OFFER & ACCEPTANCE

OFFER & ACCEPTANCE Mr. Calkins Spring 2008

OFFER & ACCEPTANCE • CREATION OF OFFERS • TERMINATION OF OFFERS • ACCEPTANCES

OFFER & ACCEPTANCE“CREATION OF OFFERS” • CONTRACT—is an agreement between two or more parties that creates obligations.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 1) Offer and Acceptance—theremust be an offer to contract. The person who makes the offer is the “offeror” the person who accepts the contract is the “offeree”.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 2) Genuine Assent—theagreement must not be made on one party decieving the other.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 3) LEGALITY—the parties agree to must be legal. An agreement to pay someone to commit a crime cannot be a legal contract.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 4) CONSIDERATION—an agreement must involve both sides receiving something of legal value as a result of the transaction.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 5) CAPACITY—to have a completely enforceable agreement the parties involved must be able to contract for themselves. Rather than being forced to use parent’s or legal representation. If one of the parties is under the age of 18 the contract is “voidable”.

OFFER & ACCEPTANCE“CREATION OF OFFERS” 6 MAJOR REQUIREMENTS TO ENFORCE A CONTRACT 6) WRITING—someagreements must be in writing to be fully enforceable in court.

OFFER & ACCEPTANCE“CREATION OF OFFERS” CONTRACTUAL INTENT MUST BE PRESENT JESTS—the law is not concerned with what is actually in the mind of a person making an offer. It is more concerned with appearance of the action. If you think you are joking but a “reasonable” person would assume that you are offering a contract it would be so. On the other hand if a “reasonable” person would believe that you are joking it would be viewed as such.

OFFER & ACCEPTANCE“CREATION OF OFFERS” CONTRACTUAL INTENT MUST BE PRESENT STATEMENTS MADE IN ANGER—a person yelling at someone to offer $100 for someone stealing their purse isn’t considered a valid offer. Therefore if someone ran after the thief and expected payment there is not requirement to do so.

OFFER & ACCEPTANCE“CREATION OF OFFERS” CONTRACTUAL INTENT MUST BE PRESENT PRELIMINARY NEGOTIATIONS—information often is communicated to induce someone to begin bargaining. These are not seen as an intent to contract. These are beginning talks in a process that are non-binding until a formal offer has taken place.

OFFER & ACCEPTANCE“CREATION OF OFFERS” CONTRACTUAL INTENT MUST BE PRESENT • SOCIAL AGREEMENTS–if a pair of friends agree to go to a movie it isn’t deemed a contract. Neither friend thinks of this as a legal binding agreement. If the date is broken those involved may be offended but may not file a law suit for breach of contract.

OFFER & ACCEPTANCE“CREATION OF OFFERS” ESSENTIAL TERMS MUST BE COMPLETE AND DEFINITIVE 1) Identity of the specific lot 2) Price agreed upon 3) Full terms of payment involved. 4) Date for delivery of possession. 5) Date for delivery of the deed.

OFFER & ACCEPTANCE“ACCEPTANCES” REQUIREMENTS OF ACCEPTANCE • COME FROM THE PERSON OR PERSONS TO WHOM OFFER WAS MADE. • MATCH THE TERMS OF OFFER. • BE COMMUNICATED TO THE OFFEROR.

OFFER & ACCEPTANCE“ACCEPTANCES” ONLY OFFEREES MAY ACCEPT–an offer made from one person to another may NOT be accepted by another. In some cases an offer is made to a “group” in this case the offer may be accepted by another member of the group.

OFFER & ACCEPTANCE“ACCEPTANCES” ACCEPTANCE MUST MATCH OFFER–the “mirror image” rule requires that acceptance must exactly match the terms contained in the offer. 1)If a party is a consumer not a merchant then new or changed terms are merely proposal an not part of the contract. 2) If both parties are merchants new or changed terms are not part of the contract of the original offer objects. Or in absence of objection terms are material. 3) When parties are merchants new or changes terms of the contract if the original offeror is silent and terms are thus minor.

