Acceptance and Contract Formation - Essay Example

Name: Tutor: Title: Acceptance and contract formation Date: Acceptance and contract formation Introduction Acceptance refers to the assent manifestation to the conditions and terms of the offer that the offeree usually makes. The manifestation is done in a manner that the offer requires. There are three pieces of evidence looked at by the court in attempts to determine whether or not an offeree agreed with and accepted the offer and hence created a contract. The evidence include: (1) the offeree had initial intention of entering the contract, (2) the offeree agreed or accepted the terms stipulated by the offerer and (3) the offeree made a communication of his or her acceptance to the offeror. To determine whether an offer was accepted by the offeree, a court seeks to establish whether the present intent to the contract was the same on both the part of the offeror and the part of the offerer. Accepting intentions are hence judged by objective standards and this is true to intentions of making offers. The difference, however, is that an offeree needs to make an objective indication of present intentions of contracting on the offers’ terms so that there is a result of a contract.1 The role of Acceptance in contract formation The offerer, being the offer master, may make detailed specifications on the behaviour needed of the offeree to bind him or her to a given contract.2 If offerors do so, the offerees have to comply ordinarily with every terms and condition of the offer prior with getting into a contract. The traditional law of contract rule needs an acceptance to be the offer’s mirror image. Counteroffers come in when an offerer attempts to make changes on the terms that the offer has in place or when he or she attempts to add new conditions and terms to the offer. Recently; however, there has been the judicial tendency of applying the rule of the mirror image in fashions that are more liberal. The judiciary does so by holding that only important material variances that exist between a claimed acceptance result and an offer in an offer’s implied rejection. There is no rejection implied, even under the rule of the mirror image when offeree merely ask about offer’s terms but making an indication of its rejection. Or when the offerees accept the terms of the offer while at the same time complaining about them; this is referred to as a grumbling acceptance. It is however very difficult to make differentiations among grumbling acceptance, an inquiry regarding terms and counteroffers. The most fundamental idea remains the same nevertheless: was there an objective indication by the offeree about a resent intent that the terms of offer should bind?3 A contract does not exist until and unless an offer is accepted by the people that the offer has been addressed to (ibid). Normally, acceptance is made in writing or orally. However, acceptance can be made by conduct as well if the contract at all makes the provision of contractual duties performance and the acceptance are to be simultaneously attended to. For instance, when suppliers receive cheques, the suppliers may make the delivery of the goods immediately without writing or saying anything. It is therefore recommended that either contracting party completely agrees and clearly specifies the acceptance method. If the acceptance method isn’t clearly specified by the offeror, then some rules may apply. The rules include: • Postal Rule- Whether it is sensible to make use of the post for the processes of acceptance and offer. The contract is then formed when the acceptance letter is posted and it does not matter whether the letter gets lost in the post or not. • Receipt Rule- an acceptance is deemed valid, when sent by fax, as soon as the message is received. This happens whether the offeror reads the fax immediately or not. The rule applies as well to e-mails.4 Partial or conditional acceptance is referred to as a counter-offer. In that respect; therefore, it does not make up a contract that is valid. In a nutshell, if whoever the offer is addressed accepts just a section of the contract and rejects the remaining bit or, rather, he or she makes propositions of new terms, then such an individual does not accept the offer. The acceptance of a particular order happens when every offered term is unqualifiedly accepted. That is however out of the ordinary and there will hence be a negotiation period.5 New conditions and terms introduced via negotiation in effect ends up in some counter offers against the initial original offers and, as a result, cancelling the original offer’s terms and conditions. An offer of a contract, however, is only acceptable at times when it has been made known to the offerer. This is applicable in instantaneous communication cases for instance by telephone, where whoever I giving acceptance will automatically know whether the communication is unsuccessful or not and will, therefore, have an opportunity to make a proper communication (ibid). However, the only exception to the rule is when an accepted is sent as a post (ibid). An acceptance and an offer, therefore, are fundamental requirements needed to form a contract that is legally binding. They are the expressions of offers to contract on given terms by a particular person to another and the offeree’s indication of the acceptance regarding the terms and conditions. Another element that is required traditionally for a contract that is legally binding is a legal relations creation intention and consideration. Acceptance and offer analysis is a contract law’s traditional approach. The acceptance and offer formula was developed in the 19th century and it makes an identification of a formation moment when all the parties have one mind. The contract formation classical approach has been made weak by the law of estoppel developments misleading conduct, unjust enrichment and misinterpretation. The essential requirements, for acceptance, is that each party that is engaged in the manifestation of the conduct of their assent. Under the theory of contract of the meeting of the mind, a party is most likely to resist a breach claim. He or she, therefore, attempts to prove that they had no intentions of being bounded by the terms of the agreement only it looked like he subjectively had so intended.6 How courts have responded to conditional or qualified acceptance Courts have responded differently to different cases regarding contract formation that touch on the qualified or conditional acceptance (ibid). There are numerous instances of cases where the courts were forced to make rulings