1. Mutual Assent- Offer and Acceptance
Chapter 10
Mutual Assent- Offer and Acceptance

2. Objective Theory of Contracts
What the party said when entering into the contract
How the party acted or appeared
The circumstances surrounding the transaction
As interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions.

3. Three Elements of an Offer
A serious, objective intent
The terms of the offer must be reasonably certain and definite so that the parties can ascertain the terms of the contract
The offer must be communicated to the offeree

4. Intention Concept of objective intent
Expressions of Opinion do NOT evidence an intent to enter into a binding agreement
Statements of Intention, or “thinking about” something, is not indicate intention.
Preliminary Negotiations/Invitations to Deal are NOT offers
Advertisements, Catalogs, Circulars are Invitations to Deal (exception if clear, definite promise with nothing left to negotiate OR Ads offering a Reward

5. Auctions - Offer of sale through an Auctioneer
With Reserve - A right to withdraw the goods. Seller does not have to accept the final bid. All auctions assumed “with reserve” unless stated otherwise
Without Reserve - Goods can’t be withdrawn and must be sold to highest bidder

6. Definiteness of Terms
Terms must be reasonably certain and unambiguous to allow the court to determine the parties intent.
However, missing terms may be filled in under the Code (open price, absence of date for payment; absence of specified place for delivery, time for performance)
Output and Requirement contracts do NOT fail for lack of definite terms

7. Output & Requirement Contracts
Output Contracts - Buyer agrees to purchase Seller’s entire output (e.g., Farmers Market agrees to buy ALL of the eggs Mr. Smith’s hens produce.
RequirementContracts Buyer agrees to purchase, and Seller agrees to sell, all that the Buyer needs or requires (e.g., Pizza Store agrees to buy all the soda products it needs from Coca-Cola)

8. Communication
A person must know about an offer in order to accept an offer.
Generally, a failure to reply (silence) will not be an acceptance of an offer (UNLESS, prior dealings, OR silence which is evidence of a positive and unequivocal acceptance)
Unordered merchandise is not deemed accepted (unless it was solicited)

9. Duration Of Offers Lapse of Time
Revocation - Offer can be revoked anytime before acceptance, even if there is a promise to keep it open (except option K’s; Firm offers
Rejection
Counteroffer
Death/incompetency of offeror or offeree
Subsequent illegality of the contract
Destruction of Subject Matter

10. Mail Box Rule
Acceptances are Valid upon Dispatch (unless the offeree states otherwise or the offeree uses an unauthorized means of communication)

11. Firm Offer Must be made by a Merchant
Merchant agrees not to revoke offer for a stated period of time
Must be a SIGNED WRITING