1. Chapter 7 Offer and Acceptance

2. Contracts zAn agreement that courts will enforce. zContracts between two parties re the basis for all economic activity. zContracts are the legal links between individuals & companies producing & consuming goods and services.

3. 6 Requirements of a Contract z1) Offer & Acceptance yThere must be a serious, definite offer. yThe terms of the offer can be accepted only by the party to whom it was communicated. z 2) Genuine Assent yThe agreement must not be based on one party’s deceiving another, on an important mistake, or unfair pressure.

4. 6 Requirements of a Contract z3) Legality yWhat the parties agree to must be legal. z 4) Consideration yThe agreement must involve both sides receiving something of legal value as a result of the transaction.

5. 6 Requirements of a Contract z5) Capacity yThe parties must be able to contract for themselves. yNo minors, mentally ill, etc. z 6) Writing ySome agreement must be placed in writing to be fully enforceable in court.

6. Offeror vs. Offerees zOfferor - Makes the offer. z Offeree - Person to whom the offer is made.

7. Requirements of an Offer zAn offer is a proposal by an offeror to do something provided the offeree does something in return. zTo be an offer y1. Offeror must appear to intend to create legal obligation. y2. Terms must be definite and complete. y3. Offer must be communicated to the offeree.

8. Offeror must appear to intend to create legal obligation zTest of reasonable person applies -objective, legal test used by jurors/judges zPreliminary negotiations are not intent to contract zHow about social agreements?

9. Offer must be definite & complete zGenerally advertisements are not offers. They are invitations to customers to make offers. Adv CAN be an offer if: 1.Clearly worded in ways that address the problem of numerous people wanting to buy limited product…”subject to stock” OR 2.If it asks the offeree to perform an act as a way of accepting…”first 20 at door”

10. Offer must be Communicated to the Offeree zRead “a question of ethics” on pg 101 zA person who is not the intended offeree cannot accept the offer.

11. Assignment zThink About Legal Concepts 1-9 zThink Critically about Evidence 10-13 Page 102

12. Lesson 7-2 Termination of Offers Read “What’s Your Verdict” on page 103

13. Revocation by the Offeror zRevocation - The right to withdraw an offer before it is accepted. zAfter an offer has been made, the offeror can generally revoke it anytime before it is accepted by the offeree.

14. Ending Offers zTime stated in the offer. zReasonable length of time. zRejection by the offeree. zCounteroffer - Refusing the offer and making a new proposal. zDeath or insanity of either the offeror of offeree.

15. How can an offer be kept open? zOptions = yGive the offeror something of value in return for a promise to keep the offer open. yThe offer may not be withdrawn during the option period. yRead “What’s Your Verdict” on page 104

16. How can an offer be kept open? zFirm Offer - A offer by a merchant for the sale or purchase of goods stating in writing how long the option stays open. yDoes not end with death or insanity. yRead “In This Case” on page 104

17. Assignment zThink About Legal Concepts 1-11 zThink Critically about Evidence 12-15 Page 105

18. Lesson 7-3 Acceptance

19. Acceptances z1) Must be made by the person or persons to whom the offer was made. z2) Must match the terms in the offer. Mirror image rule —if terms in acceptance don’t exactly match offer, it is a counteroffer. Proposal—new or changed terms in some cases with sale of goods….NOT part of the contract unless agreed to by the original offeror OR unless parties are both merchants (not consumers).

20. Acceptances … cont z3) Must be communicated to the offeror; cannot be just a mental decision. Can silence be an acceptance? Only if parties have agreed in advance, such as book clubs

21. Unilateral Contracts zAcceptance is indicated by performing his/her obligations. zExample: Reward $ for lost dog Once the offeree has begun performance of the act requested (look for lost dog), the offer cannot be revoked until a reasonable amount of time has passed.

22. Bilateral Acceptance zMost offers are bilateral. zThe offer is accepted by a promise to perform an act. zExample: I will pay you $50 to scoop my driveway.

23. Effective Acceptance May be communicated orally, in person, or by telephone. All forms of contractual communications but one take effect when received. (When mail is received not sent). The exception to this is the acceptance, which is effective when sent. zThe offeror may require a certain type of acceptance. Examples—oral, hand signals, mail, fax.

24. Assignment zThink About Legal Concepts 1-5 page 108 zThink Critically about Evidence 6 & 7 page 109 zYour Legal Vocabulary 1-10 page 110