1. Chapter 6 Offer and Acceptance
7/16/2019
Chapter 6 Offer and Acceptance
6-1 Creation of Offers
6-2 Termination of Offers
6-3 Acceptances
Chapter 6
LAW

2. 6-1 Creation of Offers GOALS
List the elements required to form a contract
Describe the requirements of an offer
Chapter 6

3. WHAT MUST BE IN A CONTRACT?
Offer and acceptance
Offeror makes offer & offeree accepts
Terms must be definite and accepted without change
Genuine assent
Agreement can’t be based on an important mistake, unfair pressure, or deceipt
Legality
Can’t have an agreement to commit crime/tort
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4. WHAT MUST BE IN A CONTRACT?
Consideration – both parties have to receive value
Capacity – most states minimum age 18
Writing – some K’s must be in writing
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5. What elements are required to form a legally enforceable contract?
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6. REQUIREMENTS OF AN OFFER
Contractual intent must be present – facts & circumstances are considered “would a reasonable person disregard”
Jests
Statements made in anger or terror
Preliminary negotiations
Ads are not offers UNLESS:
“Subject to stock on hand”, etc
“First 10 customers, first to arrive,” etc.
Social agreements – not legal obligations
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7. REQUIREMENTS OF AN OFFER
Offer must be communicated to the offeree
Must be accepted by the intended offeree
Can’t accept an offer if you didn’t know one existed (rewards)
Essential terms must be complete and definite (allows courts to determine intent)
COMPLETE: at minimum identified the price, subject matter, and the quantity
DEFINITE: each essential term must be clearly identified
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8. What are the requirements of an offer?
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9. 6-2 Termination of Offers
GOALS
Describe the various ways to end offers
Explain how an offeree can ensure an offer will remain open
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10. HOW CAN OFFERS BE ENDED? Revocation by the offeror
Anytime before offeree accepts
Revocation is not effective until communicated to the offeree
Time stated in the offer
Reasonable length of time
Depends on the circumstances
Rejection by the offeree
Even if the time limit has not expired
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11. HOW CAN OFFERS BE ENDED? Counteroffer
Changes to important terms of the K
Death or insanity of either the offeror or offeree
Destruction of the specific subject matter
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12. Explain two ways in which offers can be terminated.
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13. HOW CAN AN OFFER BE KEPT OPEN?
Options
Offeree gives the offeror something of value in return for a promise to keep the offer open
Firm offers
A contractual proposal in writing by a merchant stating how long the offer is to stay open
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14. How could an offeree insure that an offer will stay open for a set period of time?
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15. 6-3 Acceptances
GOALS
Discuss the requirements of an effective acceptance
Determine at what point in time an acceptance is effective
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16. WHAT IS REQUIRED OF AN ACCEPTANCE?
Only offerees may accept
The acceptance must match the offer
If terms aren’t identical, a counteroffer is created
Acceptance must be communicated to the offeror
Silence, bilateral, unilateral acceptance
Modes of contractual communication
When acceptances are effective
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17. WHAT IS REQUIRED OF AN ACCEPTANCE?
Acceptance must be communicated to the offeror
Modes of contractual communication
In person, telephone, fax, , text, etc.
Any reasonable means
When acceptances are effective
Acceptances are effective when SENT
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18. WHAT IS REQUIRED OF AN ACCEPTANCE?
Acceptance must be communicated to the offeror
Silence
Bilateral K – K’s in which the offer implies that it can be accepted by giving a promise instead of performing the contracted for act.
unilateral acceptances – require that the offeree indicates acceptance by performing his/her obligation
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19. WHAT IS REQUIRED OF AN ACCEPTANCE?
Acceptance must be communicated to the offeror
Modes of contractual communication
When acceptances are effective
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20. What are the requirements of an effective acceptance?
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21. PREVENT LEGAL DIFFICULTIES
When you seek to enter into a contract . . .
When negotiating, assume the worst and include terms in the contract addressing potential problems.
For important contracts, put offers and acceptances in writing. If either an offer or an acceptance is made orally, promptly confirm it in writing.
Obtain and keep a copy of every important document you sign.
Express your intentions in offers and acceptances with clear, complete, and understandable language.
Continued on the next slide
Chapter 6

22. PREVENT LEGAL DIFFICULTIES
Remember that the offeror may specify how and when the offer must be accepted. Otherwise the offeree may use the same means used by the offeror, a faster means, or other reasonable means.
When appropriate, buy an option, if one is available, to keep the offer open for as long as you need.
Remember that for an offeror to withdraw or revoke an offer, the offeree must receive notice. For speed, use the telephone, , or fax machine to withdraw or revoke an offer.
Chapter 6