Chapter 6Chapter 6

Offer and AcceptanceOffer and Acceptance

Elements of a ContractElements of a Contract

Offer and Acceptance (Agreement)Offer and Acceptance (Agreement) Genuine AssentGenuine Assent LegalityLegality Consideration Consideration

Something of ValueSomething of Value CapacityCapacity Writing (Form)Writing (Form)

AgreementAgreement

Offer – A promise to do (or not do) Offer – A promise to do (or not do) something provided the offeree does something provided the offeree does (or does not do) something in return.(or does not do) something in return.

Acceptance – Act or promise in Acceptance – Act or promise in response to an offerresponse to an offer

Offer + Acceptance = Agreement

The OfferThe Offer

Offeror – Makes the offerOfferor – Makes the offer Offeree – Receives the offerOfferee – Receives the offer Legal Focus pg 192Legal Focus pg 192

Statements made in anger lack Statements made in anger lack intentintent

Just Joking, excitementJust Joking, excitement Reasonable personReasonable person

The OfferThe Offer

Requirements of the offer:Requirements of the offer:1.1. Contractual Contractual intentintent must be present in the must be present in the

offeroffer

2.2. Must be Must be communicatedcommunicated to the offeree to the offeree

3.3. TermsTerms must be reasonably must be reasonably definitedefinite

The Offer - IntentThe Offer - Intent

Legal Foci Pg 193Legal Foci Pg 193 Nonoffers Nonoffers

1.1. JestsJests

2.2. Statements made in anger or terrorStatements made in anger or terror

3.3. Expressions of OpinionExpressions of Opinion

4.4. Statements of intentionStatements of intention

5.5. Preliminary NegotiationsPreliminary Negotiations1.1. Advertisements, Catalogs, etcAdvertisements, Catalogs, etc

6.6. Social AgreementsSocial Agreements

The Offer - IntentThe Offer - Intent

An agreement to agreeAn agreement to agree Law in action from Chapter 7Law in action from Chapter 7

AuctioneerAuctioneer The audience actually makes the The audience actually makes the

offeroffer Hammer falls – Contract formedHammer falls – Contract formed

The Offer – Definite TermsThe Offer – Definite Terms

Terms – promises, conditions, and Terms – promises, conditions, and descriptions in a contract.descriptions in a contract.

Important Terms (pg 112)Important Terms (pg 112) Subject MatterSubject Matter PartiesParties PricePrice Time for PerformanceTime for Performance

The Offer – Definite TermsThe Offer – Definite Terms

Legal Focus Top of Pg 197Legal Focus Top of Pg 197 mechanicmechanic

Law in Action Pg 196Law in Action Pg 196 fursfurs

Legal Focus Middle of Pg 197Legal Focus Middle of Pg 197 copierscopiers

The Offer - CommunicationThe Offer - Communication

Legal Focus Pg 198Legal Focus Pg 198 Must be communicated Must be communicated to the to the

offereeofferee

Termination of the OfferTermination of the Offer

Termination by the PartiesTermination by the Parties Termination by LawTermination by Law

Termination by the PartiesTermination by the Parties

RevocationRevocation Must be made same way offer wasMust be made same way offer was

RejectionRejection CounterofferCounteroffer

Termination by LawTermination by Law

Time StatedTime Stated Reasonable lengthReasonable length

Death or Insanity of the partiesDeath or Insanity of the parties Destruction of the Subject MatterDestruction of the Subject Matter IllegalityIllegality

Keeping Offers OpenKeeping Offers Open

WYV – pg 114WYV – pg 114 OptionsOptions Firm OffersFirm Offers

MerchantsMerchants In writingIn writing Binding offer for time stated < 3 monthsBinding offer for time stated < 3 months

Requirements of AcceptanceRequirements of Acceptance

Comes from offereeComes from offeree Sometimes the offeree is the general Sometimes the offeree is the general

publicpublic Matches terms of the offerMatches terms of the offer

Mirror image ruleMirror image rule Counteroffers are not acceptancesCounteroffers are not acceptances

Be communicated to the offerorBe communicated to the offeror

Mirror image ruleMirror image rule

Most states only apply to major Most states only apply to major changeschanges

UCC exceptionsUCC exceptions Pg 119Pg 119

Communication of AcceptanceCommunication of Acceptance

SilenceSilence Tricky, trickyTricky, tricky Exception: prior practice, Old Legal Exception: prior practice, Old Legal

FocusFocus BilateralBilateral

Promise for a PromisePromise for a Promise Words or conductWords or conduct

UnilateralUnilateral Promise for an act Promise for an act

Modes of CommunicationModes of Communication

In person or other effective meansIn person or other effective means Phone, text, mail, messenger, email, Phone, text, mail, messenger, email,

fax, etc.fax, etc. Exception: stipulated in offerException: stipulated in offer

Modes of CommunicationModes of Communication

All forms of contractual All forms of contractual communication are effective once communication are effective once received received EXCEPTEXCEPT AcceptanceAcceptance

Effective once sentEffective once sent Same mode as offer or fasterSame mode as offer or faster Mailbox ruleMailbox rule Unless otherwise stipulated in the offerUnless otherwise stipulated in the offer