Page 6 Flashcards
How can you revoke an offer by conduct?
Doing an act that prevents performance of the contract
When is a revocation of an offer effective by conduct?
When the offeree learns about it from a reliable source
What are three types of irrevocable offers?
- *** MOP **
- Merchant’s firm offer
- Option contracts
- Promissory estoppel
If a revocation is applicable on an essay, what should you discuss?
- merchant’s firm offer
- option contracts
- promissory estoppel
What are the three ways that an offer can be terminated by operation of law?
- death/incapacity/insanity
- supervening illegality
- destruction of subject matter
If either party dies, what happens to an offer?
It dies too because there can’t be a contract without two parties in existence
If one party becomes incapacitated or insane, what happens to an offer?
Mental capacity precludes mutual assent
Why do option offers not terminate on death?
Because consideration has been paid to keep it open during the option period
What is supervening illegality?
When a law gets passed that prevents the formation of a contract, this terminates an offer
What is an example of supervening illegality?
If you’re selling Cuban cigars and a law is made to make that illegal after the offer is made, but before acceptance occurs, that terminates the offer
If the subject matter is destroyed, what happens to the offer?
It can’t be performed
How does an offer terminate by its own terms?
An offer expressly states how long it will be open for or on what event it will terminate
If you get an offer in the mail long after the acceptance date, what period of time do you have?
Whatever period of time you would have had if the mail had been received when it should’ve been
If an offer says it will stay open until Friday at 6 PM, when does the offer lapse?
Anytime after Friday at 6 PM
If an offer doesn’t say how long it will be open for, when does it lapse?
After a reasonable time has passed
If an offer is communicated via a delivery system like mail or fax, and the author gives you five days, where do you measure the date from?
From the date the offer was delivered, or if it was delivered abnormally, from when it should have been delivered
If you send an offer by mail to sell your car for $5000, and it says the person has five days to accept, and mail usually takes two days, but in this case there was a problem that made it take five days, where do you measure the date from?
Date it should have been delivered if it had been delivered normally
How can passage of time terminate an offer with regard to face to face offers and volatile prices?
- face-to-face offers terminate when a conversation ends
- offers to sell where prices are very volatile terminate quickly
What are exceptions where offers do not terminate?
Irrevocable offers including:
- option contracts
- equitable option/detrimental reliance
- merchant’s firm offer
- sub-contractor’s bids
How can you not revoke an option contract?
Nothing can terminate the offer until the day that is set
Under the restatement, if there is an option contract that only has the recital of consideration, but none was actually paid, will the majority still enforce the option?
Yes, because the recital is treated as a promise to pay
Does it matter how much the consideration was for an option contract?
No, It can just be one dollar
What is an equitable option contract/detrimental reliance?
Implied option contract where offeree detrimentally, reasonably, and foreseeably relies on an offer, and the offer must stay open for reasonable time
How is an equitable option contract the same as an option contract?
It is as if the person paid to keep the offer open and stays open for reasonable time, because of the detrimental reliance
