>> In our last module, we focused on the first
of two elements required for mutual assent-- the offer.
We now focus on the second element--
acceptance of the offer.
As we've noted, section 35 of the Restatement
tells us that after an offer has been made,
the power shifts to the offeree to accept the offer,
and thereby create a contract.
To return to our tennis analogy,
once the offeror makes an offer,
the proverbial ball is now in the offeree's court
to accept or reject that offer.
Assuming that there has not been an effective termination
of the offer, the offeree now has the sole power
to decide whether a contract is created.
But subsection 2 of section 35
tells us that the offeree loses the power
to accept the offer, if the offer is terminated
in one of the ways listed in section 36.
Section 36 of the Restatement indicates several ways
in which an offeree's power of acceptance can be terminated,
one of which we explored in the last module--
revocation of the offer by the offeror.
Let's look at the other ways
in which the offeree's power of acceptance can be terminated.
Subsection "a" tells us that the offeree's power
to accept an offer can be terminated by the offeree,
by either rejecting the offer or making a counter-offer.
We will learn more about counter-offers
in the next module.
Let's consider rejection.
Section 38 of the Restatement defines "rejection"
as "the manifestation of the offeree's intent
"not to accept an offer."
Thus, if the offeree says something like,
"I'm not interested in your offer,"
the offeree has communicated a rejection of the offer.
Again, whether an offeree's statement will be considered
to manifest an intention to reject an offer
will be judged by an objective approach,
judged through the eyes of a reasonable person.
We learned that the offeree's power of acceptance
is also terminated by a lapse of time.
The notion of lapse of time,
is discussed in section 41 of the Restatement.
That section explains that if an offer specifies a time
after which it is no longer valid,
the offeree's power of acceptance
terminates at that time.
If no such time is specified,
then the offeree's power of acceptance
terminates at the end of a reasonable time.
Subsection 2 explains
that what constitutes a "reasonable time"
will vary from case to case,
and will depend on the circumstances
and context of the offer.
What is critical to note
is that EVERY offer has an expiration date.
An offer expires as expressly specified in the offer,
or, absent a specified time,
within a reasonable time after the offer had been made.
We also learned in section 36 that an offer is terminated
upon if the offeror either dies or becomes incapacitated.
With respect to subsection 2,
we will learn about conditions later in the course.
So assuming that the offer has not been terminated,
how does the offeree go about accepting?
Section 50 explains that acceptance
is a manifestation of assent to the terms of an offer,
in a manner invited or required by the offer.
Once again, the idea of a manifestation of assent
implies an objective approach to determining
whether an acceptance has occurred.
Would a reasonable person
view the offeree's words and actions
as indicating an intent to accept the offer?
The offeree's undisclosed subjective intention
is irrelevant to determining
whether there has been a valid acceptance.
So if Sam offers to sell his car to Mary for $10,000,
and Mary says, "I'll take it,"
a contract has been formed even if Mary was just kidding.
If Sam understood Mary's response to be serious,
we have a bargain.
On the other hand, if Sam knows Mary well enough,
and detects from her voice that she's joking,
we will see later in the course
that their mutually hidden understanding
actually trumps the way a reasonable person
would interpret their words.
When Sam is aware that Mary is kidding,
no contract is formed.
The last phrase-- "in a manner invited or required
"by the offer"-- is of particular importance.
We have learned that the offeror is the master of the offer,
in addition to being able to propose the terms
that he desires to be part of his offer,
section 30 tell us that the offeror
could also specify the manner of acceptance of the offer.
Thus, if the offeror specifies in his offer
that the acceptance must be in writing
branded on the side of a pig,
the offeree cannot accept by sending an email stating,
"I accept your offer."
To accept the offer, the offeree must comply
with the offeror's specified manner of acceptance,
any other form of acceptance is simply not kosher.
The idea that the offeror is master of the offer,
is reiterated in section 58 of the Restatement,
which states that acceptance must comply
with the requirements of the offer.
Assuming, however, that no special method of acceptance
is specified in the offer,
subsection 2 of section 30 makes clear that the offeree
can accept in a manner and medium
that is reasonable under the circumstances.