What Is an Offer?—Its Legal Effect Definition - Black's Law Dictionary

1. To bring to or before; to present for acceptance or rejection; to hold out or proffer; to make a proposal to; to exhibit something that may be taken or received or not. Morrison v. Springer, 15 Iowa, 340; Vincent v. Woodland Oil Co., 105 Pa. 402, 30 Atl. 991; People v. Ah Fook, 62 Cal. 494.

THE RESTATEMENT (SECOND) OF CONTRACTS - (copyright by the American Law Institute (1981))

§24. OFFER DEFINED

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.

WHY DO WE CARE?

1. Offer Invites Acceptance

2. Offer + Acceptance = Agreement

When is an Offer not an Offer? Expressions of Opinion and Predictions

Opinions of Professionals “That hand will be good as new.” Tort vs. Breach of Contract?

Hawkins v. McGee, 84 N.H.114 (1929)

Intentions, Hopes, and Estimates

“I wish I could get $5,000 for my old boat.”

“This Saturday at the Galleria Mall, a sale of $250,000 worth of cars”

“I, Tom Hanks, intend to be in this director’s next film.”

“Your pipes burst, I estimate this is going to cost about $2,000 to repair.”

When is an Offer not an Offer? Inquiry or Invitation to Make an Offer

Will you sell me your car for $2,500?

How much would it take for you to sell me your car?

Owen v. Tunison, 131 Me. 42 (1932)

Advertisements, Catalogs and Circular Letters

Issues of quantity, commitment.

To whom is advertisement directed?

“Today only, men’s coats, regularly $699.99, today just $499.99"

“Only 6 available”

“First come, first served”

When is an Offer not an Offer? Auction Sales

Who Makes the Offer?

“Do I hear $50?”

“With reserve” vs. “Without Reserve”

UCC § 2-328. Sale by Auction.

(1) In a sale by auction if goods are put up in lots, each lot is the subject of a separate sale.

(2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

When is an Offer not an Offer? (3) Such a sale is with reserve unless the goods are in

explicit terms put up without reserve. In an auction with reserve the auctioneer may withdraw the goods at any time until he announces completion of the sale. In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. In either case a bidder may retract his bid until the auctioneer's announcement of completion of the sale, but a bidder's retraction does not revive any previous bid.

(4) If the auctioneer knowingly receives a bid on the seller's behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.

Price Quotations Offer vs. Invitation to others to make an offer

Magic words? Specificity Goods

Fairmount Glass Works v. Crunden-Martin Woodenware, 106 Ky. 659, 51 S.W. 196 (1899)

Real Property Uniqueness of Real Property

Mellen v. Johnson, 322 Mass 236, 76 N.E. 2d 658 (1948)

Offer vs. Preliminary Negotiations Preliminaries

Opinion Intent Hope Estimate Inquiry Invitation to make offer Advertisements Catalogs Circulars Invitations to bid Price quotes

When is a Communication Actually an Offer? Objective theory - Whether a reasonable person in the

position of plaintiff would conclude that the defendant had made a commitment.

Factors to consider:

1.Initial inquiry vs. response to inquiry 2.What words were used? 3.How detailed are the terms? 4.Selective communication vs. general invite 5.Real Property vs. goods 6.Relationship between the parties 7.Surrounding circumstances 8.Custom of the trade/prior practices of the parties

Other Matters Relating To Mutual Assent Questions of Law and Fact

What’s the difference? Who determines?

Intent to Memorialize & Duplicate Originals

Written contract - Formality or essential step?

Intent of the parties - How determined?

“Binding until such time as a formal agreement shall be executed”

“No agreement until all parties shall have executed”

Absence of intent

Execution vs. Delivery

Indefiniteness - Does lack of specificity mean there is no contract? All indefiniteness is not created equal - Material Terms vs.

Immaterial Terms

Materials terms: Subject matter Price Duration Payment terms Quantity Quality

3 types of Indefiniteness: 1.Parties purport to agree on a material term but leave it

indefinite 2.Parties are silent as to a material terms 3.Parties agree to agree later as to a material term

Indefinite Terms at Common Law Indefinite Purported Agreement - Cures/Relief for

Indefiniteness

1. Quantum Meruit 2. Conduct of the parties 3. Agreement

“The law leans against the destruction of contracts because of uncertainty.”

Silence as to a Material Term

1. Implied from surrounding circumstances 2. Court supplied gap fillers 3. Standard terms, trade custom, local usage

Duration Problems At will employment agreements

Agreements to Agree or Negotiate

Material term - no formation of contract Duty to negotiate in good faith “Reasonable” substitution

The Uniform Commercial Code (UCC)

“Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.”

UCC 2-204(3)

Unilateral, Bilateral, and Reverse Unilateral Contracts The Classical Approach

Presumption that agreements are bilateral

The UCC

§ 2-206. Offer and Acceptance in Formation of Contract.

(1) Unless otherwise unambiguously indicated by the language or circumstances

(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

(2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

Restatement (Second) §30. FORM OF ACCEPTANCE INVITED

(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.

§32. INVITATION OF PROMISE OR PERFORMANCE

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.