract?
A buyer agrees to buy all he needs of a stated item, for a stated period of time, from the seller.
Quantities must remain within the reasonable anticipation of the parties for the contract to be enforceable.
UCC section 2-306 - Either business can terminate operations, by retiring or selling the business, as long as it's done in good faith.
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What is an output contract?
A seller agrees to sell all he produces of a stated item, for a stated period of time, to the buyer.
Quantities must remain within the reasonable anticipation of the parties for the contract to be enforceable.
UCC section 2-306 - Either business can terminate operations, by retiring or selling the business, as long as it's done in good faith.
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