in favour of either the offeror or the offeree. In the State of California, in the court of appeal, fourth appellate district division three, there was an Acceptance oriented ruling. Defendants Ulla and Jacqueline were Jesper Peterson’s daughter and wife respectively who had deceased and the Jesper Petersen Revocable Trust co-trustees. There was an appeal from the verdict that entered prior to a jury finding that a contract was breached of selling to plaintiff SunCal La Quinta real property. The trial erred was contended and failed in finding on summary judgement as a law matter that the payment of plaintiff of extending the period of escrow was conditioned on new findings and terms. This was opted because the material fact trial issues existed. It’s agreed that the issue was of the law; however, it's disagreed that there was an entitlement to judgement by the defendants. The defendants as well argue that the contract to a great extent was null and void and they referred to the Subdivision Map Act (SMA), and of Gov. Code §§ 66410 et seq. The court erred that instruct the jury about the waiver, option contracts and imputed knowledge, and the form of the judgement was defective. The cross-appeals of plaintiff that asserted the court extended its authority to grant the motion of the defendants to vacate the verdict and hence entering a new verdict and at the same time eliminating the interest of prejudgement previously awarded (ibid). In actions that seek performances that are specific to alleged contracts for the real property sale, plaintiff John Roth, the would-be buyer makes appeals from the summary verdict (ibid). The summary verdict is made favouring the owner of the property, defendant George Malson. The plaintiff buyer wrote an offer of buying real property. The defendant seller wrote a counteroffer. The writing was on a form that was standard and the California Association of Realtors adopted it. The signature line of he form was entitled “ACCEPTANCE”. Plaintiff could hence accept the counteroffer. However, plaintiff did not sign the “ACCEPTANCE” bit of the form but rather signed a different bit that was indicated “counter to counteroffer” on the form. Plaintiff, in the “changes/amendments” section of the form as well wrote in certain purchase terms. Although it turned out, ultimately, that the terms were not different from the counteroffer defendants. The court that was pursuing the case made a conclusion that there was no formed contract because the “counter to counteroffer” of plaintiff was an acceptance that was qualified of the counteroffer of the defendants. It is, therefore, agreeable and for the trial court to affirm the verdict in the defendants favour.7 The courts make very sober verdicts regarding contract formation. The courts make every consideration by putting into account the terms of the offer (ibid). The terms of the offer are established by the offeror and they are to be read and accepted by the offeree. If the offeree does not agree with the terms and conditions of the offer then, the offer seizes to be valid. The offeree may also partially agree with terms and push for adjustments of some sections of the terms and conditions of the offer. This however referred to as a counteroffer. The courts, therefore, consider whether the offeree fully accepted the terms of the offer stipulated for the contract. The court also tries to establish whether the offer terms established by the offeror are logical and workable for that matter. The courts always have to be careful to make very fair decisions and verdicts. For instance, the case of the State of California, in the court of appeal, fourth appellate district division three, where there was an Acceptance oriented ruling, the court made the judgement carefully. The judgement was reached after the jury said their opinions and made their votes regarding whether the offeror was guilty or whether the offeree was. It was hence agreeable and for the trial court to affirm the verdict in the defendant's favour. The system of the court makes the consideration of every aspect of a contract before eventually considering which stand to take. To determine an acceptance that is valid, it should be considered whether the promises made by the offeree were attempting to bargain for the response. A unilateral contract acceptance calls for action and not promises. Furnishing of the intended performance notices is unnecessary not unless requested by the offer.8 Conclusion In conclusion, accepting an offer expresses assent to the terms of the offer. When an individual, therefore, accepts the offer, it means, in short, that the person has read and considered the terms and requirements of the contract. The offeree, therefore, must make the offer in a way authorised or requested by the offeror. An acceptance is deemed valid only in cases where the offeree completely knows what the offer is all about. The offeree must therefore not be put in darkness because the offer directly impacts on him or her. An acceptance is a very fundamental aspect of any contract because it gives the offeree the free will to either agree or disagree with the terms of the contract. The courts have competently strived to make sure that contracts are treated fairly and in a manner that is just. A contract is not something forceful that’s why it contains the terms of its offer that should be accepted and signed by the offeree. List of references Abbott Nathan. ‘Contract Law Intensive.’ Part 1 – Fundamental concepts (LexisNexis Contract Law Intensive Conference, 2009) 45. Community Legal Information Centre (CLiC). 1. What are the basic requirements for making a valid contract? (1st April 2012). Community Legal Information Centre. . Davis Kevin. Contract formation objective theory of assent. Contracts (University of Kansas School of Law, 37th ed, 2013) Denicola Robert. Law of Contracts (Jones & Bartlett Learning, 2nd ed, 2004) 253 Hull Concurs. Court of Appeal, Third District, California. John Roth, Plaintiff and Appellant, v. George E. MALSON, Defendant and Respondent [1998] Co. 27262. (28 October 1998). LawTeacher, Formation of a Contract Introduction to Formation of a Contract (6th September 2015) . Polite Allen, Settlement agreement between the United States of America and the Louisiana Supreme Court under the Americans with disabilities act (September 2015) . Rylaarsdam Acting, ‘In the court of appeal of the state of California fourth appellate district division three’, Suncal la Quinta, llc, plaintiff and Appellant,v.Jacqueline m. Eston, as Co-Trustee,etc., et al.,Defendants and Appellants (2014) 20. Read More