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Citizen Law: 6-1 Creation of an Offer
Transcript of Citizen Law: 6-1 Creation of an Offer
Offer and Acceptance Acceptance—
Occurs when a party to whom an offer has been made agrees to the proposal…
Only offerees may accept
So if someone else over hears an offer…they cannot accept the offer unless the offeror states the offer again.
The acceptance must match the offer (pg. 116-117)
Mirror image rule—requires that the acceptance must exactly match the terms contained in the offer.
Follow UCC rules
Acceptance must be communicated to the offeror (pg 117 rd)
Silence, bilateral, unilateral acceptance
Bilateral—require that the offeree accept by communicating the requested promise to the offeror
Unilateral—the offeror in a unilateral contract promises something in return for the offeree’s performance and indicates that this performance is the way acceptance is to be made.
Modes of contractual communication
Communication in which contracts will be accepted: phone, fax, computer, etc.
When acceptances are effective
An effective acceptance must come from the intended offeree, match the terms of the offer, and be communicated to the offeror in a proper and timely fashion. WHAT IS REQUIRED
OF AN ACCEPTANCE? Chapter 6 1. How could an offeree ensure that an offer will stay open for a set period of time? Chapter 6 Options
If the offeree gives the offeror something of value in return for a promise to keep the offer open, this agreement is itself a binding contract.
If a written offer contains a term stating how long it is to stay open
The UCC (Uniform Commercial Code) makes firm offers binding for the time stated, but not more than 3 months. HOW CAN AN OFFER BE KEPT OPEN? What are the requirements of an offer? 1. Offer and acceptance - An agreement made of both
Offeror—person who makes the offer
Offeree—the person to whom it is made
The terms of the offer must be definite and accepted without change by the party to whom it was intended to be offered
2. Genuine assent - No deception, mistake, or unfair pressure.
An agreement based on deception, improper pressure, certain types of mistakes, etc. is not an agreement that society wants to be involved in enforcing
3. Legality - What the parties agree to must be legal
An agreement to pay someone to commit a crime or tort cannot be a contract.
Courts should not have to enforce what other branches of government consider illegal. WHAT MUST BE IN
A CONTRACT? There are 6 requirements: 6-1 Creation of Offers
6-2 Termination of Offers
6-3 Acceptances CHAPTER 6
Offer and Acceptance When there is no specified or customary means for communicating acceptances, a faster means than that employed by the offeror to make the offer would be considered effective by the courts. T or F Slide 27 Chapter 6 Requirements for acceptance to create an enforceable agreement:
NOTE if an attempted acceptance does not fulfill these requirements, it is treated as a counteroffer. Chapter 6 An offeree who rejects an offer can later accept it if the acceptance occurs within a reasonable time after the original offer. T or F
If an offeree gives the offeror something of value to keep an offer open, the contract thereby created is called a(n)? Option or Firm Offer
If either the offeror or offeree is deemed insane, the law will
Uphold any offers made
Terminate any offers made
If a hardware store salesclerk said, “this price on the lawnmowers is good for 30 days,” would this be a firm offer? Y or N Also, indicate which party’s action (offeror or offeree) ends the offer. 1. Revocation by the offeror
Revocation..the right to withdraw an offer before it is accepted.
2. Time stated in the offer
Example, purchasing a home. I am offering $240 thousand and I give a date of in 2 days by noon…a counter must be given.
3. Reasonable length of time
Depending on the situation
Ebay items purchased are given specific dates and times of payment
Buying a home requires a specific amount of time
4. Rejection by the offeree
In purchasing a home…there is a specific length of time agreed upon the buyer and seller
If the offeree changes the offeror’s terms in important ways and sends it back to counter…example, buying a home. Home is for Sale for $650,000 I counter the offer and put my price in for $522,000.
The seller at this time could counter back
This could go on 2 or 3 or more times
6. Death or insanity of either the offeror or offeree
Death or insanity eliminates such control.
The law states that no one can offer is someone dies or is mentally unstable (unless written in a will)
7. Destruction of the specific subject matter
If the merchandise is destroyed in a fire…then offer is terminated HOW CAN OFFERS
BE ENDED? In some cases a person may be held to an offer that she only intended as a joke. T or F
All agreements must be in writing to be enforceable in court. T or F
If an offer is made, it can be accepted by anyone who learns of it. T or F 1. Offeror must appear to intend to create a legal obligation (Contractual intent must be present)
If you think you are joking, but a reasonable person would interpret your conduct as indicating that you intend to contract, you have made an offer…do not JOKE when making or trying to make an offer.
