Offer and Acceptance in Contract Law

Contract Law: Acceptance by Performance

This document discusses contract law principles, particularly focusing on acceptance by performance, utilizing the example of a roofing contract and case law from EverType Roofing.

Overview of the Example Scenario

An owner writes to Robert Roofer stating that the roof of his barn was damaged in the recent storm and offers to pay $2,000 for repairs to be completed by the end of the week. This scenario exemplifies acceptance by performance, where the roofer's commencement of work signifies acceptance of the offer.

Key Components of the Offer

  • Acceptance by Performance: The owner explicitly asks for the repair to be performed, thus establishing that the offer is contingent upon Robert commencing the roofing work.

  • Binding Agreement: The proposition states that the agreement becomes binding upon either written acceptance or upon the commencement of performance.

Analyzing Statements about the Offer

  1. Owner's Offer is Irrevocable: Incorrect. The offer is acceptable by performance, creating a contract once commencement occurs.

  2. Roofer's Liability: Incorrect. The roofer is bound to the contract once the offer is accepted through performance.

  3. Correct Answer: A binding contract has been formed through acceptance by performance.

Court Case: EverType Roofing

Definition of Reasonable Time

In discussing the case of EverType Roofing, the concept of reasonable time is crucial. The court rules that acceptance of an offer terminates either at the time specified in the offer or, lacking a specified time, at the end of a reasonable time. The determination of reasonable time is fact-dependent, influenced by the nature of the contract.

  • Case Citation: The court's definition stems from the Restatement of the Law of Contracts.

  • Implication of Time: Two weeks is an emphasis on assessing the facts and circumstances, without a definitive rule.

Irrelevance of Factors to Reasonable Time

Certain factors should not impact the definition of reasonable time, such as:

  • Time needed for financing.

  • Travel time from the plaintiff's business to the roof.

  • The focus should remain on contract nature, and relevant industry standards.

Offer and Acceptance

Basics of Contract Formation

The class centers on offer and acceptance principles, specifically acceptance via performance. The case Lefkowitz v. Great Minneapolis Surplus Store underscores the differentiation between an offer and an invitation to negotiate.

  • Revocation of Offer: An offeror can revoke the offer if the revocation happens before the offeree accepts it.

  • Completion of Contract: Once the offer is accepted, the offeror cannot revoke without incurring liability for breach.

Determining Acceptance

  • Manifestation of Assent: Acceptance must be evident via actions such as taking a handshake or signing a contract, measured by the objective theory of contracts, which assesses reasonable person conduct.

  • Contract Language in EverType: Indicates acceptance can be in writing or by performance, showcasing flexibility in contract terms and creating options for the offeror.

Commencement of Performance in Evertype

Definition and Circumstances of Performance

The court reviews whether simply loading a truck and traveling to the job site constitutes performance. Here, it ruled that actual performance began when the roofing company loaded the necessary materials and transported them.

  • Commencement being Substantial: The roofer's argument was that engagement of resources (workers, vehicles) was sufficient to signify acceptance.

Defendants' Retraction

The homeowner claimed the roofer’s actions fell short of performance until arrival at the site, a position with which the court disagreed. Any attempt to revoke after trucking out was determined to be too late, solidifying the formation of a contract before any notice to dissent was possible.

Reasonable Time Determination

Court's Deliberation

The court addresses the homeowner's claim of lack of specificity regarding acceptance time. The standard legal rule is that an offer may be retracted before acceptance occurs unless

  • There are exceptional circumstances leading to the agreement.

  • Acceptance of the offer is determined to remain valid until a reasonable timeframe is established.

  • Inference of Reasonable Time: The court decided no specific acceptance timeframe implies a reasonable time should be provided based on the context and intentions of the contracting entities.

  • Objective Theory Application: The determination of reasonable time relies on what a reasonable person would validate in the agreement context, encompassing usage and standard practice in roofing or similar businesses.

In conclusion, this content thoroughly implicates contract formation principles particularly focusing on acceptance by performance along with impact and application of reasonable time in contract definitions as seen through the case of EverType Roofing.