Sales and Leases | 57
open is given for consideration, it is a normal option. Here, the offer remains irrevocable for as long as the option specifies. [U.C.C. § 2-205, cmt. 3 (1951); 2 Anderson U.C.C. § 2-205:19 (3d. ed.), Westlaw (database updated Dec. 2020).] d. Death or Incapacity Normally, an offer terminates immediately once the offeror dies or becomes incapacitated, regardless of when or even whether the offeree learns of the death or incapacity. But if the offer is irrevocable due to an option, then it will not terminate with the offeror’s death. Thus, within the time specified in the option, the offeree can still accept the offer and form a binding contract. This contract, in turn, may give the offeree a claim against the offeror’s estate. e. Destruction of the Subject Matter An offer immediately terminates when its subject matter is destroyed. For instance, an offer to sell a house terminates if the house burns down. 3. Acceptance Generally, an acceptance is the offeree’s unconditional manifestation of assent to form a contract on the offer’s terms. Of course, to accept an offer, the offeree must know about it. Unless the offer specifies a method of acceptance, the offeree can usually accept an offer by any reasonable means. Acceptance is reasonable, in turn, if it reasonably indicates the offeree’s assent to be bound by the offer’s terms. Normally, acceptance will take the form of the offeree promising to perform according to the offer’s terms, but the offeree may also accept by actually performing. 4. Consideration The third and final ingredient to contract formation is consideration. Consideration refers to a bargained-for exchange of promises or performances. The heart of a bargained-for exchange is mutual inducement. That is, each party’s promise or performance must induce the other’s promise or performance. The promised or rendered performance may consist of an affirmative act; a forbearance to do something a party has a legal right to do; or creating, modifying, or terminating some legal relationship. Normally, exchanges of value are adequate consideration; the exchanged values need not be equal or even nearly equal. [ See Restatement (Second) of Contracts § 71, with comments.] The Battle of the Forms As mentioned, at common law, an acceptance must precisely mirror the offer’s terms. If the acceptance at all alters or even adds to the offer, then the acceptance is instead deemed to be a
Made with FlippingBook - Online Brochure Maker