CH6

offer

a proposal to make a contract

common types of general invitations

advertisements, window displays, catalogs, price lists, and circulars

acceptance

assent to an offer resulting in a contract

option

binding promise to hold an offer open

offeror

person who makes an offer

offeree

to whom an offer is made

duration of offer

1, offeror may revoke an offer at any time before its acceptance. If it has been revoked, the offeree can no longer accept it and creat a contract. Normally the offer can be revoked even if the offeror has promised to keep it open. 2. An option cannot be revoked at will. If the offeror receives something of value in return for a promise to hold the offer open, it is said to be and option and this type of offer cannot be revoked. 3. A revocation of an offer must be communicated to the offeree prior to the acceptance. Mere intention to revoke is not sufficient. This is true even though the intent is clearly shown to people other than the offeree, as when the offeror dictates a letter of revocation. 4. An offer is terminated by the lapse of the time specified in the offer. If no time is specified in the offer, it is terminated by a lapse of a reasonable time after being communicated to the offeree. A reasonable length of time varies with each case, depending on the circumstances. It may be ten minutes in one case, and sixty days in another. Important circumstances are whether the price of the goods or services involved is fluctuation rapidly, whether perishable goods are involved, and whether there is keen competition with respect to the subject matter of the contract. 5. Death or insanity of the offeror automatically terminates the offer. This applies even though the offeree is not awawre of the death or the insanity of the offeror and communicates an acceptance of the offer. Both parties must be alive and competent to contract at the moment the acceptance is properly communicated to the offeror. 6. Rejection of the offer by the offeree and communication of the rejection to the offeror terminates the offer. 7. If, after an offer has been made, the performance of the contract becomes illegal, the offer is terminated.

Valid offer includes

1. It must be definite. 2. It must appear to be seriously intended. 3. It must be communicated to the offeree.

Cases when silence constitutes acceptance

1. When the offeree accept sthe benefit of offered services with reasonable opportunity to reject them, knowing compensation is expected. 2. When the offeree has given the offeror reason to know that assent might be shown by silence, and in remaining silent the offeree intends to accept the offer. 3. When, because of previous dealings, it is reasonable for the offeree to notify the offeror of non-acceptance.

the two essential elements of a contract are

1. an offer, either expressed or implied 2. and acceptance, either expressed or implied

mailbox rule

if there is no requirement of delivery, a properly mailed acceptance is effective when it is posted

counteroffer

offeree's response that rejects offer by varying its terms.