Formation - Offer and Acceptance

Question 1

When are advertisements considered offers?

Answer 1

Advertisements are generally not offers unless they only invite acceptance.

Question 2

How is present intent (objective intent) measured?

Answer 2

Measured by a reasonable person’s interpretation of the circumstances.

Question 3

List the requirements of an offer.

Answer 3

• Present intent to contract
• Definite terms
• Communication of offer

Question 4

List the ways an offer can be terminated by the act of the parties to the offer.

Answer 4

• Revocation
• Rejection
• Counteroffer

Question 5

When are preliminary negotiations considered offers?

Answer 5

Preliminary negotiations are generally not offers unless such negotiations include price lists, solicitation of bids, and auctions with reserve.

Question 6

List the three types of irrevocable offers.

Answer 6

• Options
• Sales of goods firm offers
• Offers irrevocable by estoppel

Question 7

Describe the general rule of revocation

Answer 7

An offer can be revoked at any time before acceptance unless the offer is irrevocable.

Question 8

List the requirements of a firm offer for the sales of goods.

Answer 8

• Offeror is a merchant
• Offeror is an authenticated record.
• Assures offer will remain open for a stated period of time (without consideration not to exceed three months, regardless).

Question 9

When is the revocation of a public offer effective?

Answer 9

It is effective if made in the same medium as the offer.

Question 10

When is revocation by the offeror effective?

Answer 10

When the offer knows of or receives the revocation.

Question 11

Define “option contract”.

Answer 11

An option contract is a distinct contract in which the offer give consideration keep the offer open.

Question 12

When does the acceptance of an unilateral offer occur?

Answer 12

It takes place upon completion of the act required by the offeror.

Question 13

List the ways in which an offer can be terminated by operation of law.

Answer 13

• Lapse of time
• Death or insanity of either party (unless offer is irrevocable)
• destruction of the specific subject matter of the contract
• Intervening illegality

Question 14

Describe an expressly authorized or stipulated means of communication.

Answer 14

A means of communicating acceptance that is expressly stipulated in the offer.

Question 15

What conditions must exist for the acceptance of a bilateral offer to take place?

Answer 15

Acceptance must be unequivocal and communicated to the offeror.

Question 16

When is an acceptance of an offer effective?

Answer 16

• If sent by authorized medium: effective when delivered to the medium
• If sent by unauthorized medium: effective when received by offeror, provided that the offer is still open.

Question 17

Can silence be considered a form of acceptance to an offer?

Answer 17

Generally it is not acceptance unless the offer’s actions indicate an attempt to accept or the offer has the duty to reject.

Question 18

Describe the mirror-image rule regarding acceptance of an offer.

Answer 18

Acceptance must be absolute, unequivocal, and unconditional. In common law, if the acceptance is not a mirror image of the offer’s terms, it is a rejection and counteroffer.

Question 19

Describe the requirements of an offer.

Answer 19

• Objective intent to contract
• Under common law: subject matter, price, payment terms, time for performance, and so on
• Under the UCC: subject matter and quantity if more than one
• UCC will supply the remaining terms if not in the offer.