Offer

Question 1

What are the elements of an offer?

Answer 1

1. An offer must be communicated to the person to whom it’s addressed. 2. The offer must indicate a desire to enter into a contract. 3. The offer must be directed to a person or a group of persons. 4. The offer must invite acceptance. 5. The offer must create a reasonable understanding that upon acceptance a contract will arise without any further approval being required from the offeror.

Question 2

What is the definition of an option contract?

Answer 2

The right, which is supported by consideration, to make an offer irrevocable for a certain period of time.

Question 3

How can an option contract be created?

Answer 3

1. A promise to hold the offer open that is supported by consideration. 2. A ‘firm offer’ under Article 2 of the UCC, must be in writing. 3. An offer to enter into a unilateral contract. 4. Reliance by the offeree.

Question 4

What is required for a firm offer?

Answer 4

A firm offer must be an offer from a merchant. The offer will be held open for the time specified by the firm or three months, whatever is sooner.