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Offer

I

Gen’y

A

Offer = manifestation of willingness to enter into a bargain that justifies other’s understanding that he need only assent to establish bargain.  (Rest § 24)

1

Offer creates power of acceptance.  Once power of acceptance exercised, K formed and parties fully liable for exp dams

B

Invitation to deal has no legal consequence, but can be valuable for interpreting later communications

C

Communications should gen’y be analyzed using OBJECTIVE THEORY: what would expression have meant to a r’ble person in same circums as party?  TODO perhaps this goes under interp section.  (Lucy v. Zehmer)

1

BUT for certain SPECIFIC STATEMENTS or types of stmts, we have the Expression rule.  For these stmts, we DON’T INTERPRET.  We have a standard, universal interp

2

Ex: in employment contract, when no duration specified, we automatically assume emp at will

II

What constitutes an offer

A

ELTS:  (Lefkowitz)

1

INTENT to enter into bargain

2

DEFINITENESS of terms: gen’y price, quantity, subject matter

B

Intent

1

Words used

a

Words suggesting invitation to deal: “are you interested,” “would you give,” “I quote,” “I would consider”

i

But “I quote you a price of $5 per dozen, for immediate acceptance” would be an offer

b

Words suggesting offer: “I will sell (buy),” “I offer”

i

But “We offer each dozen for $5” in an offering circular addressed to no one in particular wouldn’t be an offer

2

If party knows/reason other party doesn’t intend offer, no offer.  (Lonergan)

3

Ads: gen’y are not offers.  (Lefkowitz)

a

EXCEPTIONS:

i

Ads offering rewards, prizes.  (Carbolic Smoke Ball)

ii

ELTS:  (Lefkowitz)

1

Clear, definite, explicit

2

Leaves nothing open for negotiation

3

Makes it apparent to r’ble person that commitment is intended w/o further action by advertiser

4

Rewards: gen’y are offers

5

Offering circulars: gen’y are not offers unless directed to individuals

6

Auctions:

a

Bid is an offer.  (So may be withdrawn until hammer falls).  (Payne) (UCC § 2-328(3))

b

w/ reserve:

i

Putting item on block is invitation to deal: seller can withdraw item.  (UCC § 2-328(3))

c

w/o reserve:

i

Seller is BOUND TO SELL to highest bidder — no withdrawal (unless no bids).  (Rest § 28(1)(b)

ii

This is an EXCEPTION to the FIRM OFFER rule — seller has made a promise to keep offer open, but has rec’d no consideration for this promise

7

Putting K out for bid: not an offer.  But bids submitted for K are offers where there is reliance — e.g., a GENERAL CONTRACTOR using the bid in his own bid.  (Drennan)

10

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