business law chapter 2: offers. introduction to offers how definite must an offer be? what does the...
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Business Law
Chapter 2: Offers
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Introduction to Offers
• How definite must an offer be?
• What does the law require for a valid offer?
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Defining an Offer
• An offer is an expression by one person of his willingness to enter into a bargain with another person.
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Proving an Offer
• The actual determination about whether specific words created a contract is left to the jury.
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General offers vs. general invitations to make an offer
• A general offer is made to a non-specific person.
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The intent to contract
• The offeror’s intent is absolutely essential to the transaction, but the court is in no better position to read the offeror’s mind than anyone else.
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Language Used to Make an Offer
• There must be some specific statement or act that will qualify as an offer.
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Mutual assent
• The courts will ask, “Was there a valid offer and, if so, was there a valid acceptance?”
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Advertisements
• In most situations, advertisements are not offers.
• They are usually interpreted by the courts as invitations to make an offer.
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Stating a price in an advertisement
• Advertisements, even those that contain price quotations are still considered to be invitations to make an offer, not actual offers in themselves.
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Mistakes in Advertisements do not create offers
• Even when the advertisement specifies a sale price, it still does not create an offer.
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When Does an Advertisement Become an Offer?
• An advertisement may be considered an offer when the words used, express some intent on the part of the merchant to assume legal liability.
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Rejecting an offer
• As far as the law is concerned, a rejected offer is legally invalid and once gone, it cannot return unless a new offer is made.
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Proving rejection
• The rejection must be proven in the civil case.
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Counteroffers
• A rejection of an offer and a new offer made back.
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The Validity of a Counteroffer
• A counteroffer must meet the same requirements as an offer.
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• A counteroffer must also give the other person the right to accept.
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Knowledge of the Offer
• The offer must be communicated.
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Terminating the offer
• An offer can terminate in any of a number of ways.
• The offer may contain language stating that it will expire within a given period, or by a specific date.
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• The offeror is usually permitted to withdraw his offer at any time prior to acceptance.
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Revoking an offer
• An offeror can revoke his offer any time before it is accepted.
• However, there are exceptions to this rule.
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• An offer that is validly withdrawn cannot create any power of acceptance in any other party.
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• When the offeror decides to revoke the offer, he must communicate this intention to the offeree before the offeree accepts.
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Revoking a unilateral contract offer
• An offer for a unilateral contract can be revoked at any time prior to someone taking action
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• When an offer for a unilateral contract is made to the public at large, it must be revoked in the same manner as it was first made.
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Time limits on offers
• An offer must be accepted within the prescribed time limit.
• Failure to do so renders the offer revoked.
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Revoking an irrevocable offer
• An offer can be revoked even when the revocation apparently violates the terms of the offer.
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Options
• An option gives another the right, for a stated period, to purchase an item for a specific amount.
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Revoking an option
• An option that has been accepted cannot be revoked before the time limit stated in the option agreement.