Part 3- Contracts, Chapter 11: The Agreement Acceptance, Doc 4

This text examines various aspects of contract law involving silence as acceptance, ambiguous offers, and the formation of contracts when written agreements are anticipated. Key points include: 1. Silence as Acceptance and Modification in Contracts (McGurn v. Bell Microproducts, Inc.)    Background: McGurn modified a termination clause in his employment offer by changing “twelve months” to “twenty-four months” and returned the signed document without notifying Bell. After his termination, he claimed entitlement to benefits under the modified clause, but Bell argued they hadn’t agreed to this term. Ruling: The court found that McGurn’s change constituted a counteroffer and ruled that Bell’s silence did not constitute acceptance of the modification. Since Bell had no indication that McGurn altered the clause, it wasn’t legally obligated to accept the change. Principle: Silence generally does not imply acceptance unless prior conduct between the parties or specific circumstances indicate otherwise, such as when a party knowingly benefits from a service with expectations of compensation. 2. Ambiguity in Offers and Acceptance by Performance   Ambiguous Offers: When an offer does not clearly specify whether acceptance requires a promise or performance, courts often allow acceptance in any reasonable manner, including through performance. Acceptance by Shipment (UCC 2-206): Under the UCC, a seller can accept a buyer’s order for goods either by promising to ship or by shipping the goods promptly. If a seller ships nonconforming goods (different from what the buyer ordered), it still constitutes acceptance and simultaneously a breach unless the seller notifies the buyer that the shipment is an “accommodation” or counteroffer. 3. Acceptance When Writing Is Anticipated   Formation without a Signed Writing: If parties intend to finalize an agreement in writing but act based on an informal agreement, the question arises whether a contract exists without signatures. Courts may recognize a contract based on mutual assent and performance, even if the parties anticipated a formal document. Standard for Acceptance without Signing: Courts will often assess whether a reasonable person, aware of the negotiation context, would conclude that the parties intended to be bound prior to signing. If key terms were agreed upon and one party starts performing, a contract may be implied. 4. International Context under the CISG (Contracts for the International Sale of Goods)  The CISG (Convention on Contracts for the International Sale of Goods) generally aligns with U.S. contract law in requiring express acceptance, but it differs by lacking the "Battle of the Forms" rule. Under the CISG, a response with materially different terms (e.g., regarding price or dispute resolution) constitutes a rejection rather than an acceptance, which contrasts with the UCC’s more flexible approach to variations in contract terms. Problems and Applications 1. Wilson and Citibank’s Modified Terms: o Citibank revised its credit card terms after Wilson began using her card. By continuing to use the card, Wilson implicitly accepted the new terms, which became binding. 2. FMW and Lindsay’s Dealership Sale: o After extensive negotiations, FMW and Lindsay had not yet signed a finalized agreement due to remaining discrepancies. When Lindsay later refused to proceed, the court would likely need to decide if a contract existed based on whether a reasonable person would conclude that both parties intended to be bound before the final signed document. 3. Adsit and Online Forum Selection Clause: o The court would likely determine that Mary’s acceptance by clicking “I Accept” on Adsit’s website constituted agreement to all terms, including the forum selection clause, even if she did not read them. This aligns with common e-commerce contract law principles where affirmative action (clicking “I Accept”) binds the user to the terms. 4. Standard Bent Glass and Glassrobots Arbitration Clause: o Standard Bent Glass negotiated extensively with Glassrobots on purchasing a machine, including an arbitration clause that may create enforceability issues. If both parties acted in reliance on the draft agreement and it contained essential terms, the arbitration clause could be binding despite the lack of formal execution. Each scenario underscores the importance of clear communication and explicit agreement in contract formation, particularly regarding silence as acceptance and performance as implied acceptance.