OFFER AND ACCEPTANCE Chapter 6 Section 6 1

OFFER AND ACCEPTANCE Chapter 6

Section 6 -1 ■ Offer and Acceptance

What’s your verdict? Diaz, 16, contracted to sell his full drum set to his classmate Martin, also 16, for $450. They concluded their contract with a handshake in front of a couple of friends. If one of them later decides he does not want to go through with the deal, can the contract nonetheless be enforced in court against him? Why or why not?

What Must Be in a Contract ■ Courts are selective when it comes to _____ – agreements between two or more parties that create obligations. – There are ___ major requirements that must be satisfied before _______ will treat a ______ as a legally enforceable contract: 1. _______ & ______ 4. ________ 2. __________ 5. _______ 3. _____ 6. _____

Offer and Acceptance – Must be an ______ with ______ and ______ to base contract on. – The person who ____ the offer is the ______. – The person the offer is _______ is the _____. – Terms of the offer must be ______ and accepted without _____ by the party to whom it was intended to be ______.

Genuine Assent – Must ______ be based on: ■ _______ ■ Use of __________ to _____ or _____ offer.

Legality – What parties _____ to must be _____. – An agreement to _____ a ____ or a ______ cannot be a _____ enforceable contract.

Consideration – What the __________ and must _____ in order to make the promise _____ enforceable. – Without something of _______ being _______ you just have an unenforceable ______ to make a _______.

Capacity – Parties must have the legal _______ to _____ for themselves. – Those who aren’t considered to have ___________ to contract: ■ _____ (those under age ___) ■ _____________ at the _____ the contract is ____ ■ ____ and ____ – Only if one party is so far gone that they don’t understand the _____ and ________ of the contract and the other party is _______ and taking _____.

Proper Form – Some _____ must be placed in _____ to be fully enforceable in court.

What’s your verdict? Answer: If one of them later decides he does not want to go through with the deal, can the contract nonetheless be enforced in court against him? Why or why not?

Nature and Classes of Contracts 1. ______ and _______ Contracts – • • ______ – one that has been fully performed which means both parties have done all they promised to do. ______ – one that has not ben fully performed because something agreed upon remains to be done. 2. ______, ___________ and _______ Contracts • • • _____ – one in which all the terms are expressly stated orally or in writing. _______ Contract – does not have its terms expressly stated but can be inferred from the parties’ acts or conduct. _______ Contract – also called a quasi contract because it isn’t really a contract and the court must determine if restitution is required for services performed even thought they weren’t asked to be. 3. _______ and _______ Contracts – • • ______ – offeror promises something in return for the offeree’s performance and it’s this performance that guarantees acceptance. ______ (_______) – Mutual exchange of legally binding promises where offeror expects a promise in return as acceptance.

Checkpoint ? What elements are required to form a legally enforceable contract? OGLCCP

What’s your verdict? Anchors Aweigh, a boat retailer, placed an ad in a local newspaper announcing a sale of 25 -ft. cabin cruisers for $35, 500 each. When seven would-be-buyers were waiting for the business to open in order to purchase a cruiser at that price, the owner of Anchors Aweigh raised the price to $40, 000. Can the original price be enforced against the dealership by a customer who showed up to buy a cabin cruiser for $35, 500?

Requirements of an Offer ■ An _____ is a _____ by an _____ to do something, provided the _____ does or refrains from doing something in return. ■ There are ___ tests that an _____ must _____ to be legally ______: 1. Contractual _______ must be ____ in the offer. 2. The offer must be _____ to the _____. 3. The essential ______ of the offer must be _____ and ______.

1) Contractual Intent Must Be Present ■ Even though the _______ may indicate an _____ has been made, the _____ and ______ under which they were _______ may make it appear it isn’t ______. – Jests – Law is concerned with ________ of action of offer not what is in person’s _______ standard applies to determine if person was ____ or _____. – Statements Made in Anger or Terror – These tend to be ______ statements and not valid _____ offers. – Preliminary Negotiations – _______ is sometimes given just to initiate _______ therefore aren’t seen as ______ to contract, rather _______ to _______.

1) Contractual Intent Must Be Present (cont. ) – Preliminary Negotiations (cont. ) ■ _________ may occasionally be offers: 1. Ad must be clearly ______ in ways that address the ______ of ______ people receiving the ad for a ______ amount of product. 2. An ad may become an _______ if it asks the _____ to perform an _____ as a way of _______. - Social Agreements – Making plans ______ with _____ is ____ creating a legal ______.

What’s your verdict? Answer: Can the original price be enforced against the dealership by a customer who showed up to buy a cabin cruiser for $35, 500?

2) Offer Must Be Communicated to the Offeree ■ A person who is not the intended ______ cannot _____ the offer. ■ A person cannot _____ an offer without ______ it has been made.

