Formation: Termination of Offers

Question 1

Five Types of Termination

Answer 1

1. Lapse of Time
2. Death/Mental Incapacity of Offeror
3. Destruction/Illegality
4. Revocation
5. Rejection by Offeree

Question 2

Definition: Lapse of Time

Answer 2

specified termination date or reasonable period of time if none stated

Question 3

Definition: Death/Mental Incapacity of Offeror

Answer 3

offer terminates, even if offeree does not learn of offeror’s death until after the offeree has sent what he believes is an acceptance

Question 4

Exception to Death/Mental Incapacity of Offeror

Answer 4

offers for option Ks do not terminate because consideration was paid to keep the option open

Question 5

Definition: Destruction/Illegality

Answer 5

offer terminated at the outset

Question 6

Definition: Revocation

Answer 6

offer can be revoked any time prior to acceptance (even if it states it will be open for a specific amount of time)

Question 7

Conditions for Revocation (2)

Answer 7

1. Not effective until communicated

2. Revocation sent by mail is not effective until received

Question 8

Four Types of Limitations on Revocation

Answer 8

1. Option K
2. UCC Firm Offer Rule
3. Promissory Estoppel
4. Partial Performance

Question 9

Limitations on Revocation: Option K

Answer 9

offeree must generally give consideration for option to be enforceable

Question 10

Limitations on Revocation: UCC Firm Offer Rule

Answer 10

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

Question 11

True or False: Consideration is necessary to keep an offer open under the UCC’s firm offer rule.

Answer 11

False.

Question 12

Limitations on Revocation: Promissory Estoppel

Answer 12

if offeree reasonably and detrimentally replies on offer it may become irrevocable

Question 13

Limitations on Revocation: Partial Performance

Answer 13

for all Ks, offeree must have knowledge of offer when performance begins

Question 14

Unilateral or Bilateral: offeror cannot revoke once offeree has begun performance.

Answer 14

Unilateral

Question 15

Unilateral or Bilateral: commencement of performance operates as promise to render complete performance

Answer 15

Bilateral

Question 16

Definition: Revocation of General Offers (to large number of people)

Answer 16

revocable only by notice given at least same level of publicity as offer (effective even if potential offer acts in reliance on offer)

Question 17

Definition: Rejection by Offeree

Answer 17

offeree clearly conveys to offeror that he no longer intends to accept the offer; usually effective upon receipt.

Question 18

True or False: A counteroffer acts as a rejection of the original offer and creates an entirely new offer.

Answer 18

True.