Quiz 13: Formation of Contracts: Offer and Acceptance


While making an offer, the offeror indirectly extends a promise to do something when the offeree does what the offeror requests. Such contracts can be Bilateral or Unilateral. Unilateral Contracts include those offers where the offeror may promise to do something when the offeree fulfills the offeror's request. Only the offeror extends a promise in unilateral contracts. Case Summary : Company BP placed an ad in the newspaper regarding the sale of their mink coats at a special price on first come, first serve basis. The ad also included the time and date of the sale. When ML, first in line, went to the store on the specified date, the coats were unavailable for sale. When she confronted the manager about the same, he told her that the ad was just an invitation and BP had decided to withdraw the offer. In the given case, company BP had in fact extended promise to the customers regarding the $500 mink coats. The statement "First come, first served" made it a unilateral contract. This clearly implied that the person who would be the first one to show up to the store would receive the deal. Hence, ML was eligible for the offer and should have received the coats for $500. Thus, the store had violated the unilateral contract and could be sued under this violation by ML.

Refer to the case Overman v Brown (372 NW2d 102) Facts of the case: Brown (defendant) offered to purchase Overman's (plaintiff) house and sent Overman a printed form for purchase. On the form read "Acceptance on Reverse Side". Overman sent Brown a separate letter of acceptance. Brown refused to follow with the purchase, Overman sued brown. District court ruled for plaintiff, Brown appealed. Opinion Appeals court affirmed. They disagreed with brown that "Acceptance on Reverse Side" is a requirement as acceptance as it was not specifically made clear that the acceptance of the offer depend upon signing on the reverse side. The acceptance can take many forms and writing a letter of acceptance was a valid display of acceptance.

Case Facts: K mailed P with definite and certain terms which is considered as a legal from all perspectives. In the mean while after some days Person K sent a letter at noon to a Person P by a certified mail stating that the original offer was revoked. On the other end, in the evening Person P e-mailed acceptance of the offer to Person K. As, soon she received the mail she called up to tell him that she had already revoked the offer in the afternoon and that might he probably receive it in tomorrow's mail. Here, the legal issue is whether the offer revoked by Person K or not. One can consider that the offer was not revoked by Person K.As, the letter sent by Person K would be valid for revocation only when Person P has received it. For example: Consider the other way around that means Person P has sent a letter addressed to Person K stamped by the Postal Service at 1:14PM and Person K sent an E-mail revoking the offer in the evening. As per this case concern , the mailbox rule comes in which means that Person P acceptance is valid from the time it was correctly addressed and stamped by the Post Office. Hence, it can be concluded that mailbox rule applies only to acceptances and also offer can be revoked only when Person P receives in the mail.

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