Offer Flashcards
Rule
An offer is an expression of willingness to enter into a bargain made in such a way that the other party could reasonably believe that they could conclude the bargain by accepting. An offer must therefore show intent to enter into a bargain and must have definite terms.
Offer or Preliminary Negotiation?
LANGUAGE: “I offer” or “I promise” is obviously an offer, “I quote” or “I am asking for” or “I would consider selling for” are invitations to bargain
Advertisements are generally NOT considered offers, just invitations or solicitations of offers
Courts look at the prior dealing between the parties
Requirements for Real Estate Offers
Must identify the land and price
Requirements for Offer for Sale of Goods
Quantity must be certain, or capable of being made certain
REQUIREMENTS/OUTPUT CONTRACTS:
Cannot be a demand for a quantity unreasonably disproportionate to (1) any stated estimate, or (2) any normal or comparable prior outputs
Requirements for Offer for Employment
If the duration of the employment relationship is not specified, the resulting contract is terminable at the will of either party.
Other service contracts, the nature of the work performed must be included
Effect of Missing Terms in an Offer
Does not prevent contract formation if:
(1) It appears the parties intended to make a contract
(2) There is a reasonably certain basis for giving a remedy
If so, the court can supply REASONABLE terms for those missing
Effect of Vague Terms in an Offer
The presumption that the parties intended to include a reasonable term CANNOT be made if the parties have included a vague term that makes the contract unenforceable.
HOWEVER, this uncertainty can be cured by:
- Part performance (clarifies the vague term)
- Acceptance
- Full performance
Terms to be agreed upon later
If the term is a material term, the offer is too uncertain
Communicating the offer to the offeree
Offeree must have knowledge of the offer
Ways to Terminate an Offer
By the Offeree:
- Lapse of Time
- Rejection (Express, Counteroffer, Conditional Acceptance)
By Offeror:
- Revocation (effective when RECIEVED)
Limitations of Offeror’s Power to Revoke
- Option Contracts
- Merchant’s Firm Offer
- Detrimental Reliance
- Beginning Performance of a Unilateral Contract
- Beginning Performance where form of acceptance not included (but notification may be required)
Termination by Operation of Law
- Death
- Destruction of subject matter
- Supervening Illegalit
Termination of an Offer by Lapse of Time
Offer will be terminated by offeree’s failure to accept within the stated time OR within a reasonable time
Rejection of an Offer
Express (Statement by offeree that they do not want to accept the offer)
Counteroffers are rejections (but mere inquiries are not- would a reasonable person would have believed that the original offer had been rejected)
Conditional Acceptance is a rejection of the original offer and creates a new offer (with the condition becoming a new term)
- Cannot accept this new offer by performance
- BUT can ship or accept goods (K formed by their conduct)
When is a rejection effective
When it is received by the offeror
Revocation
Can be done by directly communicating to offeree
Can be done indirectly if the offeree receives:
(1) correct information from a reliable source
(2) of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer
When is a revocation effective
When it is received by the offeree (or when published by comparable means)
Revoking an Option Contract
Option: When offeree gives consideration for a promise not to revoke an outstanding offer
Offeror cannot revoke if consideration is given to keep the option open
Revoking a Merchant’s Firm Offer
If a MERCHANT offers to buy or sell goods in a signed writing, and the writing gives assurances that the offer will be held open, the offer is not revocable for lack of consideration during the stated time (or, if no time stated, a reasonable time not exceeding three months)
Effect of Detrimental Reliance of Offeror’s Ability to Revoke
If the offeror could reasonably expect the offeree to rely to their detriment on the offer, and the offeree does so rely, then the offer is irrevocable for a reasonable length of time
Revocation Once Performance has Begun: Unilateral Contracts
A unilateral contract becomes irrevocable once performance has begun. The offeror must give the offeree a reasonable time to complete performance.
- Offeree is not bound to complete performance
- Preparations to perform do not count as performance
Revocation Once Performance has Begun: No Method of Acceptance Contemplated
Bilateral contracts may be formed once performance begins if the offer is indifferent as to the manner of acceptance.
HOWEVER: notification of the start of performance may be necessary.
Offers Terminated by Operation of Law
Death or Insanity
Destruction
Supervening Illegality
