Offer Flashcards
Common Law Definition of Offer
a) A promise, undertaking, or commitment to enter into a contract, definite in its terms, and communicated to the offeree.
(1) The manifestation of a present contractual intent that is certain as to time, price, subject matter, and parties and communicated to the offeree.
UCC 2-204 (formation in general)
a) Requirements for a contract are relaxed under UCC
b) Court will imply reasonable terms if terms are missing.
(1) Generally need at least price and quantity.
How an offer is terminated
- Lapse
- Revocation
- Offeror’s death/incapacity
- Rejection
Lapse - General Rules
(1) After some period of time, an offer lapses. If no period is specified in the offer, it lapses after a reasonable time.
(a) Analyze from standpoint of reasonable person in position of offeree
(2) Generally, an offer made to another in a face to face conversation is deemed to lapse at the close of the conversation.
(a) But other facts can show otherwise.
(3) Generally, silence is not an acceptance.
Lapse - Revocation: Definition
(a) An offeree’s power of acceptance is terminated when (1) the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract or (2) the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect..
(b) Generally, can revoke anytime before acceptance.
(c) Effective upon receipt.
Lapse - Revocation: Revocation of general offers to the public
(a) When offer is made by general notification to public (e.g., advertisements) or to a number of persons whose identities are unknown to the offeror, offeror can revoke by notice of termination given publicity by a method equal to that given to the offer and no better means of notification is reasonably available.
Lapse - Revocation: Option Contracts (Defiition)
(i) A promise which meets the requirements for the formation of a contract (offer, acceptance, consideration) and limits the promisor’s power to revoke an offer. (Rest. 25)
Lapse - Revocation: Option contracts (five ways to make one
(i) Giving consideration
(ii) Reciting consideration in a signed writing (Restatement 87(1)(a))
(iii) By statute such as UCC 2-205 (Restatement 87(1)(b))
(iv) Substantial reliance by an offeree (Restatement 87(2))
(v) Tendering or beginning performance of a unilateral contract (Restatement 45)
Lapse - Offeror’s Death/Incapacity
(1) Offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract (Restatement 48)
(2) Does not terminate the offeree’s power of acceptance under option K.
Lapse - Rejection: Definition
Rejection of an offer by the offeree terminates the power of acceptance so that the offeree cannot accept the offer. (Restatement 38 (Rejection).)
(i) Effective upon receipt.
Lapse - Rejection: Counter-offer
A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. (Restatement 39)
(i) Constitutes a rejection of the original offer.
Lapse - Rejection: Mirror image rule
(a) Acceptance must be unequivocal; anything less is a rejection and counteroffer.
(b) Ways around mirror image rule
(i) Court may decide that what appears to be an additional or different term is really implied in the offer.
(ii) Court may say the additional or different term is only suggestive (i.e., an inquiry).
(iii) Parties act as though they have a contract (implied) (party who sent the last message usually prevails)
Lapse - Rejection: Rejection of an irrevocable offer
Rejection, revocation, death do not terminate power of acceptance under an option contract. (Restatement 37)
