Contracts: Stage 1 of Agreement Process: Is there an Offer?

• Offer – manifestation of an intent to be bound, created by words or conduct.
• Context: An advertisement is usually NOT an offer (Mae Dong example)
• Unless the ad specifies a quantity (Monica example)
• Content: see if terms are too indefinite to be enforced.

• Requirements contracts (for buyers) are definite even though there is no mention of a specific quantity. (“all”/ “only”)

• Flatus Café offers to buy all its requirements of beans from Seller for six years for $1/can. This is okay. No specific # needed. Be on alert for sudden increases in quantity.

• Seller accepts Café’s offer. For the last three years, the Café has ordered 1,000 cans/year. The Café cannot require the Seller to deliver 8,000 cans this year because the buyer can’t take the seller by surprise. Any increase cannot be out of line with the buyer’s requirement.

• Open price term is too indefinite under common law, but not under Art. 2.

• S sends a letter offering to sell B Blackacre. The letter does not state a price. Offer? No. Blackacre is real property and not a good. Under the Common Law of Contracts, an offer has to contain a price.

• S sends a letter offering to sell B a painting of Blackacre. It’s a sale of goods. Article 2 applies. Under Art. 2, a price term is not needed because Art. 2 will fill gap of unreasonable price.