Business Law Ch 6 Offer and Acceptance, Complete study guide

The UCC provides that an acceptance of an offer to buy or sell goods may be made _____________

"in any manner and by any medium reasonable in the circumstances" unless otherwise clearly "indicated by the language or circumstances"

What occurs when a party to whom an offer has been made agrees to the proposal?

Acceptance

What are the requirements of an effective acceptance?

Acceptance is effective when sent unless the offeror specified the acceptance would be effective when received, or unless one party specified how it should be sent.

Contract

Agreement between two parties that creates an obligation.

If either the offeror or offeree is deemed insane, the law will

B (terminate any offers made)

If the parties to a contract have mutual obligations to perform it, the contract it termed what?

Bilateral

Most offers can be accepted by

giving a promise instead of performing the contracted- for act

In some offers, the offeror requires that the offeree

indicate acceptance by performing an action specified in the offer

Oral acceptances are effective at ___________

the moment the words are spoken directly to the offeror

capacity

to have a completely enforceable agreement, the parties must have the legal ability to contract for themselves

The offeror may require the offeree to _________________

use a certain communication method to accept

legality

what the parties agree to must be legal, an agreement to commit a crime or tort cannot be a legal enforceable contract

consideration

what the promise demands and generally must receive in order to make his or her promise legally enforceable against him or her is termed consideration

When the communication takes time, for example when sent through the surface mail, the question of _______________

when the communication is effective can become very important

An offeror's attempt to word the offer so that silence would appear to be an acceptance _________

will not work

requirements of a legally enforceable contract

* offer and acceptance * genuine assent * legality * consideration * capacity * proper form

express, implied-in-fact and implied-at-law contracts

-

complete

- all offers must identify the price, subject matter, and quantity directly or indirectly to be legally effective - some offers require more information - most states the essential terms for sale of real estate include 1. proper legal description of the real estate 2. price 3. full term for payment 4. date for delivery of possession 5. date for delivered of the deed

unilateral and bilateral (multilateral) contracts

- bilateral usually is the legal shorthand for two or more parties making promises that form the contract - the offer is the basis of the bargin - if not valid, there is no contract for courts to enforce - as a consequence, the law examines would-be offers - there are three tests that an offer must pass to legally be enforceable 1. contractual intent must be present 2. offer must be communicated to the offeree 3. essential terms of the offer must be complete and define

definite

- each essential term must be identified - term might be implied by law/common business practice - contracts between individuals who regularly deal in the goods, does not have a specific price - current market price is used

preliminary negotiations

- information often is communicated merely to induce someone to initiate bargaining - such statements are not seen by the law as indicating an intent to contract - invitations to negotiate ARE NOT offers - offers would typically come from the party responding to the ad - most businesses try to sell goods at their advertised prices, but it is not required by law - statues prohibit false/misleading advertising - advertisements may be offers - the ad must be clearly worded in ways that address the problem of numerous people receiving the ad for a limited amount of product - an ad may become an offer if it asks the offeree to perform an act as a way of accepting

jests

- law IS NOT concerned with what is actually in the mind of a person making the potential offer - law IS concerned with the appearance of this action - if you were joking, but someone thinks you are serious, you HAVE made an offer - if you are serious, but someone thinks you are joking, you HAVE NOT made an offer

social agreements

- social arrangements typically do not create legal obligations

statements made in anger or terror

- yelling that you'll pay someone to stop a thief IS NOT a valid offer - it DOES NOT have reasoned basis necessary for enforceable offers

Explain two ways in which offers can be terminated.

1. Can be terminated if offeree dies 2. Also insanity of a person can terminate an offer

Acceptance

1. come from the person or persons to whom the offer was made 2. match the terms in the offer 3. be communicated to the offer

Attempted acceptance of an offer for a contracts for a sale of goods is valid if the modified terms are treated as:

1. party receiving the acceptance is a consumer, not a merchant, the the new terms are proposals and not part of the contract unless agreed to by the original offeror 2. if both parties are merchants, the new terms aren't part of the contact if the original offeror objects or if the terms are material 3. if both parties are merchants, the new terms are part of the contract if the original offeror is silent and the terms are minor

A firm offer is valid for no more than

C (three months)

what are the requirements of an offer

Contractual intent must be present in the offer The offer must be communicated to the offeree The essential terms of the offer must be complete and definite A proper legal description of the real estate Price Full terms for payment Date for delivery of possession Date for delivery of the deed

Firm Offer

Contractual proposal in writing by a merchant stating how long the offer is to stay open

Which of the following does not describe an event that will terminate an offer?

D (death of the offeree)

If an offeree clearly rejects the offer, the offer is termed

D (terminated)

All forms of acceptance take effect only when received.

False

An offeree who rejects an offer can later accept it if the acceptance occurs within a reasonable time after the original offer

False (once terminated you can't accept the ORIGINAL offer)

How could an offeree ensure that an offer will stay open for a set period of time?

If they set a firm offer the offer will stay open.

Acceptence

In contracts, occurs when a party to whom an offer has been made agrees to the proposal; in commercial paper, drawer's promise to pay the oblige of a draft when the instrument is due.

what elements are required to form a legally enforceable contact

Offer and Acceptance Genuine Assent Legality Consideration Capacity Proper Form

Unilateral Contract

Offer promises something in return for the offeree performance and indicates that this performance is the way acceptance must be made

Bilateral contract

Offeree can accept offer by giving a promise to the offer instead of performing the contracted-for act

Counteroffer

Offeree's response to an offer which modifies it

Offeree

Party to whom an offer is made

Offeror

Party who makes an offer to form a contract

Offer

Proposal by an Offeror to do something, provided the offeree does something in return

Mirror image rule

Requires that the terms in the acceptance must exactly match the terms contained in the offer

Option

Separate contract arising when the offeree gives the offeror something of value in return for a promise to leave an offer open

If a time for the offer to expire is not stated, it will expire in a reasonable time under the circumstances.

True

If an offeror specifies in the offer that the acceptance must be made by fax, an e-mail acceptance will not be effective.

True

When there is no specified or customary means for communicating acceptances, a faster means than the employed by the offeror to make the offer would be considered effective by the courts

True

Revocation

Withdrawing an offer before it is accepted

If a beauty salon hair designer said to a customer, "This price on the cut and dry is good for 30 days," and then wrote it down on a piece of paper and signed it, would this be a firm offer?

Yes

If a hardware store salesclerk said, "This price on the lawnmowers is good for 30 days," would this be a firm offer?

Yes

When an offeree changes the offeror's terms in important ways, the offeree makes a(n)

counteroffer

Reward offer

may be made to the general public

Therefore the effect is similar to instantaneous oral communication, but in a ______________

more durable form that is easier to prove in court

Offer and Acceptance

must be an agreement composed of an offer and an acceptance upon which to base the contract. Terms of the offer must be definite and accepted.

If an offeree gives the offeror something of value to keep an offer open, the contract thereby created is called a(n)

option

Most courts say the acceptance is effective when ________

sent by the same means used for the offer, or by faster means.

proper form

some agreement must be placed in writing to be fully enforceable in court

If the person performing the act does not know of the reward __________

that person is not legally entitled to it

genuine assessment

the agreement must not be based on ones party deceiving another, an important mistake, or unfair pressure exerted to obtain the offer or acceptance.