Acceptance

Acceptance

by Marina Ordones

Who can accept an offer?​

When an offer is made, the power to give acceptance is created in the intended offeree who is the only one that is allowed to accept the offer.

How should an offer be accepted?​

The offeree must accept the offer in accordance with the terms established by the offeror.

​Who is the Master of the offer and what does it mean?

​The offeror is the Master of the Offer;

​​He or she is free to determine how and when the offer should be accepted by the offeree.

Multiple Choice

Anne offers to pay John $100 to paint her house.

As Master of the Offer, Anne could prescribe any reasonable specific method of acceptance such as calling her assistant or sending an email.

• Correct

• Incorrect

​What happens if the offeror does not specify how the offer should be accepted?

In the absence of a specific manner of acceptance, the offeree may accept the offer through performance or objective manifestation of acceptance.

​Objective Test

• Acceptance to an offer should be analyzed through an objective perspective;

• Possible hidden intentions of the offeree are not taken into account.

​What if an offeree remains silent on an offer?

​​Silence is not considered to be an acceptance.

​However, there are four exceptions under which an offeree’s silence may be considered to be an acceptance.

• ​Silence may be an acceptance if the offeree receives the benefit of offered services, despite reasonable opportunity to reject those services, as well as reason to know that compensation is expected.

• ​Silence may be an acceptance if the offeree exercises dominion over offered property by acting inconsistently with the offeror’s ownership of that property.

• ​For example, let's say your real estate agent takes you to see a house that is on the market for sale;

• You really liked the place, and even the price. You, on the other hand, do not say yes or no to the offer.

• The next morning, you decide to move into the house, placing all your personal belongings there;

• ​By moving to the house, you exercised dominion over another person's propriety and, therefore, you implicitly accepted the offer. A contract for sale was formed.

• Silence may be an acceptance if there are prior businesses between the parties and that it is customary for the two parties to treat silence as an acceptance.

• "Arigato", a famous sushi restaurant in Seattle, has a long lasting relationship with a local fish supplier - Mr. Takaoshi;

• For five years, Mr. Takaoshi has been deliverying fresh tuna and salmon at "Arigato" every Tuesday;

• ​Suddenly, the price of salmon and tuna goes up.

• Mr. Takaoshi sends an email to the restaurant manager reflecting the new price, and he does not respond to it;

• ​By next Tuesday, the restaurant receives and pays for the expected delivery without any objection regarding the new prices;

• Six months later the same thing happens: the fish prices go up, an email is sent to the manager, who does not reply to it;

• ​Will silence be considered an acceptance?

• Finally, silence may be an acceptance if the offeror and offeree intend for the offeree’s silence or nonverbal conduct to constitute an acceptance.

• Daniel offers to paint Gina's house for $100. If she does not respond to his offer, there is no acceptance.

• If, however, Daniel specifically states that if he does not hear anything from Gina by Friday, he will assume that she agrees to his offer, and Gina agrees with this condition, then, comes Friday what will happen if she remains silent?

• ​For example, suppose you go into your favorite fast-food restaurant and see that the manager is busy with customers.

• You grab a bottle of water out of the cooler, and, catching her eye, you point to the bottle and she nods. You then take a seat and start drinking the water.

• Even though the two of you have not exchanged words, can we say that there was a valid offer and acceptance?

​AWARENESS

​When an offer is made, the power to give an acceptance is created in the intended offeree who is invited to accept.

​

However, the offeree must know of the offer at the time of acceptance.

​Lulu, John's beloved dog, got lost during a walk in the park.

John was devastated and decided to set a reward of $1,000 for anyone who was able to find the dog.

Posters with the reward offer were spread around the neighborhood.

Edward, a boy who was visiting his grandmother, saw Lulu lost on the streets. He was able to retrieve the dog and give it back to John thanks to his grandmother, who had heard about the story of a missing dog near her home. 

Neither the boy nor his grandmother knew about the reward prize. Is Edward entitled to the money?

The mirror-image rule

The offeree’s acceptance must be the mirror image of the offer, matching it in every respect.

Any acceptance that adds to or changes the terms of an offer is considered a counteroffer that rejects and terminates the initial offer.

• According to Section 2-207 of the UCC, a response that somehow alters the original details of the offer may still be considered acceptance, unless one of the following circunstances occur:

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​Contracts for the acquisition of goods between merchants, on the other hand, do not always follow the mirror-image principle.

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1. A response will not be considered an acceptance if the non-matching terms are essential to the contract, such as price or quantity.

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2. Also, section 2-207 of the UCC will not be applied if the offeror expressly forbids any modification to his offer.

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3. Finally, if the offeror timely manifests against the offeree's proposed changes, section 2-207 of the UCC will not apply.

• ​What is the UCC?

• ​What is the purpose of the UCC (a model code)?

• ​What is a "firm offer"?

• ​What is an "option contract"?

• ​What is the "battle of the forms"?

• ​What are "gap filler" rules?

• ​What is the "risk of loss"?

• ​When does the "risk of loss" passes to the buyer? What happens if the seller is a merchant?

• ​What happens to the "risk of loss" if there is a common carrier involved? (shipment contract vs destination contract)

• ​What is the buyer´s right to inspect?

• ​What is the seller´s right to cure?

The Mailbox Rule

According to this rule, acceptance is effective on dispatch — that is, when it leaves the offeree’s hands, not when the offeror receives it.

Multiple Choice

Anne says to John: “I’ll pay you $100 to paint my house. However, your acceptance will be effective only when I receive your signed agreement.” Is this a valid proposal?

• No, the offeror may not violate the mailbox rule, which establishes acceptance as soon as the document is dispatched.

• Yes, the offeror may prescribe a time of acceptance that is not the moment of dispatch.

​What happens if the acceptance is mailed but it gets lost?

​* If the acceptance was correctely addressed: the document is still considered effective upon dispatch, even if the offeror never received the acceptance at all.  

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​​If the acceptance is mailed but the document gets lost, then it is necessary to check if it was correctly addressed or not.

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​​* If the acceptance was improperly addressed: the document will only be considered effective upon dispatch if, despite the wrong address, the acceptance still finds its way to the offeror within the expected delivery time.

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​Exception to the "mailbox rule":

​* On Monday, Mary receives an offer by mail;

* On Tuesday, she replies by rejecting the offer and mailing it back to the offeror;

​* However, on Wednesday, she regrets the rejection and sends a new letter, this time accepting the offer.

​* How does the law deal with situations like this?

​Exception to the "mailbox rule":

​* Whatever letter arrives first, will be the valid one.

​* If the rejection letter is received first by the offeror, then the offer is considered rejected;

​* If the acceptance is received first by the offeror, then the offer should be considered accepted.

• This exception only applies if the order of the events is: the offeree receives the offer, then he replys by rejecting the offer or creating a counter-offer, later he regrets rejecting or creating a counter-offer and sends a new answer, this time accepting the original terms of the offer;

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• However, the mailbox rule will still be applied in case the offeree first dispatches a letter accepting the offer and only later regrets giving his acceptance and decides to send a new letter this time rejecting the original offer.