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The Basics of Offer, Acceptance, and Consideration An offer is an offeror’s manifestation of willingness to enter a bargain, justifying the offeree’s acceptance. Assuming adequate consideration, the offeree’s acceptance creates a binding contract. But once the offer terminates, so too does the offeree’s power of acceptance. With few exceptions, the offeror may revoke (terminate) the offer any time before acceptance. Acceptance is the offeree’s manifestation of assent to form a contract on the offer’s terms. Consideration means a bargained-for exchange of promises or performances. 1. A Merchant’s Firm Offer under UCC Article 2 If a merchant offers, in a signed writing, to buy or sell goods, and the writing’s terms give assurance that the offer will be held open, then the offer is irrevocable even without consideration for the lesser of (1) the time stated in the writing or (2) if none, a reasonable time. But in no event is the offer irrevocable for longer than three months after the offeree receives the offer. The offeror must separately sign the term if it appears on a writing that the offeree supplied. Of course, a promise to keep the offer open for consideration is a normal option, irrevocable for as long as the option indicates. The Battle of the Forms Under UCC § 2-207, an acceptance may form a contract although it contains terms additional to or different from the original offer. For instance, in the battle of the forms, the parties exchange preprinted, boilerplate forms to make or acknowledge orders for goods. If one form has terms additional to or inconsistent with the other, yet the parties perform, § 2-207 governs which terms become part of the contract. 1. Significance of a Definite and Seasonable Expression of Acceptance or Written Confirmation Generally, if the offeree sends definite, seasonable expression of acceptance or a written confirmation within a reasonable time, then the acceptance or confirmation is an acceptance forming a contract, even with terms additional to or different from the offer. But no contract forms if acceptance is expressly and clearly conditioned on assent to the additional or different terms, unless the offeror agrees to them. If the offeror agrees, a contract forms based on the terms in the conditional acceptance. If not, then no contract forms based on the parties’ writings. 2. Result if the Parties’ Writings Do Not Form a Contract If the parties’ writings do not form a contract, yet they perform, then their conduct establishes a contract. Here, contradictory terms in the writings cancel each other out, and the UCC itself supplies any relevant, missing terms.
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