LAW 505-002 – Contracts I
A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
Offers can terminate by:
- An offeree's power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.
- What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made.
- Unless otherwise indicated by the language or the circumstances, and subject to the rule stated in [R2C § 49], an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received.
If an offer is made face-to-face, it lapses when they part ways.
- A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
- An offeree's power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.
- Death or incapacity of either party
Revocation by Communication From Offeror Received by Offeree
Indirect Communication of Revocation
An offeree's power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.
Revocation of General Offer
Where an offer is made by advertisement in a newspaper or other general notification to the public or to a number of persons whose identity is unknown to the offeror, the offeree's power of acceptance is terminated when a notice of termination is given publicity by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available.
Five ways to get an option contract:
Option Contract Created by Part Performance or Tender
- Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
- The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
- Only applies when inviting a unilateral contract.
- An exception for signed writing purporting consideration
An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.
Offers can be for either a unilateral contract or a bilateral contract or can be ambiguous. An ambiguous offer is understood as being an offer for a bilateral contract, i.e. unless the offer makes it very clear that a unilateral contract is desired.