OFFER & ACCEPTANCE“ACCEPTANCES” ACCEPTANCE MUST BE COMMUNICATED TO OFFEROR. When parties are merchants new or changes terms of the contract if the original offeror is silent and terms are thus minor.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” TERMS THAT OFFERS CAN END • REVOCATION BY THE OFFEROR • TIME STATED IN THE OFFER • REASONABLE LENGTH OF TIME • REJECTION BY THE OFFEREE • COUNTEROFFER • DEATH OR INSANITY OF EITHER • DESTRUCTION OF THE SUBJECT MATTER

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • REVOCATION BY THE OFFEROR: After an offer has been made the offeror can generally revoke it anytime before it is accepted by the offeree. This is true even if the offeror promised that the offer would remain open for a particular period. A “revocation” is not effective until communicated to the offeree.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • TIME STATED IN THE OFFER: In making an offer the offeror may state how and when the offer must be accepted. Example: If Mr. Bigg applied for a loan for $50,000 on Oct. 1. And then Gimme—Cash Bank offered to lend on specified terms and specified that the acceptance must take place before October 15. Mr. Bigg didn’t mail in an acceptance until October 17 which Gimme Cash Bank didn’t receive until October 20 the offer had expired.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • REASONABLE LENGTH OF TIME • When nothing is stated in the offer about how long it will remain open, it ends after a reasonable length of time. What a reasonable length of time depends on the circumstances. Example: If a Produce Wholesaler in New Jersey telephones a customer in Florida offering to sell a truckload of oranges if the offer isn’t accepted the contract will terminate. The seller understands that there may be contact with many buyers so that they must respond quickly to assure their product.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • REJECTION BY THE OFFEREE • When the offeree clearly rejects the offer, the offer is terminated. Unless this offer is renewed by the offeree. Any rejection of the first offer nullifies the offeror’s obligation at that point.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • COUNTEROFFER • Normally an offeree accepting terms must accept the offer as it was exactly made. However if the offeree changes the terms of the offeror and submits it back to them this is called a counteroffer. In making a counteroffer basically (legally) offeree is saying in effect I refuse your offer but I will accept these exceptions to it that I have stated forth.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • DEATH OR INSANITY • Contracts are agreements made and entered into by the parties subject to their control. If someone dies or insanity happens this eliminates control of it being fulfilled. Therefore civil law intervenes when either party can no longer fulfill their obligation and terminates their offers.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” • DESTRUCTION OF SUBJECT MATTER • In the event of the item involved in an offer the offer becomes terminated immediately. Example: Billy-bob agrees to purchase a 1968 Camaro from Jill’s City Slicker Car’s for $3000. The evening prior to picking up the vehicle a storm blows through and a tree is uprooted and lands on the car totalling it. Neither party is held to the terms of the offer based on this.

OFFER & ACCEPTANCE“TERMINATION OF OFFERS” HOW AN OFFER CAN BE KEPT OPEN OPTIONS—if the offeree gives the offeror something of value in return for a promise to keep the offer open, this agreement itself is a binding, legal agreement. FIRM OFFERS– an offer which contains terms stating how long it is to stay open and for how much.

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” REQUIRMENT OF AN ACCEPTANCE • ONLY OFFEREES MAY ACCEPT • THE ACCEPTANCE MUST MATCH THE OFFER • ACCEPTANCE COMMUNICATED TO OFFEROR

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” ONLY OFFEREES MAY ACCEPT An offer made to another person may not be accepted by another. Sometimes however an offer which is made to a particular group such as an agency the offer may/may not be accepted by the group involved.

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” ACCEPTANCE MUST MATCH OFFER The “mirror-image” rule states that the acceptance must exactly match the terms contained in the offer. If an attempted acceptance is altered in any way it becomes a “counteroffer”.

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” ACCEPTANCE MUST BE COMMUNICATED TO THE OFFEROR • SILENCE AS ACCEPTANCE • BILATERAL ACCEPTANCE • UNILATERAL ACCEPTANCE

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” SILENCE AS ACCEPTANCE One it not obligated to reply to offers made by others. An offeror’s attempt to word the offer so that silence would appear to be an acceptance will not work. No contract would result from such a case.

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” • BILATERAL ACCEPTANCE • Most offers are bilateral meaning the offer implies that it can be accepted by giving a promise instead of performing a contract for an act. These contracts require that the offeree accept by communicating the requested promise to the offeror.

OFFER & ACCEPTANCE“ACCEPTANCE OF OFFERS” • UNILATERAL ACCEPTANCE • The offeror in a unilateral promises something in return for the offeree’s performance and indicates that this performance is the way acceptance is to be made.

OFFER & ACCEPTANCE