1. B USINESS L AW II Methods: Termination of an Offer

2. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer 1.An offer can be revoked at any time without liability unless the offer is irrevocable. 2.Option contracts, merchants’ firm offers, and, in some circumstances, the promissory estoppel theory render offers irrevocable. Revocation: (3)

3. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer 3.Except for public offers, revocation is not effective until received by the offeree or the offeree’s authorized agent. Revocation: (3)

4. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer

5. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer Rejection: (2)

6. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer 1.Rejection of an offer is accomplished by words or actions that demonstrate a clear intent not to accept the offer or consider the offer further. Inquiries about an offer do not constitute a rejection. 2.A rejection is not effective until received by the offeror or an authorized agent of the offeror. Rejection: (2)

7. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer

8. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer Counteroffer

9. By the Acts of the Parties B USINESS L AW II Methods: Termination of an Offer A counteroffer is a rejection of the original offer and the making of a new offer. Inquiries are not rejections. Counteroffer

10. B USINESS L AW II Methods: Termination of an Offer

11. By Operation of Law B USINESS L AW II Methods: Termination of an Offer

12. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Lapse of Time (2)

13. By Operation of Law B USINESS L AW II Methods: Termination of an Offer 1.If a time period for acceptance is stated in the offer, the offer ends at the stated time. 2.If no time period for acceptance is stated, the offer terminates at the end of a reasonable period. Lapse of Time (2)

14. By Operation of Law B USINESS L AW II Methods: Termination of an Offer

15. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Destruction

16. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Destruction of the specific subject matter of the offer terminates the offer. Destruction

17. By Operation of Law B USINESS L AW II Methods: Termination of an Offer

18. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Death or Incompetence

19. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Death of incompetence of either the offeror or the offeree terminates an offer, unless the offer is irrevocable. Death or Incompetence

20. By Operation of Law B USINESS L AW II Methods: Termination of an Offer

21. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Illegality

22. By Operation of Law B USINESS L AW II Methods: Termination of an Offer Supervening illegality terminates an offer. Illegality

23. Consideration The value given in return for a promise 1.Something of legal value a.May be a promise b.May be performance i.An act ii.A Forbearance iii.Creation, modification or destruction of a legal relation 2.Must be a Bargained-for exchange

24. Legal Sufficiency of Consideration Legally detrimental to the promisee Legally beneficial to the promisor –Hamer v. Sidway 1891

25. Adequacy of Consideration Freedom to enter bad deals Courts don’t normally inquire –Except When inadequacy indicates fraud, duress, undue influence, lack of bargained-for exchange, incompetence –Adhesion contract – unequal bargaining power –Unconscionability

26. K’s Lacking Consideration Preexisting duty –Building a pool- no holdups or extortion –Contra: unforeseen difficulties –Rescission Past consideration or donative promises

27. Problem Areas Uncertain performance = illusory –No bargaining, solely on one side’s discretion, reservation of unfettered right to terminate –Except: requirements and output contracts Settlement of claims –Accord and Satisfaction between debtor and creditor Debt must be in dispute –Contra: unliquidated debt ES Herrick v. Maine Wild Blueberry Co.

28. Settlement of Claims Release –No further liability Bennett v. Shinoda Floral, Inc. 1.Must be given in good faith 2.Stated in a signed writing 3.Accompanied by consideration Covenant Not to Sue –Further liability possible

29. Promises Enforceable Without Consideration Promise to pay debt barred by a SOL Detrimental Reliance, or promissory estoppel –Matherne Coontractor, Inc. v. Grinnell Fire Protection –Must have a clear/definite promise –Promisee must justifiably rely –Reliance must be substantial/definite –Justice will be served by enforcement Charitable subscriptions

30. Definition of Consideration B USINESS L AW II Consideration

31. Definition of Consideration Consideration is the value given in exchange for a promise. A contract cannot be formed without sufficient consideration. Consideration consists of three elements.... B USINESS L AW II Consideration

32. B USINESS L AW II Consideration

33. Three Elements of Consideration B USINESS L AW II Consideration

34. Three Elements of Consideration B USINESS L AW II 1.Legal value – Something of legal value must be given in exchange for a promise. In addition to money, value may be an act, a forbearance, a change in a legal relation, or a promise. 2.Bargained-for exchange – there must be bargained-for exchange. Consideration

35. Three Elements of Consideration B USINESS L AW II 3.Legal sufficiency – Consideration must be legally sufficient. Consideration

36. B USINESS L AW II Consideration

37. Legal Sufficiency of Consideration B USINESS L AW II Consideration

38. Legal Sufficiency of Consideration B USINESS L AW II To be legally sufficient, consideration must be either legally detrimental to the promisee (the one to whom the promise is made) or legally beneficial to the promisor (the one making the promise). Doing something, promising to do something, forbearing from doing something, or promising to forbear from doing something that one is otherwise entitled to do is legally sufficient consideration to bind another’s promise. Consideration

39. Legal Sufficiency of Consideration B USINESS L AW II Consideration

40. Legal Sufficiency of Consideration B USINESS L AW II The following types of promises normally are not enforceable because they lack sufficient consideration: 1.A promise to perform a preexisting duty. 2.A promise to perform an act that has already been performed (past consideration). Consideration

41. B USINESS L AW II Consideration

42. Adequacy of Consideration B USINESS L AW II Consideration

43. Adequacy of Consideration Adequacy of consideration relates to how much consideration is given and whether a fair bargain was reached. Courts will inquire into the adequacy of consideration (if the consideration is legally sufficient) only when fraud, undue influence, duress, or unconscionability may be involved. B USINESS L AW II Consideration

45. End of Consideration

48. End of Methods by Which an Offer Can Be Terminated