1. 11-1 Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

2. 11-2 3 Introduction to Contracts The Agreement: Offer The Agreement: Acceptance Consideration Reality of Consent Contracts P A R T

3. 11-3 3 Capacity to Contract Illegality Writing Rights of Third Parties Performance and Remedies Contracts P A R T

4. 11-4 The Agreement: Acceptance PA E TR HC 11 Make your bargain before beginning to plow. Arab proverb

5. 11-5 Learning Objectives Explain elements of acceptance under common law and the UCC Determine how acceptance can be communicated, including by silence Determine when oral acceptance is effective

6. 11-6 Acceptance must be by clear expression by offeree of intent to be bound by terms of offer and communicated to offeror –Only offeree may accept offer –If offer calls for performance, then performance is acceptance –Offeror may specify manner of acceptance Example: “notify of acceptance in writing” Requirements for Acceptance

7. 11-7 Traditional contract law rule required acceptance to be the mirror image of the offer –Example: Pride v. LewisPride v. Lewis Currently, judges hold that only material variances between an offer and an alleged acceptance result in an implied rejection of the offer Mirror Image Rule

8. 11-8 UCC 2–207 allows contract formation even when there is some variance between terms of offer and terms of acceptance –A definite and timely expression of acceptance creates a contract, even if it includes terms different from those stated in offer or if it states additional terms offer did not address [2–207(1)] –Belden v. American Electric Components, Inc.Belden v. American Electric Components, Inc. The UCC & Variance of Terms

9. 11-9

10. 11-10 With instantaneous forms of communication, knowing when acceptance occurs is easy –Non-instantaneous forms (postal mail) more difficult Mailbox rule makes acceptance effective upon dispatch when the offeree used a manner of communication expressly or impliedly authorized (invited) by the offeror Okosa v. Hall illustrates operation of the ruleOkosa v. Hall Communicating Acceptance

11. 11-11 Courts today allow communication of acceptance by any reasonable means of communication Communicating Acceptance

12. 11-12 General rule is that an offeree’s silence, without more, is not an acceptance Circumstances may impose duty on offeree to reject offer affirmatively or be bound Includes cases in which offeree’s silence objectively indicates an intent to accept –Example: McGurn v. Bell Microproducts, Inc. Silence as Acceptance

13. 11-13 OFFER + ACCEPTANCE AGREEMENT Effect of Acceptance

14. 11-14 Thought Questions Do you read clickwrap agreements when purchasing goods through a website? Should you be bound by click agreements if purchasing via the internet?