Was there an enforceable contract between Abe and Bob, and if so, at what price?.
Bob – Enforceable Contract? .
A. Formation.
In order for Abe to prove he has a valid enforceable contract, he must show that all the essential elements are present. Abe must prove that there was valid offer and valid acceptance of the terms to be a valid enforceable contract. .
1. Applicable Laws.
Since this contract is for the sale of moveable goods [widgets], common law is not relative to this transaction; rather Article 2 of the Uniform Commercial Code ("UCC") will govern this transaction. In this case, it seems that Abe (seller) and Bob (buyer) are "merchants" within the meaning of the UCC because Abe is selling "cheap widgets" and knows his competitors product, and Bob wants to buy them for his business. According to the Article 2 of the UCC's, a merchant is a person who has special knowledge of or who regularly deals in this type of moveable goods involved. Since the parties are both merchants, they will be held to a higher standard of good faith and fair dealing, and the Special Merchant Rule will govern as well. .
a. Mutual Assent.
Mutual assent requires that the essential terms of the contract are sufficiently definite and certain and that both parties have agreed to those terms. The problem in this case is that the price term "cheap" and the price is dependent on the quantity "numbered ordered" may not be definite and certain. .
b. Was there an offer made? .
A valid offer exits if a party communicates to the other party an intention to be bound by the terms of the offer. The terms must be definite, certain terms communicated to an identified offeree. The expression of intention to be bound must contain the essential terms of the agreement. Here, Abe is advertising in the newspaper "cheap widgets" and the price is dependent of the number of widgets ordered.