USA
17 Requirement of a Bargain
1. Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
2. Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated in §§ 82-94.
18 Manifestation of Mutual Assent
Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.
19 Conduct as Manifestation of Assent
1. The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act.
2. The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents.
3. The conduct of a party may manifest assent even though he does not in fact assent. In such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating cause.
20 Effect of Misunderstanding
1. There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
- neither party knows or has reason to know the meaning attached by the other; or
- each party knows or each party has reason to know the meaning attached by the other.
2. The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
- that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or
- that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party.
22 Mode of Assent: Offer and Acceptance
1. The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties.
2. A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined.
23 Necessity That Manifestations Have Reference to Each Other
It is essential to a bargain that each party manifest assent with reference to the manifestation of the other.
24 Offer Defined
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
25 Option Contracts
An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer.
26 Preliminary Negotiations
A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
28 Auctions
1. At an auction, unless a contrary intention is manifested,
- the auctioneer invites offers from successive bidders which he may accept or reject;
- when goods are put up without reserve, the auctioneer makes an offer to sell at any price bid by the highest bidder, and after the auctioneer calls for bids the goods cannot be withdrawn unless no bid is made within a reasonable time;
- whether or not the auction is without reserve, a bidder may withdraw his bid until the auctioneer's announcement of completion of the sale, but a bidder's retraction does not revive any previous bid.
2. Unless a contrary intention is manifested, bids at an auction embody terms made known by advertisement, posting or other publication of which bidders are or should be aware, as modified by any announcement made by the auctioneer when the goods are put up.
29 To Whom an Offer is Addressed
1. The manifested intention of the offeror determines the person or persons in whom is created a power of acceptance.
2. An offer may create a power of acceptance in a specified person or in one or more of a specified group or class of persons, acting separately or together, or in anyone or everyone who makes a specified promise or renders a specified performance.
30 Form of Acceptance Invited
1. An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance.
2. Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.
31 Offer Proposing a Single Contract or a Number of Contracts
An offer may propose the formation of a single contract by a single acceptance or the formation of a number of contracts by successive acceptances from time to time.
32 Invitation of Promise or Performance
In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.
CHAPTER 3 TOPIC 4: DURATION OF THE OFFEREE'S POWER OF ACCEPTANCE
35 The Offeree's Power of Acceptance
1. An offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer.
2. A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the ways listed in § 36.
36 Methods of Termination of the Power of Acceptance
1. An offeree's power of acceptance may be terminated by
- rejection or counter-offer by the offeree, or
- lapse of time, or
- revocation by the offeror, or
- death or incapacity of the offeror or offeree.
- the offeree exercises reasonable diligence to notify the offeror of acceptance, or
- the offeror learns of the performance within a reasonable time, or
- the offer indicates that notification of acceptance is not required.
- an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror; but
- an acceptance under an option contract is not operative until received by the offeror.
- Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
- Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
- Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
- it is in writing and sealed; and
- the document containing the promise is delivered; and
- the promisor and promisee are named in the document or so described as to be capable of identification when it is delivered.
- be expressed in a document signed or otherwise assented to by the promisor and delivered; or
- be expressed in a writing or writings to which both promisor and promisee manifest assent.
2. In addition, an offeree's power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.
37 Termination of Power of Acceptance Under Option Contract
Notwithstanding §§ 38-49, the power of acceptance under an option contract is not terminated by rejection or counter-offer, by revocation, or by death or incapacity of the offeror, unless the requirements are met for the discharge of a contractual duty.
38 Rejection
1. An offeree's power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
2. A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.
39 Counter-Offers
1. A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
2. An offeree's power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.
40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance
Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until received by the offeror, but limits the power so that a letter or telegram of acceptance started after the sending of an otherwise effective rejection or counter- offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer.
41 Lapse of Time
1. An offeree's power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
2. What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made.
3. Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in § 49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.
42 Revocation by Communication From Offeror Received by Offeree
An offeree's power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.
43 Indirect Communication of Revocation
An offeree's power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.
44 Effect of Deposit on Revocability of Offer
An offeror's power of revocation is not limited by the deposit of money or other property to be forfeited in the event of revocation, but the deposit may be forfeited to the extent that it is not a penalty.
45 Option Contract Created by Part Performance or Tender
1. Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
2. The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
46 Revocation of General Offer
Where an offer is made by advertisement in a newspaper or other general notification to the public or to a number of persons whose identity is unknown to the offeror, the offeree's power of acceptance is terminated when a notice of termination is given publicity by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available.
