Chapter 12: The Agreement – Offers & Acceptance

Vocabulary flashcards covering contract formation, offer rules, termination methods, acceptance standards, UCC variations, and online contract wrap types.

Offeror

The person making the offer in a contract negotiation.

Offeree

The person receiving the offer in a contract negotiation.

Objective Standard

The legal standard where courts evaluate what a reasonable person would understand from a party's words and actions, rather than what that person secretly intended.

Two-Part Offer Test

A test to determine whether a statement qualifies as an offer by asking: 1. Intent (does the person genuinely intend to make a deal?) and 2. Definiteness (are the important terms clear enough?).

Invitation to Bargain

A statement that starts negotiations rather than creating an offer (e.g., asking "Would you consider selling your car?").

Price Quote

A communication that provides pricing information, usually without a commitment, and does not constitute an offer.

Letter of Intent

A document that summarizes negotiations between parties; it is usually not an offer and usually not binding unless it clearly shows an intention to be legally bound.

Advertisement (Contract Law)

A public notice that generally does not constitute an offer and usually invites customers to make offers, unless it clearly promises a specific reward for specific performance.

Auction With Reserve

The default auction format where a minimum price exists, allowing the seller to withdraw the item if the reserved price is not met.

Auction Without Reserve

An auction format with no minimum price, meaning that once the first bid is made, the seller must sell the item to the highest bidder.

UCC Gap-Fillers

Provisions under the Uniform Commercial Code that fill in missing terms (such as an open price) if a sales contract is formed with open details.

Output Contract

A contract under which a seller agrees to sell all of its production to one buyer, subject to the rule of good faith.

Requirements Contract

A contract under which a buyer agrees to purchase all of its needs from one seller, subject to the rule of good faith.

Good Faith Rule

A legal rule requiring that quantities in output and requirements contracts must be reasonable and cannot be wildly different from past dealings or reasonable estimates.

Revocation

The act of an offeror taking back an offer before acceptance, which becomes effective once received by the offeree.

Counteroffer

A response proposing different terms to an offer, which acts as a rejection of the original offer and creates a new offer.

Option Contract

An agreement in which the offeree gives something of value (consideration) to keep an offer open for a set period of time, preventing the offeror from revoking it.

Firm Offer

A UCC-exclusive rule under which a merchant signs a written promise to keep an offer to buy or sell goods open, which is irrevocable for that period even without consideration.

Mirror Image Rule

A common law rule requiring that an acceptance match the offer's terms exactly; altering any term constitutes a counteroffer rather than an acceptance.

Battle of the Forms

A UCC rule for sales of goods allowing a contract to form even if an acceptance includes additional or different terms from the original offer.

Knockout Rule

A UCC rule where conflicting ("different") terms in an offer and acceptance cancel each other out and may be replaced by UCC gap-fillers.

Shrinkwrap Agreement

A contract format where terms come packaged with software or physical products (e.g., inside the box) and installation or use constitutes acceptance; enforceability depends on notice and circumstances.

Clickwrap Agreement

An online agreement where the user must actively click "I Agree" before proceeding; generally legally enforceable, even if unread.

Browsewrap Agreement

An online agreement where terms are merely linked on a webpage without requiring a click; often unenforceable unless the user had adequate notice or actual knowledge.

Hybridwrap Agreement

An online agreement where terms are linked near an action button (such as "Place Order"); often enforceable if the notice is clear and placed close to the button.

Method of Acceptance

The medium or manner by which an acceptance is communicated, such as mail, email, or telephone.

Manner of Acceptance

The way acceptance is shown or expressed, such as through a promise, action, or payment.

Mailbox Rule

A rule governing contractual timing providing that an acceptance is effective when sent (dispatched), whereas a revocation or termination is only effective when received.