2. Chapter 5—Section 2 Offer and Acceptance

3. I. Requirements of an Offer A. Must be made seriously 1.An offer must be made with the intention of entering into a legal contract 2.Offers are sometimes confused with an invitation to negotiate a.Newspaper advertisements, magazines, and catalogs, price tags, window signs b.Advertisements can be considered offers when they contain specific promises or limit the number of items that will be sold

4. B. Definite and Certain Contracts cannot be enforced if language such as “a share” or “a reasonable amount” is used. The terms must be specific. C. Communicated to the offeree The offeree must know about the offer in order to enforce the contract.

5. II. Requirements of an Acceptance A. Acceptance must be unconditional 1.Cannot change the terms of the offer— mirror image rule 2.If the terms are changed it is considered a counteroffer B.Must follow the rules regarding the method of acceptance 1.A contract comes into existence when acceptance takes place. 2.Special rules apply for parties that are separated by distance or communicating by letter, telegrams, or fax.

6. 3.An offer can specify that it must be accepted by an action 4.An offer cannot use silence as a means of acceptance unless it has been agreed on or used in the past. The person accepting the offer can use silence as an acceptance a.An acceptance sent over long distances is effective when it is sent. b.If address is faulty the acceptance is not complete until delivery c.The offerer can specify a method and a time that it must be received.

7. III. Termination of an Offer An offer can be terminated in 5 ways: 1.Revocation—the offer must be withdrawn before it is accepted. It becomes effective when the offeree receives it or is notified. 2.Rejection—if the offeree refuses the offer is no longer valid. 3.Counteroffer—ends the original offer and begins a new one. 4.Expiration of time—only if the offeror sets a time limit. 5.Death or Insanity—ends the offer, but does not end contracts, except for personal services.