47 Revocation of Divisible Offer
An offer contemplating a series of independent contracts by separate acceptances may be effectively revoked so as to terminate the power to create future contracts, though one or more of the proposed contracts have already been formed by the offeree's acceptance.
48 Death or Incapacity of Offeror or Offeree
An offeree's power of acceptance is terminated when the offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract.
49 Effect of Delay in Communication of Offer
If communication of an offer to the offeree is delayed, the period within which a contract can be created by acceptance is not thereby extended if the offeree knows or has reason to know of the delay, though it is due to the fault of the offeror; but if the delay is due to the fault of the offeror or to the means of transmission adopted by him, and the offeree neither knows nor has reason to know that there has been delay, a contract can be created by acceptance within the period which would have been permissible if the offer had been dispatched at the time that its arrival seems to indicate.
CHAPTER 3 TOPIC 5: ACCEPTANCE OF OFFERS
50 Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise
1. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
2. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise.
3. Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.
51 Effect of Part Performance Without Knowledge of Offer
Unless the offeror manifests a contrary intention, an offeree who learns of an offer after he has rendered part of the performance requested by the offer may accept by completing the requested performance.
52 Who May Accept an Offer
An offer can be accepted only by a person whom it invites to furnish the consideration.
53 Acceptance by Performance; Manifestation of Intention Not to Accept
1. An offer can be accepted by the rendering of a performance only if the offer invites such an acceptance.
2. Except as stated in § 69, the rendering of a performance does not constitute an acceptance if within a reasonable time the offeree exercises reasonable diligence to notify the offeror of non-acceptance.
3. Where an offer of a promise invites acceptance by performance and does not invite a promissory acceptance, the rendering of the invited performance does not constitute an acceptance if before the offeror performs his promise the offeree manifests an intention not to accept.
54 Acceptance by Performance; Necessity of Notification to Offeror
1. Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a notification.
2. If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless
55 Acceptance of Non-Promissory Offers
Acceptance by promise may create a contract in which the offeror's performance is completed when the offeree's promise is made.
56 Acceptance by Promise; Necessity of Notification to Offeror
Except as stated in § 69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably.
57 Effect of Equivocal Acceptance
Where notification is essential to acceptance by promise, the offeror is not bound by an acceptance in equivocal terms unless he reasonably understands it as an acceptance.
58 Necessity of Acceptance Complying with Terms of Offer
An acceptance must comply with the requirements of the offer as to the promise to be made or the performance to be rendered.
59 Purported Acceptance Which Adds Qualifications
A reply to an offer which purports to accept it but is conditional on the offeror's assent to terms additional to or different from those offered is not an acceptance but is a counter- offer.
60 Acceptance of Offer Which States Place, Time or Manner of Acceptance
If an offer prescribes the place, time or manner of acceptance its terms in this respect must be complied with in order to create a contract. If an offer merely suggests a permitted place, time or manner of acceptance, another method of acceptance is not precluded.
61 Acceptance Which Requests Change of Terms
An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.
62 Effect of Performance by Offeree Where Offer Invites Either Performance or Promise
1. Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.
2. Such an acceptance operates as a promise to render complete performance.
63 Time When Acceptance Takes Effect
Unless the offer provides otherwise,
64 Acceptance by Telephone or Teletype
Acceptance given by telephone or other medium of substantially instantaneous two-way communication is governed by the principles applicable to acceptances where the parties are in the presence of each other.
65 Reasonableness of Medium of Acceptance
Unless circumstances known to the offeree indicate otherwise, a medium of acceptance is reasonable if it is the one used by the offeror or one customary in similar transactions at the time and place the offer is received.
66 Acceptance Must Be Properly Dispatched
An acceptance sent by mail or otherwise from a distance is not operative when dispatched, unless it is properly addressed and such other precautions taken as are ordinarily observed to insure safe transmission of similar messages.
67 Effect of Receipt of Acceptance Improperly Dispatched
Where an acceptance is seasonably dispatched but the offeree uses means of transmission not invited by the offer or fails to exercise reasonable diligence to insure safe transmission, it is treated as operative upon dispatch if received within the time in which a properly dispatched acceptance would normally have arrived.
68 What Constitutes Receipt of Revocation, Rejection, or Acceptance
A written revocation, rejection, or acceptance is received when the writing comes into the possession of the person addressed, or of some person authorized by him to receive it for him, or when it is deposited in some place which he has authorized as the place for this or similar communications to be deposited for him.
