1. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 6 Offer and Acceptance 6-1 6-1Creation of Offers 6-2 6-2Termination of Offers 6-3 6-3Acceptances

2. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 2 6-1Creation of Offers GOALS List the elements required to form a contract Describe the requirements of an offer Introduction to Contract Law

3. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 3 REQUIREMENTS OF A LEGALLY ENFORCEABLE CONTRACT Offer and acceptance: contract must have an offeror and an offeree. Genuine assent: agreement by both parties. Legality: terms of contract be of a legal nature. Consideration: what is exchanged for promise. Capacity: must have legal ability to contract. Proper form: certain agreements must be in writing. Contract law songs

4. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 4 NATURE AND CLASSES OF CONTRACTS Class 1:  Executed contracts: all promises met.  Executory contracts: something remains. Class 2:  Express Contracts: terms expressly stated.  Implied-in-fact Contracts: terms are inferred.  Implied-at-law (quasi) Contracts: allows enforcement. Class 3:  Unilateral contracts: promises something in return for performance.  Bilateral contracts: mutual exchange

5. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 5 REQUIREMENTS OF AN OFFER Contractual intent must be present Jests Statements made in anger or terror Preliminary negotiations Social agreements Offer must be communicated to the offeree Essential terms must be complete and definite

6. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 6 6-2Termination of Offers GOALS Describe the various ways to end offers Explain how an offeree can ensure an offer will remain open Roommate Contract

7. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 7 HOW CAN OFFERS BE ENDED? Revocation by the offeror Time stated in the offer Reasonable length of time Rejection by the offeree Counteroffer My Cousin Vinnie My Cousin Vinnie Death or insanity of either the offeror or offeree Destruction of the specific subject matter

8. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 8 HOW CAN AN OFFER BE KEPT OPEN? Options: offeree gives offeror consideration in return to keep offer open. Firm offers: offer made in writing, stating how long offer is to stay open.

9. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 9 6-3Acceptances GOALS Discuss the requirements of an effective acceptance Determine at what point in time an acceptance is effective

10. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 10 WHAT IS REQUIRED OF AN ACCEPTANCE? Acceptance must come from the person or persons to whom the offer was made. The acceptance must match the offer.

11. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 11 WHAT IS REQUIRED OF AN ACCEPTANCE? Acceptance must be communicated to the offeror: Silence as acceptance Promises as acceptance Performance as acceptance Modes of contractual communication When acceptances are effective

12. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 12 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

13. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 SLIDE 13 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, e-mail, or fax machine to withdraw or revoke an offer.