Terminating Offers Flashcards
Methods of Terminating Offer
(LRR-CDD-I)
Lapse of time
Revocation
Rejection
Counteroffer
Death
Destruction of Subject Matter
Illegality of Subject Matter
When is a reliable source relevant?
A party can learn of Revocation, Rejection or Counteroffer either directly from the other party, or from a “reliable source.”
Revocation Exceptions
Options
Statute of Irrevocability
Irrevocable offers of unilateral Ks
Firm Offer Rule
Promissory Estoppel
When is an offeror not allowed to revoke?
Options and Real Property (if elements met)
Offeror not allowed to revoke if Real Property meets the following:
exclusive right to buy the land
at a fixed price
Within a specified time period
Offeree must give consideration
Offer cannot be revoked during the option period
When is a unilateral contract irrevocable?
If a unilateral offer is made:
time and effort are needed to complete the proposal/requested act,
Then, offeror can’t revoke offer unless give offeree reasonable time to complete the act
Firm Offer Rule [UCC Section 2205]
parties are merchants
merchant offers to buy or sell goods
in a signed writing
merchant must keep the offer open for the time stated in the writing,
if no time is stated, then for a reasonable time (not to exceed 3 months)
- Promissory Estoppel
An offeror makes a promise
offeror (1) knows, or (2) should reasonably expect, the offeree will rely on the promise
offeree does rely on the promise in a definite, substantial way.
court will enforce the promise and order the offeror to perform, if necessary to prevent injustice* to the offeree [*no definition for injustice]
When does a lapse of time happen?
Offer contains expiration date and the expiration date has passed
OR
a reasonable time has passed
Elements of Revocation
Offeror cancels or withdraws the offer
Effective on RECEIPT by offeree
Learn from a reliable source
Elements of Rejection
Offeree is unwilling to accept the terms
Effective on receipt by the offeror
Learn from a reliable source
Elements of Counteroffer
(FYI: a counteroffer terminates an original offer)
Effective when received
Learn from reliable source
Offeror not allowed to revoke if general options meets the following:
Offeror agreed to keep offer open for a specified time period
has to give consideration
can’t be revoked during time period
What is statutory irrevocability?
when a law prohibits revocation for a time period
ONLY TWO SUCH LAWS
1. offers to gov
2. pre-IPO stock
What is a signed writing compliant with the UCC Firm Offer Rule
text, email, fax, wire or telex (all examples of signed writing) because we can trace it back to offeror.
