Business Law Midterm 3 -- Offers
How can an offeror terminate an offer?
- An offeror can revoke an offer any time before the offeree accepts the offer. - Revocation must be known by the offeree in order to be effective (can be communicated by the offeror or by someone else). - Revocation can be communicated by the offeror through express terms or by acting inconsistent with the existence of the offer.
What are the 4 components of proper K formation?
1) Agreement (offer & acceptance) 2) Consideration 3) Capacity 4) Legality
What is an authorized mode of acceptance, that triggers the mailbox rule?
An authorized mode is a mode of communication that: 1) Was specified in the offer (using a certain means or by a certain date) 2) If unspecified in the offer, put in the mail = K is formed. (Look out for incorrect dispatch, gets in the way of the acceptance being mailed on time). 3) OR if communicated using the same or faster means than the offer used.
What are the 2 ways that an offeree can terminate an offer?
1) An offeree can terminate an offer by rejecting the offer, either through express terms or through their conduct. Any acceptance after termination = a new offer put forth by the old offeree. The rejection is effective when the offeror receives it. 2) An offeree can also terminate an offer by putting forth a counter offer. A negotiation = simultaneous rejection of the offer and presentation of a new offer.
What are 2 means of terminating an offer?
1) By the actions of the parties 2) By an operation of law
What are the 3 components of a valid offer?
1) Intent to make an offer - serious and objective, was there $ offered? -what would a reasonable offeree think? 2) Definite terms - price & quantity (quantity can be set by the acceptance, "I'll take 2!") 3) The offer must be communicated to the offeree(s) -The offeree must be aware of the offer, if the offeree doesn't know that the offer exists then there's no acceptance = no K
What are the 4 ways that an offer can be terminated by an operation of law?
1) Lapse of time (either reasonable amt., or amt. specified in offer) 2) Destruction of the subject matter prior to acceptance 3) Death or incompetence of a party before negotiation is over 4) Supervening illegality - becomes illegal before acceptance
3 examples that are NOT offers?
1) Opinions as to value 2) Opinions re: future plans (I plan to sell...) 3) Invitations to bid ("make me an offer" -- the offeror is the person who responds to this)
What are the 3 characteristics of acceptance?
1) Voluntary act 2) Made by the offeree 3) Acceptance is unequivocal
What is promisory estoppel?
Because of promisory estoppel, the offeror is not allowed to revoke an offer for a certain reasonable amount of time. It is an exception to "revocation must occur before acceptance."
For offers that aren't instantaneous, can the offer be revoked?
The acceptance = when the action is completed, which means the K is created when the action is completed. An offeror can revoke his offer before the offeree has taken substantial steps toward completion of the action, or after a reasonable amount of time.
What is the mirror image rule?
The mirror image rule states that acceptances must meet offers -- helps us meet definite terms.
If an offeree sends both an acceptance and a rejection, and the rejection gets to the offeror first?
The offeror can rely on the rejection, the K does not exist.
What is the mailbox rule?
Under the mailbox rule, acceptance is effective (and thus the K is created) when the offeree sends out the response to the offeror, ASSUMING HE USED AN AUTHORIZED MODE OF ACCEPTANCE. Otherwise, the acceptance is effective upon receipt by the offeror.
What does unequivocal acceptance mean?
Unequivocal acceptance means that the offer is accepted without conditions. If the offeree includes conditions in their acceptance, it requires a response from the offeror, and is therefore a negotiation not an acceptance.
