Consent - Offer Flashcards
Consent - defined
“A contract is formed by the consent of the parties established through offer and acceptance. Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent.
Unless otherwise specified in the offer, there need not be conformity between the manner in which the offer is made and the manner in which the acceptance is made.” (La. Civ. Code art. 1927)
Offer - defined
An offer is “a unilateral declaration of will that a person—the offeror—addresses to another—the offeree—whereby the former proposed to the latter the conclusion of a contract.”
5 Prerequisites are to be satisfied for a communication to be deemed an offer, according to Yiannopolis:
Declared
Meaning that it is communicated, “projected outward”
Directed to the person with whom the offeror intends to contract
But not necessarily express (can be implied or tacit).
Indicative of Intent to be Legally Bound
As opposed to socially or morally bound.
Serious
Not made in jest
Precise and Complete
Must contain essential terms of the contemplated contract such that the contract can be concluded by the offeree’s consent.
Firm
Must be indicative of offeror’s intent to conclude the contract with the offeree’s assent i.e. not a mere invitation to negotiate.
Indicates an intent to be bound through the offeree’s assent, NOT firm in the sense of the common law (irrevocable).
Revocability of the Offer
General Rule: Revocable—“An offer not irrevocable under Civil Code Article 1928 may be revoked before it is accepted.” (La. Civ. Code art. 1930)
What this means is that offers are revocable unless they meet the requirements for irrevocability specified in article 1928.
a. When Revocation is Effective—“A revocation of a revocable offer is effective when received by the offeree prior to acceptance.” (La. Civ. Code art. 1937)
b. Meaning of Reception—“A written revocation, rejection, or acceptance is received when it comes into possession of the addressee or of a person authorized by him to receive it, or when it is deposited in a place the addressee has indicated as a place for this or similar communications to be deposited for him.” (La. Civ. Code art. 1938). Does “receipt” require that the offeree have actual knowledge of the revocation? See comment (b). This article speaks only to “written” communications. When is a revocation by email effective? A revocation by voice mail?
Irrevocability
a. Definition—“An offer that specifies a period of time for acceptance is irrevocable during that time. When the offeror manifests an intent to give the offeree a delay within which to accept, without specifying a time, the offer is irrevocable for a reasonable time.” (La. Civ. Code art. 1928)
b. Types
i. Express—Anaya offers to sell her car to Betty for $2,000. Anaya gives Betty until January 31 to act on the offer. This offer is irrevocable. Variation: Anaya tells Betty, “take some time to think it over and get back to me,” without specifying a precise date. This offer is also irrevocable.
ii. Implied—W.M. Heroman & Co., Inc. v. Saia Electric, Inc., 346 So. 2d 827 (La. App. 1 Cir. 1977)—Saia (a Subcontractor) submitted a bid to do electrical work on a construction project. Read carefully the recitation of facts detailing the negotiations and efforts of the parties leading up to the submission of the bid by the General Contractor to the Owner. Was Saia’s bid an irrevocable offer? Why or why not?
Duration of the Offer
a. Specified—Anaya offers to sell her car to Betty for $2,000. If Anaya gives Betty until January 31, the offer is irrevocable and the delay within which Betty must act is specified.
b. Unspecified—If Anaya says “take some time to think it over and get back to me,” the duration of irrevocability is a “reasonable time.” What is a “reasonable time” for acceptance? Consider general physical constraints on communication, including the distance of or barriers to communication between the parties, trade usages, past dealings, and the nature of the contract.
Express revocability without an end point
Schulingkamp v. Aiklen
The offer is expressly irrevocable “until the act of sale”
Since the timing of the “act of sale” is indefinite, the offer is irrevocable for a “reasonable time”
Meyers v. Burger King Corp
The offer is expressly irrevocable “for at least 45 days”
The offer is irrevocable for 45 days plus a “reasonable time” thereafter.
Expiration of the Offer
a. Lapse of Time
i. Irrevocable—“An irrevocable offer expires if not accepted within the time prescribed in the preceding article.” (La. Civ. Code art. 1929) Note: An irrevocable offer does not merely become revocable after the period for irrevocability has passed. Instead, upon lapse of the period of irrevocability, the offer expires.
HYPO: Anaya offers to sell her car to Betty for $2,000. Anaya gives Betty until January 31 to accept. On February 1, Betty attempts to accept the offer. Anaya never revoked her initial offer. Is there a binding contract?
ii. Revocable—“A revocable offer expires if not accepted within a reasonable time.” What is a “reasonable time” for acceptance? Consider general physical constraints on communication, including the distance of or barriers to communication between the parties, trade usages, past dealings, and the nature of the contract.
HYPO: On February 1, Anaya offers to sell her car to Betty for $2,000. Anaya does not specify a time within which Betty can accept, nor does she indicate in any other way that the offer is irrevocable. If Betty does not respond until March 1, is her acceptance timely? Or has the offer expired?
b. Death or Incapacity—“An offer expires by the death or incapacity of the offeror or the offeree before it has expired.” (La. Civ. Code art. 1932)
If a person somehow becomes incapable, their agent can NOT accept the offer!
Heirs cannot except existing offers either!
c. Rejection and Counteroffer—Although not clearly specified in the Civil Code, legal doctrine makes clear that a rejection brings an end to an offer. A counteroffer, because it implies rejection of the original offer, also brings an end to the offer.
Option Contracts - In General
(i) In General—“An option is a contract whereby the parties agree that the offeror is bound by his offer for a specified period of time and that the offeree may accept within that time.” (La. Civ. Code art. 1933) In what ways does an option differ from an irrevocable offer? What is the significance of the fact that the option is a “contract”? Consider the following: a. Heritability (see La. Civ. Code art. 1765–66) and b. Required Term (see La. Civ. Code art. 2628)
Option to Buy or Sell
(ii) Option to Buy or Sell
a. Definition—“An option to buy, or an option to sell, is a contract whereby a person gives to another the right to accept an offer to sell, or to buy, a thing within a stipulated time. An option must set forth the thing and the price and meet the formal requirements of the sale it contemplates.” (La. Civ. Code art. 2620)
HYPO: Anaya and Betty agree that Betty will have the option to purchase Anaya’s house for $250,000 any time within the next year. What is the required form for this contract? What right does Betty have if, 6 months after this agreement is made, Anaya agrees to sell her house to Carl for $350,000?
This is a valid option
There is a definite time, a price set, and a form (writing). There does not need to be a consideration as is seen in the common law.
If either dies or is incapacitated, that option is heritable and transferrable.
b. Acceptance/Rejection—“The acceptance or rejection of an offer contained in an option is effective when received by the grantor. Upon such an acceptance, the parties are bound by a contract to sell. Rejection of the offer contained in an option terminates the offer but a counteroffer does not.” (La. Civ. Code art. 2621).
