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Offer and Acceptance

Chapter 7. Offer and Acceptance. 7-1: Contract. An agreement that courts will enforce. What do you think are some examples of contracts? What do you think are some examples of agreements that would not be enforceable in court?. 6 Elements of a Contract. Offer and Acceptance

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Offer and Acceptance

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  1. Chapter 7 Offer and Acceptance

  2. 7-1: Contract • An agreement that courts will enforce. • What do you think are some examples of contracts? • What do you think are some examples of agreements that would not be enforceable in court?

  3. 6 Elements of a Contract • Offer and Acceptance • Genuine Assent – no deceiving one another, no unfair pressure. • Legality – Must be legal. • Consideration – both sides receiving something of legal value. • Capacity – must be capable themselves. • Writing – Some must be in writing to be enforceable in court.

  4. Offer • Proposal by the OFFEROR to do something, providing the OFFEREE does something in return. • A painter measures the exterior of a home and promises to paint the house within 30 days for $3,000. This is the OFFER. If the home owners agree to the time frame and the $3,000, this is the ACCEPTANCE.

  5. Offerer • The painter. • Communicated a serious, definite proposal.

  6. Offeree • The home-owners • Persons to whom the offer is made

  7. Requirements of an Offer • The offeror must appear to intend to create a legal obligation • The terms must be definite and complete. • The offer must be communicated to the offeree.

  8. A. Expression of Intent to Create a Legal Obligation • Test of the Reasonable Person • Concerned with the appearance of the person making the offer. • Depends on how a “reasonable person” would take your offer…joking? Serious? • Facts and Circumstances • Words spoken in obvious jest, frenzied terror, or anger would not be offers if a reasonable listener would realize that no offer was intended.

  9. Expression of Intent Cntd… • Preliminary Negotiations • “Would you take $800 for that computer?” • “Look Jeff, I’ll give you $800 today for that computer…are you interested? • Which one of the above is an offer? • Social Agreements • Your friend doesn’t show up at the movies at 8:00, like you had planned…can you take them to court for breach of contract?

  10. B. Offer must be Complete and Clear • Complete – not missing any essential info…Price, Subject Matter, Quantity. • Clear • Implied Terms – Implied by law or common business practice. • Advertisements – Ads in newspapers and magazines, on radio or television, or in direct mailings are generally not offers. • Instead they are “invitations to customers to make offers.”

  11. Why would this be? • A person who advertises something for sale has a limited stock and cannot be expected to sell to the many thousands who might be interested. • Black Friday Deals • Day after Christmas Sales

  12. What’s your Verdict? • Page 112 • The “would-be-buyers” were the ones making an offer.

  13. Advertisements may occasionally be Offers • First – the ad must be clearly worded in way to address lots of possible purchasers and minimum products to purchase. • “Car will be sold only to the first person to accept the terms contained in the offer.” • “Subject to stock on hand.”

  14. Ads = Offer • Second – If it asks the offeree to perform an act as a way of accepting. • Lawn mower will be sold for $20 to “the first person to appear at the main door of a shopping mall on Saturday morning after 6am”

  15. C. Offer must be communicated to the Offeree • A person who is not the intended offeree cannot accept the offer. • A person cannot accept an offer without knowing it has been made.

  16. 7-2: How Offers End • Revocation by the Offeror • Time Stated in the Offer • Reasonable Length of Time • Perishable product…short length of time • Rejection by the Offeree • Counteroffer • Death or Insanity

  17. How Offers Can be Kept Open • Options • Separate contract arising when the offeree gives the offeror something of value in return for a promise to leave the offer open. • Firm Offers • An offer by a merchant for the sale or purchase of goods stating in a signed writing how long it stays open is a Firm offer.

  18. 7-3: ACCEPTANCE • Occurs when a party to whom an offer has been made agrees to the proposal.

  19. Requirements of Acceptance • Be made by the person or persons to whom the offer was made. • Match the terms in the offer • Be communicated to the Offeror

  20. B. Acceptance must match the offer • Mirror Image Rule • Requires that the terms in the acceptance must exactly match the terms in the offer. • Tax preparation & Realty • Goods

  21. C. Acceptance Must be Communicated to the Offeror • Silence as Acceptance • Proactiv – Until you CANCEL your shipment, you are accepting the offer. • Unilateral Acceptance • Offerees performance is the way acceptance is made. • Bilateral Acceptance • Requires that the offeree accept by communicating the requested promise to the offeror.

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