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CHAPTER 6 Offer and Acceptance. 6-1 Creation of Offers 6-2 Termination of Offers 6-3 Acceptances. 6-1 Creation of Offers. GOALS List the elements required to form a contract Describe the requirements of an offer. FOCUS. What distinguishes a contract from other agreements?. - PowerPoint PPT Presentation
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Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
CHAPTER 6Offer and Acceptance
6-1 Creation of Offers
6-2 Termination of Offers
6-3 Acceptances
Chapter 6Slide 2
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
6-16-1 Creation of Offers
GOALS List the elements required to form a
contract Describe the requirements of an offer
Chapter 6Slide 3
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
FOCUS
What distinguishes a contract from other agreements?
Chapter 6Slide 4
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT MUST BE IN A CONTRACT?
Offer and acceptance Genuine assent Legality Consideration Capacity Writing
Chapter 6Slide 5
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
What elements are required to form a legally enforceable contract?
Chapter 6Slide 6
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
REQUIREMENTS OF AN OFFER
Contractual intent must be present Jests Statements made in anger or terror Preliminary negotiations Social agreements
Offer must be communicated to the offeree Essential terms must be complete and
definite
Chapter 6Slide 7
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
What are the requirements of an offer?
Chapter 6Slide 8
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
6-26-2 Termination of Offers
GOALS Describe the various ways to end offers Explain how an offeree can ensure an
offer will remain open
Chapter 6Slide 9
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
FOCUS
Can offers to contracts be terminated at different times depending on the subject matter of the offer?
Chapter 6Slide 10
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
HOW CAN OFFERS BE ENDED?
Revocation by the offeror Time stated in the offer Reasonable length of time Rejection by the offeree Counteroffer Death or insanity of either the offeror or
offeree Destruction of the specific subject matter
Chapter 6Slide 11
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Explain two ways in which offers can be terminated.
Chapter 6Slide 12
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
HOW CAN AN OFFER BE KEPT OPEN?
Options—offeree give the offeror something of value in return for a promise to keep the offer open, this agreement is itself a binding contract. The offer may not be withdrawn during the period of the option.
Firm offers—offer made in writing
Chapter 6Slide 13
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
How could an offeree ensure that an offer will stay open for a set period of time?
Chapter 6Slide 14
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
6-36-3 Acceptances
GOALS Discuss the requirements of an
effective acceptance Determine at what point in time an
acceptance is effective
Chapter 6Slide 15
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
FOCUS
Scenario John makes an offer to Paul. Paul is
not interested, but Paul’s friend, who was standing nearby, hears the offer and says she accepts.
Question Has a contract been formed?
Chapter 6Slide 16
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT IS REQUIRED OF AN ACCEPTANCE?
Only offerees may accept The acceptance must match the offer Acceptance must be communicated to
the offeror Silence, bilateral, unilateral acceptance Modes of contractual communication When acceptances are effective
Chapter 6Slide 17
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT IS REQUIRED OF AN ACCEPTANCE?
Silence—offeree is not obligated to reply to offers made. Offers worded so that silence would appear to be an acceptance will not work.
Chapter 6Slide 18
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT IS REQUIRED OF AN ACCEPTANCE?
Bilateral—requires that the offeree accept by communicating the requested promise to the offeror.
Ex: Seller promises a load of topsoil for $65.
Homeowner verbally accepts
Chapter 6Slide 19
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT IS REQUIRED OF AN ACCEPTANCE?
Unilateral—offeree indicates acceptance by performing his/her obligations under the contract.
Ex: Publicly posted reward for a lost item
You find the item and return it
Chapter 6Slide 20
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
What are the requirements of an effective acceptance?
