in class notes 3/5/25 busniess law

Understanding Offers and Acceptances

Course of Dealing and Acceptance

• In contractual law, a course of dealing between parties can imply acceptance without explicit communication, particularly if prior interactions establish expectations for acceptance.

• Example: Business people might have implicit understandings about how offers can be accepted based on their established dealings.

Affirmative Consent

• Consent must be affirmative, especially in sensitive contexts like relationships under New York State law.

• Affirmative consent can be communicated through:

  • Spoken words

  • Written communication

  • Conduct (but it must be clear and active, not passive or silent)

Key Components of a Valid Offer

1. Definite Terms

   • Offer must include clear terms regarding:

     • Subject matter (what is being offered)

     • Quantity (how much is being offered)

     • Identification of the offeree (who has the right to accept the offer)

2. Power of Acceptance

   • The offer should target an identified group or individual capable of accepting the offer.

   • Advertisements, unless specific to a group, do not constitute valid offers but rather invitations to negotiate.

Examples of Invalid Offers

• Typical advertisements generally do not specify a person or group as offerees, making them invalid as offers.

• An advertisement must clearly indicate who can accept for it to be a valid offer.

• Example: Grocery store signs stating prices (e.g., bananas) are generally considered invitations to negotiate, not offers.

Quantity and Limitations in Offers

• Offers often do not specify quantity in advertisements clearly:

  • Example: "Price per pound" may not limit a customer to buying only one pound.

  • Limits (e.g., "limit of three containers") can provide the necessary specificity for an offer.

  • A clear statement of quantity in any ad may validate it as an offer.

Communication of Offers

• Communication forms may include:

  • Written

  • Spoken

  • Conduct (but must indicate intent)

• Offers become effective upon receipt by the offeree, not when sent.

Revocation of Offer

• An offeror retains the right to revoke an offer prior to the offeree's acceptance:

  • Revocation must also be communicated effectively to be valid.

  • A revocation is effective when received by the offeree, not when it is sent.

Acceptance of Offer

1. Validity of Acceptance

   • Acceptance must mirror the offer in terms of definite terms (mirror image rule).

   • A valid acceptance occurs only if it matches the terms stated in the offer without modification.

2. Methods of Acceptance

   • Can be expressly articulated (in words, written or oral) or implied by conduct.

   • The offeror can specify the method of acceptance (e.g., must be in writing) or leave it open to any reasonable method.

Legal Significance of Rejection

• Rejection destroys the original offer, eliminating the offeree's ability to accept it.

• A counteroffer is legally considered a form of rejection, extinguishing the original offer:

  • Example: Changing the terms (like price or quality) in response changes the nature of the acceptance, leading to a counteroffer.

Conclusion

• Understanding the intricacies of offers, acceptances, and rejections is crucial in contract law. The nuances can impact the validity of agreements significantly.

• Effective communication, explicit terms, and the intention behind actions all play vital roles in establishing valid contracts.