1. C H A P T E R
11
The Agreement:
Acceptance
Make your
bargain before
beginning to
plow.
Arab proverb
11-1

2. Learning Objectives
• Explain elements of acceptance
under common law and the UCC
• Determine how acceptance can
be communicated, including by
silence
• Determine when oral acceptance
is effective
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3. Requirements for Acceptance
• Acceptance must be by clear expression
by offeree of intent to be bound by terms
of offer and communicated to offeror
– Only offeree may accept offer
– If offer calls for performance, then
performance is acceptance
– Offeror may specify manner of
acceptance
• Example: “notify of acceptance in writing”
11-3

4. Trademark Properties v. A & E
Television Networks
• Facts & Procedural History:
– Dispute arose out of a disagreement over alleged
oral agreement to split equally net revenues of
the reality television series “Flip This House”
– Court dismissed all plaintiff’s claims except breach
of contract. Jury returned verdict awarding
Plaintiff just over $4 million, or about half of first
season’s net revenues
– Defendant appealed arguing that evidence was
legally insufficient to support a finding of an oral
contract under New York law
11-4

5. Trademark Properties v. A & E
Television Networks
• Issue: Did jury reasonably find that parties formed
an oral contract over distribution of revenue?
• Reasoning and Holding:
– Oral contracts as binding as written contracts,
but “context matters”
– If Davis reasonably understood A&E
representative’s equivocal statement as
acceptance, then contract was formed; also,
conduct of A&E and Davis supports both parties
believed contract existed
– Judgment affirmed
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6. Mirror Image Rule
• Traditional contract law rule required
acceptance to be the mirror image of
the offer
– Example: Pride v. Lewis
• Currently, judges hold that only
material variances between an offer
and an alleged acceptance result in
an implied rejection of the offer
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7. The UCC & Variance of Terms
• UCC 2–207 allows contract formation even
when there is some variance between terms
of offer and terms of acceptance
– A definite and timely expression of acceptance
creates a contract, even if it includes terms
different from those stated in offer or if it states
additional terms offer did not address [2–207(1)]
– Belden v. American Electric Components, Inc.
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8. 11-8

9. Communicating Acceptance
• With instantaneous forms of communication,
knowing when acceptance occurs is easy
– Non-instantaneous forms (postal mail) more difficult
• Mailbox rule makes acceptance effective
upon dispatch when the offeree used a
manner of communication expressly or
impliedly authorized (invited) by the offeror
• Okosa v. Hall illustrates operation of the rule
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10. Communicating Acceptance
• Courts today allow communication of
acceptance by any reasonable means
of communication
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11. Silence as Acceptance
• General rule is that an offeree’s silence,
without more, is not an acceptance
• Circumstances may impose duty on
offeree to reject offer affirmatively or be
bound
• Includes cases in which offeree’s silence
objectively indicates an intent to accept
– Example: McGurn v. Bell Microproducts, Inc.
11-11

12. McGurn v. Bell Microproducts
• Facts:
– Bell extended offer of employment to plaintiff
– Plaintiff altered written offer to include
severance package, signed and returned
– Bell silent regarding alteration and plaintiff
worked for more than a year
– Bell fired plaintiff and refused to pay
severance
– Plaintiff won summary judgment for breach of
contract
11-12

13. McGurn v. Bell Microproducts
• Reasoning & Ruling:
– Silence in response to an offer does not constitute
acceptance unless offeree takes benefit of
offered services with reasonable opportunity to
reject them and reason to know that they were
offered with the expectation of compensation
• Restatement (Second) of Contracts §69
– Whether Bell accepted plaintiff’s alteration of the
contract by its silence and conduct is a matter of
fact, thus a matter for the jury; case remanded
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14. Effect of Acceptance
OFFER
+ ACCEPTANCE
AGREEMENT
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15. Test Your Knowledge
• True=A, False = B
– Silence may never indicate acceptance
– Offeror may specify manner of acceptance
– Only material variances between an offer and
an alleged acceptance result in an implied
rejection of the offer
– UCC 2–207 does not allow contract formation
if there is some variance between terms of
offer and terms of the acceptance
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16. Test Your Knowledge
• Multiple Choice
– The effect of offer plus acceptance is:
a) Negligible
b) An agreement
c) The mirror image rule
d) None of the above
11-16

17. Thought Questions
• Do you read clickwrap agreements when
purchasing goods through a website?
• Should you be bound by click agreements
if purchasing via the internet?
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