Understanding Contract Law: The Role of Acceptance in Creating a Binding Agreement, Slides of Commercial Law

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THE AGREEMENT:

ACCEPTANCE

T. LEIGH ANENSON, J.D., LL.M.

“Make your bargain before beginning to plow.” -- Arab proverb

CONTRACT LAW

• Introduction to

Contracts

• The Agreement: Offer

• The Agreement:

Acceptance

• Consideration

• Reality of Consent

• Capacity to Contract

• Illegality

• Writing

• Rights of Third Parties

• Performance &

Remedies

Learning Objectives

• Definition

• Basics of Acceptance

– Intent

– Same Terms

– Communication

• “Manifestation of assent to the terms [of

the offer] made by the offeree in the

manner invited or required by the offer.”

• only offeree may accept offer
• offeror may specify manner of accepting offer

i.e. “notify of your acceptance in writing”

Definition of Acceptance

#1 INTENT

• SAME INTENT AS OFFER

• OBJECTIVE (NOT SUBJECTIVE)

• SPECHT VS. NETSCAPE COMMUNICATIONS CORP.

#2 SAME TERMS

• “MIRROR IMAGE” RULE

(SOME COURTS – ONLY MATERIAL DIFFERENCES)

• INQUIRIES AND GRUMBLING ACCEPTANCES

STILL VALID

• UCC BATTLE OF THE FORMS

UNION CARBIDE CORP. V. OSCAR MAYER

UCC: BATTLE OF THE FORMS

1) Is there an acceptance?

• GENERAL RULE: YES

• EXCEPTION: offeree document specifies that offeror must agree to new terms unless parties act like there is a contract

2) What are the terms?

DEPENDS ON IF MERCHANT OR NOT

• MERCHANT : ADDITIONAL TERMS BECOME PART OF AGREEMENT

UNLESS …

– OFFEROR LIMITED ACCEPTANCE TO ITS TERMS

– ADDITIONAL TERMS ARE MATERIALLY DIFFERENT FROM OFFER

– OFFEROR OBJECTS IN REASONABLE TIME

• NON-MERCHANT : TERMS WHICH PARTIES AGREE AND UCC SUPPLEMENTAL TERMS