Ep. 3: Forming Consensus: Offer, Acceptance, and Context in Contract

Focusing on the "bargain context". We examine how promises made within a reciprocal exchange become legally binding. The text explores the interplay between common law rules and the Uniform Commercial Code (UCC), particularly highlighting the crucial concept of "offer and acceptance". The authors argue that while legal default rules are not always perfect, they provide a foundation for efficient bargaining. They present the Coase Theorem as a theoretical framework, suggesting that even without formal rules, parties are likely to negotiate towards an efficient outcome, minimising transaction costs. We then delve into the intricacies of offer and acceptance, exploring subjective vs. objective tests of mutual assent and how these tests are applied in real-world scenarios. We then move on to the issue of revocation, examining how offers can be withdrawn before acceptance and the exceptions to this rule. Finally, we'll explore the impact of the Internet on contract formation, focusing on "rolling contracts", where terms and conditions are presented after the purchase decision. It examines the validity of "shrink wrap", "click wrap" and "browse wrap" agreements, highlighting the challenges of applying traditional contract law to contemporary commerce. Overall, the excerpt seeks to provide a comprehensive understanding of the rules governing contract formation and their application in various contexts.