Formation: Termination of Offers Flashcards
Five Types of Termination
- Lapse of Time
- Death/Mental Incapacity of Offeror
- Destruction/Illegality
- Revocation
- Rejection by Offeree
Definition: Lapse of Time
specified termination date or reasonable period of time if none stated
Definition: Death/Mental Incapacity of Offeror
offer terminates, even if offeree does not learn of offeror’s death until after the offeree has sent what he believes is an acceptance
Exception to Death/Mental Incapacity of Offeror
offers for option Ks do not terminate because consideration was paid to keep the option open
Definition: Destruction/Illegality
offer terminated at the outset
Definition: Revocation
offer can be revoked any time prior to acceptance (even if it states it will be open for a specific amount of time)
Conditions for Revocation (2)
- Not effective until communicated
2. Revocation sent by mail is not effective until received
Four Types of Limitations on Revocation
- Option K
- UCC Firm Offer Rule
- Promissory Estoppel
- Partial Performance
Limitations on Revocation: Option K
offeree must generally give consideration for option to be enforceable
Limitations on Revocation: UCC Firm Offer Rule
offer irrevocable (for reasonable time but no more than three months) if offeror is a merchant (for any business person), and assurances (in authenticated writing) are made that offer will remain open
True or False: Consideration is necessary to keep an offer open under the UCC’s firm offer rule.
False.
Limitations on Revocation: Promissory Estoppel
if offeree reasonably and detrimentally replies on offer it may become irrevocable
Limitations on Revocation: Partial Performance
for all Ks, offeree must have knowledge of offer when performance begins
Unilateral or Bilateral: offeror cannot revoke once offeree has begun performance.
Unilateral
Unilateral or Bilateral: commencement of performance operates as promise to render complete performance
Bilateral
Definition: Revocation of General Offers (to large number of people)
revocable only by notice given at least same level of publicity as offer (effective even if potential offer acts in reliance on offer)
Definition: Rejection by Offeree
offeree clearly conveys to offeror that he no longer intends to accept the offer; usually effective upon receipt.
True or False: A counteroffer acts as a rejection of the original offer and creates an entirely new offer.
True.
