Chapter 10 - Mutual Assent

1 of 3 ELEMENTS OF AN OFFER

1. COMMUNICATION To have mutual assent required to form a contract, the offeree must have the knowledge of the offer. Not only must the offer be communicated to the offeree, but the communication must also be made or authorized by the offeror. An offer need not be stated or communicated by words. Conduct from which a reasonable person may infer a proposal in return for either an act or a promise amounts to an offer.

2 of 3 ELEMENTS OF AN OFFER

2. INTENT An offeror must manifest an intent to enter into a contract. The intent of an offer is determined objectively form the words and conduct of the parties. The meaning of either party's manifestation is based upon what a reasonable person in the other party's position would have believed. **Preliminary Negotiation

3 of 3 ELEMENTS OF AN OFFER

3. DEFINITENESS The terms of a contract must be sufficient definite and certain - they must be reasonably certain so as to provide a court with a basis for determining the existence of a breach and for giving an appropriate remedy. the more terms the parties leave open, the less likely that they will have intended to form a contract

Duration of an Offer - COUNTEROFFER

A counteroffer is a counterproposal form the offeree to the offeror that indicates a willingness to contract but upon terms or conditions different from those contained in the offer. It is not unequivocal acceptance of the original offer and, by indicating an unwillingness to agree to the terms of the offer, it operates as a rejection. It also operates as a new offer. A mere inquiry about the possibility of obtaining different or new terms is not a counteroffer and does not terminate the offer.

Offer

An offer is a definite proposal or undertaking made by one person to another that manifests a willingness to enter into a bargain.

Duration of an Offer - REJECTION

An offeree is at liberty to accept or reject the offer as he sees fit. If the offeree decides not to accept it, he is not required to reject it formally but may simply wait until the offer terminates by the lapse of time. Through a rejection of an offer, the offeree manifests his unwillingness to accept. A communicated rejection terminates the power of acceptance. From the effective moment of rejection, which is the receipt of the rejection by the offeror, the offeree may no longer accept the offer. Rejection by the offeree may consist of express language or may be implied from language or from conduct.

Duration of an Offer - REVOCATION

An offeror generally may withdraw an offer at any time before it had been accepted, even though he has definitely promised to keep it open for a stated time. To be effective, notice of revocation of the offer must actually reach the offeree before she has accepted. Notice, which may be given by any means of communication, effectively terminates the offer when received by the offeree. An offeror, however, may revoke an offer made to the general public only by giving to the revocation publicity equivalent to that given the offer.

ACCEPTANCE OF OFFER

Because acceptance manifests the offeree's assent to an offer, the offeree must communicate this acceptance to the offeror. SILENCE AS ACCEPTANCE Silence or inaction does not indicate acceptance. Unless through previous dealings, the offeree has given the offeror reason to understand that the offeree will accept all offers unless the offeree sends notice to the contrary. EFFECTIVE MOMENT As previously discussed, an offer, a revocation, a rejection, and a counteroffer are effective when they are received. An acceptance, on the other hand, is generally effective upon dispatch/sent.

Duration of an Offer

Death or Incompetency Destruction of Subject Matter Subsequent Illegality

Preliminary Negotiation

If a communication creates in the mind of a reasonable person in the position of the offeree an expectation that his acceptance will conclude a contract, then the communication is an offer. If it does not, then the communication is a preliminary negotiation. Preliminary negotiations are just a possibility of an offer; there is no intent or definiteness. The offeror must manifest an intent to enter into a contact, not merely a willingness to enter into negotiation.

Mutual Assent

Parties usually show mutual assent by offer and acceptance. One party makes a proposal (offer) by words or conduct to the other party, who agrees by words or conduct to the proposal (acceptance). The law applies an objective standard and, therefore, is concerned only with the assent, agreement, or intention of a party as it reasonably appears from his words or actions

Duration of an Offer - LAPSE OF TIME

The offeror may specify the time within the offer is to be accepted, just as he may specify any other term or condition in the offer. He may require that the offeree accept the offer immediately or within a specified period, such as a week or ten days. Unless otherwise terminated, the offer remains open for the specific period. Upon the expiration of that time, the offer no longer exists and cannot be accepted.

Advertisements

a public announcement or advertisement may constitute an offer if the advertisement if the advertisement or announcement contains a definite promise of something in exchange for something else and confers a power of acceptance upon a specified person or class of persons. In Lefkowitz v. Great Minneapolis Surplus Store, Inc., the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act.