Chapter 3

Acceptance – Compliance or agreement by one party with the terms of another’s offer so that a contract forms

Option – An offer, supported by consideration, may not be revoked at will

Offeror – Party making an offer

Offeree – Party receiving an offer

Battle of the Forms Rule – UCC rule, overrides mirror image rule when merchants use forms

Objective Standard – Used to determine whether parties had “meeting of the minds,” looks to what a reasonable person would believe, based on circumstances

Firm Offer – UCC rule, no consideration required to hold offer open between merchants

Offer – An indication of current willingness to enter into a contract, communicated by the person making the offer

Open Terms – Also called “gap-filling” provisions; under the UCC a contract may form despite failure to specify certain terms

Counter Offer – Offeree responds to an offer with an offer

Operation of Law – Events, including death, insanity, destruction of subject matter, and illegality, may terminate an offer

Rejection – Offeree terminates offer

Auction Without Reserve – A seller agrees to sell to the highest bidder and cannot revoke the offer to sell, even if bids are disappointingly low

Mirror Image Rule – Acceptance must be identical to offer

Mailbox Rule – Common law rule, acceptance occurs when dispatched by appropriate means