69 Acceptance by Silence or Exercise of Dominion
1. Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
2. An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.
70 Effect of Receipt by Offeror of a Late or Otherwise Defective Acceptance
A late or otherwise defective acceptance may be effective as an offer to the original offeror, but his silence operates as an acceptance in such a case only as stated in § 69.
95 Requirements for Sealed Contract or Written Contract or Instrument
1. In the absence of statute a promise is binding without consideration if
2. When a statute provides in effect that a written contract or instrument is binding without consideration or that lack of consideration is an affirmative defense to an action on a written contract or instrument, in order to be subject to the statute a promise must either
96 What Constitutes a Seal
1. A seal is a manifestation in tangible and conventional form of an intention that a document be sealed.
2. A seal may take the form of a piece of wax, a wafer or other substance affixed to the document or of an impression made on the document.
3. By statute or decision in most States in which the seal retains significance a seal may take the form of a written or printed seal, word, scrawl or other sign.
97 When a Promise Is Sealed
A written promise is sealed if the promisor affixes or impresses a seal on the document or adopts a seal already thereon.
98 Adoption of a Seal by Delivery
Unless extrinsic circumstances manifest a contrary intention, the delivery of a written promise by the promisor amounts to the adoption of any seal then on the document which has apparent reference to his signature or to the signature of another party to the document.
99 Adoption of the Same Seal by Several Parties
Any number of parties to the same instrument may adopt one seal.
100 Recital of Sealing or Delivery
A recital of the sealing or of the delivery of a written promise is not essential to its validity as a contract under seal and is not conclusive of the fact of sealing or delivery unless a statute makes a recital of sealing the equivalent of a seal.
101 Delivery
A written promise, sealed or unsealed, may be delivered by the promisor in escrow, conditionally to the promisee, or unconditionally.
102 Unconditional Delivery
A written promise is delivered unconditionally when the promisor puts it out of his possession and manifests an intention that it is to take effect at once according to its terms.
103 Delivery in Escrow; Conditional Delivery to the Promisee
1. A written promise is delivered in escrow by the promisor when he puts it into the possession of a person other than the promisee without reserving a power of revocation and manifests an intention that the document is to take effect according to its terms upon the occurrence of a stated condition but not otherwise.
2. A written promise is delivered conditionally to the promisee when the promisor puts it into the possession of the promisee without reserving a power of revocation and manifests an intention that the document is to take effect according to its terms upon the occurrence of a stated condition but not otherwise.
3. Delivery of a written promise in escrow or its conditional delivery to the promisee has the same effect as unconditional delivery would have if the requirement of the condition were expressed in the writing.
4. In the absence of a statute modifying the significance of a seal, delivery of a sealed promise in escrow or its conditional delivery to the promisee is irrevocable for the time specified by the promisor for the occurrence of the condition, or, if no time is specified, for a reasonable time.
104 Acceptance or Disclaimer by the Promisee
1. Neither acceptance by the promisee nor knowledge by him of the existence of a promise is essential to the formation of a contract by the delivery of a written promise which is binding without consideration.
2. A promisee who has not manifested assent to a written promise may, within a reasonable time after learning of its existence and terms, render it inoperative by disclaimer.
3. Acceptance or disclaimer is irrevocable.
105 Acceptance Where Return Promise Is Contemplated
Where a conveyance or a document containing a promise also purports to contain a return promise by the grantee or promisee, acceptance by the grantee or promisee is essential to create any contractual obligation other than an option contract binding on the grantor or promisor.
106 What Amounts to Acceptance of Instrument
Acceptance of a conveyance or of a document containing a promise is a manifestation of assent to the terms thereof made, either before or after delivery, in accordance with any requirements imposed by the grantor or promisor. If the acceptance occurs before delivery and is not binding as an option contract, it is revocable until the moment of delivery.
107 Creation of Unsealed Contract by Acceptance by Promisee
Where a grantee or promisee accepts a sealed document which purports to contain a return promise by him, he makes the return promise. But if he does not sign or seal the document his promise is not under seal, and whether it is binding depends on the rules governing unsealed contracts.
108 Requirement of Naming or Describing Promisor and Promisee
A promise under seal is not binding without consideration unless both the promisor and the promisee are named in the document or so described as to be capable of identification when it is delivered.
109 Enforcement of a Sealed Contract by Promisee Who Does Not Sign or Seal It
The promisee of a promise under seal is not precluded from enforcing it as a sealed contract because he has not signed or sealed the document, unless his doing so was a condition of the delivery, whether or not the document contains a promise by him.