Contract Formation - Acceptance

First, some authorities:

R2d 30 - acceptance generally

R2d 50 - defines acceptance

R2d 23 - person assenting has to know of offer

Acceptance is:

• The offeree's manifestation of assent to the terms of the offer
• In the manner specified by offeree

The objective theory applies to acceptance, so if the offeror reasonably believed the offeree accepted, then he is bound.

An example of this is signing your apartment lease without reading it--the lessor would reasonably think you agreed although you are ignorant of some of the terms.

Only the person to whom the offer is extended may accept, and the offeree is usually required to know of the offer.  (One exception to this would be accepting government rewards.)

For general rewards, like a lost dog, if you look to the intent of the person placing the reward, you wouldn't think they would want to give the reward to several people if only one tip helped.  In that case, we would give the reward to the first person.

Identical offers that cross in the mail do not create a contract because neither one is an acceptance.  However, if this is governed by UCC Article 2, and the subsequent conduct recognizes the existence of a contract, then a contract may have resulted.  That's because the Battle of the Forms rules apply, rather than the mirror image rule.  

The offeree is master of his offer and can dictate terms of acceptance.  If mode and manner of acceptance aren't specified, any reasonable manner is acceptable.  Generally, acceptance by silence is not acceptance unless explicitly states.  At common law, acceptance by silence was not acceptance, and this could lead to unfair results (Prescott v. Jones--house burned down).  The Second Restatement says silence is acceptance when there's reason to understand it would be acceptance.  Also, if the person receives the benefit of the services (e.g. getting a series of free lessons), the prior course of dealing makes it reasonable, or they accept by taking dominion over the goods, they will be deemed to have accepted by silence.

If offeree is indifferent to acceptance by promise or performance, either one may be given.  In a unilateral contract, once the party begins to perform, an option is created.  But after he has performed, he has to give the offeror notice (sometimes immediately, but usually within a reasonable time), or else the contract doesn't exist.

And for some hypos...

1.  A and B send identical offers to one another, and they cross in the mail.  Is there a contract?

No because neither letter was sent with the expectation that the other would create a binding contract, and neither was sent in response to what the sender knew to be an offer.

2. Zoe gives ballet lessons for $50 an hour, when the going rate is usually $30 an hour.  Moriah and Zoe meet, and Zoe offers to come teach Moriah and tells her the price is $50.  Moriah says nothing.  Zoe shows up at Moriah's house every Satuday and begins teaching her lessons.  After 10 lessons, does Moriah owe Zoe anything?

Yes, $500.  Moriah accepted the benefit of the services, and she knew or should have known that Zoe expected to be compensated for them.  She's impliedly agreed to a contract for those services.  The market value is irrelevant because the "implied-in-fact" value was not for the market rate, but for Zoe's rate.

3.  Jack lost his dog and posted a reward notice on a stop sign near his house.  Jill saw a lost dog, read the address on its collar and brought it home to Jack, without knowing about the reward.  After Jill leaves Jack's house, she sees the sign.  Is she entitled to the reward?

No because an offer can generally only be accepted by someone who knows of the offer an intends to accept.  Since Jill didn't know about the reward, her actions were not a valid acceptance.