OFFER & ACCEPTANCE. Chapter 7

Transcription

1 OFFER & ACCEPTANCE Chapter 7

2 SECTION 7-1 GOALS List the elements required to form a contract. Describe the elements of an offer.

3 Contract Agreement that courts will enforce Can be oral or written Elements of Contract 1. Offer and Acceptance serious accepted by person who it was communicated to. 2. Genuine Assent Agreement must be legit One party can t be deceived or pressured into it

4 ELEMENTS OF A CONTRACT 3. Legality What the parties agree to must be legal Agreeing to pay someone to commit a crime is not a contract 4. Consideration Both parties receive something of value in return.

5 ELEMENTS OF A CONTRACT 5. Capacity Parties must be able to contract for themselves Must be mentally stable and know what they re doing 6. Writing Some contracts need to be in writing to be enforceable Purchasing a land or house

6 PARTIES INVOLVED Offeror Person who makes the proposal Offeree Person to whom the offer is made

7 EXPRESSION OF INTENT Reasonable Person Test Law is not concerned with what s in the mind of offeror If a reasonable person would think you re serious then there s a contract.

8 EXPRESSION OF INTENT Facts and Circumstances Examine offeror s words and conduct based on all relevant facts and circumstances Their words may indicate a contract, but the facts and circumstances surrounding them aren t valid Ex: selling my car to a student

9 EXPRESSION OF INTENT Preliminary Negotiations Communicating with no intent to contract Just testing the waters Ex: I m interested in selling my ipod for $100. Is anyone interested.

10 EXPRESSION OF INTENT Social Agreements Social arrangement do NOT create legal obligations. Can t sue someone if they back out on a date.

11 OFFER MUST BE COMPLETE & CLEAR Complete Must have all essential information Depends on how complex the contract is If any essential terms are missing, it is not a contract Identify Price Subject matter Quantity

12 OFFER MUST BE COMPLETE & CLEAR Clear Each essential term is clearly identified Implied Terms Could be implied by law or common business practice Contract between merchants If price isn t stated, market price is used Example Hair cut

13 OFFER MUST BE COMPLETE & CLEAR Advertisements Not offers Treated as invitations for customers to make an offer For Advertisements to be an Offer Must be worded to address too many people wanting a limited product subject to stock on hand It asks offeree to perform an act as a way of accepting 1 st person in line at 6:00 AM receives product

14 OFFER MUST BE COMMUNICATED Communicated to Offeree Person who is not intended offeree can t accept Can t accept an offer you don t know has been made Can t collect a reward if you didn t know about it.

15 SECTION 7-1 ACTIVITY With a partner read and answer the Think Critically About Evidence P. 114 (#10 13)

16 SECTION 7-2 GOALS Describe how an offeror can end an offer. Tell how an offeree can end an offer. Explain how the parties can create offers that cannot be ended by the offeror.

17 HOW OFFERS END Revocation Offeror withdraws the offer before acceptance Time Stated Offeror states how and when offer is accepted Reasonable Time When nothing is said, offer is alive for a reasonable length of time. What is considered a reasonable length of time?

18 HOW OFFERS END Rejection by Offeree Offeree refuses the offer Counteroffer Offeree changes terms of original offer Terminates the original offer A new offer is created by offeree Death or Insanity Automatically terminates offer

19 HOW IS AN OFFER KEPT OPEN? Options Offeree gives something of value Offeror then promises to keep the offer open Example Purchasing a house Firm Offer Offer by merchant for sale or purchase of goods States in writing how long it stays open Uniform Commercial Code Makes firm offers binding for time stated Not longer than 3 months Death or insanity won t terminate the offer

20 SECTION 7-2 ACTIVITY With a partner read and answer the Think Critically About Evidence P. 117 (#12, 13, 14)

21 SECTION 7-3 GOALS Discuss the requirements of an effective acceptance Determine at what point in time an acceptance is effective.

22 Acceptance HOW ARE ACCEPTANCES CREATED? Offeree agrees to the offer 2 Requirements Acceptance must be made to offeror Acceptance must match original offer Mirror Image Rule terms in acceptance exactly match terms in offer Goods terms must match, any variation is considered a counteroffer

23 HOW ARE ACCEPTANCES CREATED? Acceptance Must be Communicated Silence as Acceptance Only works if both parties agree in advance Unilateral Acceptance Offeree indicates acceptance by performing the obligations of the contract Example - Looking for a lost dog because of the reward Bilateral Acceptance Most common Offeree accepts by communicating the requested promise Example Seller promises to deliver top soil in exchange for homeowner s payment

24 WHEN IS ACCEPTANCE EFFECTIVE Can be communicated orally, in person, telephone. Can be communicated via writing Sent by mail, or fax Acceptance is effective (binding) when it s sent An offer is effective (binding) when it s received Offeror may require certain communication method Courts often just require it to made in same form as offer, or in a faster form

25 SECTION 7-3 ACTIVITY With a partner read and answer the Think Critically About Evidence P. 121 (#6, 7, & 9)