On the other hand if you are serious, but a reasonable person would interpret your conduct as a joke, then no legally enforceable offer is made.
Statements made in anger or terror
Someone trying to steal a watch that you are tying to sell is not an offer
REQUIREMENTS OF AN OFFER—3 elements What distinguishes a contract from other agreements?
Contracts— Agreements between 2 or more parties that create obligations.
The courts are far more selective…there are 6 major requirements that must be satisfied by the court… FOCUS A (n) __________ is an offerees agreement to an offeror’s proposal?
Mirror image rule
If an offeror specifies in the offer that the acceptance must be made by fax, an e-mailed acceptance will not be effective. T or F
All forms of contractual communication take effect when received. T or F
An offer that can be accepted only by an offeree’s performance creates a (n) ___________ contract.
unilateral Slide 26 Chapter 6 Scenario
Has a contract been formed? FOCUS Chapter 6 Offers between merchants that contain a term stating how long it is to stay open is called a __firm or Option___ offer.
If a beauty salon hair designer said to a customer, “this price on the cut and dry is good for 30 days,” would this be a firm offer. Y or N If a time for the offer to expire is not stated, it will expire in a reasonable time under the circumstances. T or F
If an offeree clearly rejects the offer, the offer is termed
A. Counter offered
When an offeree changes the offeror’s terms in important ways, the offeree makes a (n)?
A. Revocation by the offeror
B. Offeror is admitted to the hospital for tests
C. Counter offer Can offers to contracts be terminated at different times depending on the subject matter of the offer? FOCUS Chapter 6 If the offer that was accepted to form a contract is valid, the courts will not enforce the contract. T or F
Which of the following is not an essential element of a contract
A. Offer and acceptance
B. Genuine dissent
C. Legality 2. Essential terms must be complete and definite (include essential info.)
All offers must: identify price, subject matter, quality, to be legally effective.
Each term must be identified clearly
Real estate offers essential terms for sale and they include:
Identity of the specific lot
Full terms form payment
Date for delivery of possession
Date for delivery of deed
3. Offer must be communicated to the offeree -
Or no-one has to accept REQUIREMENTS OF AN OFFER—3 elements What elements are required to form a legally enforceable contract? 4. Consideration -The agreement must involve both sides receiving something of legal value.
Without something of value being exchanged we have merely a promise to make a gift.
5. Capacity - The parties must be able to contract for themselves rather than being forced to use parents or legal representatives.
The courts do not have to enforce unfair bargains made due to a lack of ability to contract in the first place.
6. Writing - Some agreements must be placed in writing to be fully enforceable in court.
Some contracts are so important that the courts must have a writing to be sure the proper terms are being enforced.
Certain credit cards
Loan applications (college, home, car) WHAT MUST BE IN
A CONTRACT? There are 6 GOALS
The ways an offer may be terminated before acceptance or kept open as an option… 6-2 Termination of Offers Chapter 6 Objectives:
This lesson details the elements that must be found in a contract to render it enforceable in court of law and then focuses on the tests an offer must pass to be considered legally valid. 6-1 Creation of Offers 1. Test of the reasonable person
2. Facts and circumstances (examples provided in class are not offers)
3. Preliminary negotiations
4. Social arrangements do NOT create legal obligations! Intent to Create a Legal Obligation GOALS
Discuss the requirements of an effective acceptance
Determine at what point in time an acceptance is effective 6-3 Acceptances Offer - A proposal by an offeror to do something, provided the offeree does or refrains from doing something in return.
The offer is the basis of the bargain Review!! Review!! Quiz Tomorrow! Do Now:
Juan and Susan were talking one day after school. Juan would turn 16 on the upcoming July 13 and wanted to buy Susan's car. Susan, 17, had been working and saving her money to buy a new car. Selling her old car for $2,800 would give her enough to do so. She offered it to Juan for that amount and he accepted.
Did the two friends create a legally enforceable contract?
B. No Preliminary negotiations - Information often is communicated merely to induce someone to initiate bargaining.
These statements are NOT seen by the law as indicating an intent to contract.
Example You might casually say (term used lightly) “would you pay $800 for my laptop” without intending to be bound if one says yes.
In order for this offer to become legate…there must a tag, sale price, somewhere on or near the laptop or in the paper to make this a legal contract.
Advertisements are sometimes offers
These are invitations to negotiate an offer
2 friends agree to go to shopping, no contract intended. Friends don’t think as this as an agreement. However, if one breaks the agreement the other may feel bad.
Social agreements do not create legal obligations.