3) Essential Terms Must Be Complete and Definite Complete – At a minimum, nearly all offers must identify a ______, _________, and ____, either _____ or ______, to be legally effective. – Essential terms for sale of _________: 1. Proper legal _______ of the real 2. 3. 4. 5. estate ______ Full ______ for ______ for delivery of _______ for delivery of the ____

3) Essential Terms Must Be Complete and Definite (cont. ) Definite – Each _______ term must be _______ clearly. – In some contracts, however, a _____ might be _____ by law or common ______ practice. – Current _____ price is used if not _____ by seller.

Checkpoint ? What are the requirements of an offer?

Section 6 -2 ■ Termination of Offers

What’s your verdict? On May 15 th, Melissa offered to sell her collection of baseball cards for $3, 000 at anytime before the first of the next month to her friend and fellow collector, Raoul. While Raoul was trying to raise the money, Melissa had second thoughts. So she called Raoul and said, “I’ve changed my mind, I’m not interested in selling the cards. ” Raoul responded, “It’s too late, you said the offer would be open for this whole month. This is just the 20 th, and I’ve got the money so I accept. ” Was Melissa’s offer terminated before Raoul’s attempted acceptance?

How Can Offers Be Ended? Once made, an _______ doesn’t last ______. It may be ________ in a variety of ways: ■ ■ ■ ________ by the Offeror _________ in the Offer Reasonable ___________ by the Offeree ________ or _____ of Either the Offeror or Offeree ■ __________ of the Specific Subject Matter

How Can Offers Be Ended? Revocation by the Offeror ■ ______ can _____ offer anytime ______ it is accepted even if they _______ the offer would remain ______ for a particular period. – This is known as _______ but isn’t effective until it’s ________ to the offeree.

What’s your verdict? Answer: Was Melissa’s offer terminated before Raoul’s attempted acceptance?

How Can Offers Be Ended? Time Stated in the Offer ■ ______ may state ____ and _______ the offer must be accepted. ■ If ____ requirements aren’t met there is ___ contract.

How Can Offers Be Ended? Reasonable Length of Time ■ When a _____ length of time isn’t ______ in the ______ for how _______ it will remain _______ than it _______ after a _________________. – ________________ depends on all the _________ circumstances. – To avoid ____________, the time available for ________ should be _________ from the ________.

How Can Offers Be Ended? Rejection by the Offeree ■ When an ______ clearly _____ the offer, it is ________. – This is ____ even if a _______ for acceptance was _____ and hasn’t been ____ yet. ■ The only way the ______ offer can ever be ________ after that happens is if the ______the offer.

How Can Offers Be Ended? Counteroffer ■ Generally an _______ accepting an offer must accept it ______ as ______. ■ If they change the ________ terms in _______ ways and send it _____ to the _____ this is known as a ___________. – This counteroffer _______ the _____ offer and the _____ becomes a ____ offer.

How Can Offers Be Ended? Death or Insanity of Either the Offeror or Offeree ■ When entering into a _______ you do so _______ and subject to your _______. ■ _____ or ______ eliminates such control. – The ____ acts for these _______ when they can no longer ___ and ______ their offers.

How Can Offers Be Ended? Destruction of the Specific Subject Matter ■ If the ______ refers to a __________ and it is subsequently ______, the offer is automatically ________.

Checkpoint ? Explain two ways in which offers can be terminated?

What’s your verdict? Adamssen, a well-known nonfiction author, sent a fiction book manuscript entitled The Endtimes Project to Hardcover, Inc. , a publisher in New York City. Adamssen offered to let Hardcover publish it if he received an advance of $50, 000 and 15 percent of gross sales. Sorrento, an editor at Hardcover, thought the manuscript would be a sure best seller, but Hardcover did not typically publish books in that subject area. Wanting approval from the editorial board at Hardcover before accepting Adamssen’s offer, Sorrento offered Adamssen $1, 000 to keep his offer open solely to Hardcover for 30 days. Adamssen agreed. Is Adamssen now legally bound to keep his offer to Hardcover open for the 30 days?

How Can an Offer Be Kept Open? Options – When the _____ gives the ______ something of _____ in _____ for a ______ to keep the offer _____. ■ This ________ itself is a _____ contract and the offer may not be ______ during the period of the ______. Firm Offers – A ________ that works the ______ result as an ______ applies to people who regularly _____ in the _____ being _____ or _______ (like _________). – If such a _____ offer contains a ____ stating how _______ it is to stay _______, it is called a ________. ■ The ________________ (UCC) makes ______ offers _______ for the _____ stated, but not more

What’s your verdict? Answer: Is Adamssen now legally bound to keep his offer to Hardcover open for the 30 days?

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