34. Under the relevant and prevailing rules, is there a contract between the buyer and the seller as of January 10?

The power of acceptance created by an offer ends when the offer is terminated. The mutual assent requirement obviously cannot be met where the termination occurs before acceptance is effective. One type of offer termination is revocation, which is the retraction of an offer by the offeror. A revocation terminates the offeree's power of acceptance IF it is communicated to her BEFORE she accepts.

An ordinary offer is revocable at the will of the offeror, even if he has promised not to revoke for a certain period. However, there are several exceptions to the general rule allowing revocation: (i) the standard option contract; (ii) firm offers under the UCC; and (iii) temporary irrevocability as the result of the offeree's part performance or detrimental reliance.

An acceptance is the offeree's manifestation of assent to the terms of the offer, made in a matter invited or required by the offer. The mailbox rule renders a properly-mailed acceptance effective upon dispatch, not the receipt. This means that when a letter is deposited in the mail, the acceptance is effective, and the offer can no longer be revoked.

Some offers are ambiguous about if they invite acceptance through a return promise or through performance. This commonly occurs when the offer is a request that the goods be shipped. In this situation, the UCC states that an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt shipment of conforming OR non-conforming goods, OR a prompt promise to ship. See UCC § 2-206(1)(b).

D is correct. As of January 10, there was a valid contract between the parties because there was an offer, acceptance, and the attempted revocation was invalid. Unless the offer is an option, the rule is that an offeror may revoke an offer at any time before the offer has been accepted. And, under the mailbox rule, unless the offer specifies otherwise, notice of acceptance is effective upon dispatch in the mail if a mailed acceptance is invited by the terms of the offer.

Here, the buyer's original order was mailed. Thus, the seller's properly stamped and addressed letter was invited by the terms of the offer and was effective upon its dispatch on January 7. Because the buyer did not attempt to revoke the offer until January 8, after the seller had already dispatched their acceptance on January 7, the seller created a contract that was effective on January 7. The buyer's revocation after the acceptance is not enough to terminate the contract.

A is incorrect. This answer is referring to the UCC rule allowing acceptance of an offer to purchase goods by way of prompt shipment of those goods. Although the offer could have been properly accepted by prompt shipment, this was not the only available means of proper acceptance here. As explained above, the mailed offer invited acceptance also by mail, and thus, when the seller dispatched the acceptance on January 7, a valid contract was formed.

B is incorrect. The buyer's offer manifested an agreement to purchase the widgets at the seller's «current price.» The seller's acceptance stated that the current price was $10 per widget. As such, the buyer effectively agreed to the $10 price by leaving that term open to whatever the seller indicated was the current price.

C is incorrect. This answer reaches the correct answer with the wrong reasoning. There was a valid contract between the buyer and seller as of January 10, but not because the offer was irrevocable. Based on the terms, there was no indication that the offer was irrevocable. However, there was still a valid contract because the offer was accepted by mail prior to the revocation, as explained above.