Offer and Acceptance

  • View
    48

  • Download
    0

Embed Size (px)

DESCRIPTION

Lessons. CHAPTER 7. Offer and Acceptance. 7-1 Creation of Offers 7-2 Termination of Offers 7-3 Acceptances. GOALS. LESSON 7-1. Creation of Offers. List the elements required to form a contract Describe the requirements of an offer. Hot Debate – pg. 110. - PowerPoint PPT Presentation

Text of Offer and Acceptance

  • Offer and Acceptance 7-1Creation of Offers 7-2Termination of Offers 7-3AcceptancesCHAPTER 7

    Chapter 7

  • Creation of OffersList the elements required to form a contractDescribe the requirements of an offerLESSON 7-1

    Chapter 7

  • Hot Debate pg. 110Should Celia be bound because the literal meaning of her words suggests she intended to sell the car?Argument can be made - should be bound by literal meaning of wordsShould Celia not be bound to sell the car because the circumstances (new car stalls and people are honking) suggest that she did not intend to sell?Argue - literal meaning of sentences often is quite different from what someone intended

    Chapter 7

  • WHAT IS A CONTRACT?A contract is an agreement that courts will enforce.Contracts between two parties are the basis for all economic activity.Contracts are the legal links between the individuals and companies producing and consuming goods and services.

    Chapter 7

  • CONTRACT REQUIREMENTSThere are six major requirements that must be satisfied before courts will treat transactions as contracts.Offer and acceptanceGenuine assentLegalityConsiderationCapacityWriting

    Chapter 7

  • CONTRACT REQUIREMENTSOffer and Acceptance there must be a serious, definite offer to contract.And the terms of the offer must be accepted by the party to whom it was communicated

    Chapter 7

  • CONTRACT REQUIREMENTSGenuine Assent cannot be based on:DeceptionImportant mistakeUse of unfair pressure to obtain offer/acceptance

    Chapter 7

  • CONTRACT REQUIREMENTSLegality - make up of agreement must be legali.e. Cannot create an agreement to have someone commit a crime for you

    Chapter 7

  • CONTRACT REQUIREMENTSConsideration agreement must involve both sides receiving something of legal value as a result of the transaction

    Chapter 7

  • CONTRACT REQUIREMENTSCapacity parties must be able to contract for themselves

    Chapter 7

  • CONTRACT REQUIREMENTSWriting - some agreements must be placed in writing to be fully enforceable in court

    Chapter 7

  • Contracts - oral or written Does it matter if a contract is only oral?

    Chapter 7

  • REQUIREMENTS OF AN OFFERExpression of intent to create a legal obligationOffer must be complete and clearOffer must be communicated to the offeree

    Chapter 7

  • Contract: Painter ExamplePainter promises to paint house within 30 days for $3,000 (Offer)Homeowner agrees to the time frame and the $3,000 (Acceptance)

    Painter OFFERORHomeowner OFFEREE

    Chapter 7

  • CONTRACT REQUIREMENTSOffer proposal by an offeror to do something, provided the offeree does something in returnIf the offeree accepts the proposal, a contract arisesValid Offer: Offeror must appear to intend to create a legal obligation (serious)Objective test of the reasonable personNot based on what someone was thinking unreasonable to expect courts to figure out what you were thinking

    Chapter 7

  • CONTRACT REQUIREMENTS2) Appearance counts If you think you are joking, but a reasonable person would interpret your conduct as indicating that you intend to contract you have made an offerOn the other hand, if you are serious, but a reasonable person would interpret your conduct as a joke, then no legally enforceable offer is made

    2) terms must be definite and complete3) Offer must be communicated to the offeree

    Chapter 7

  • Test of Reasonable PersonExamines: offerors wordsconduct in light of all relevant facts and circumstancesWords spoken in jest / frenzied terror / anger = no offer intended

    Chapter 7

  • Preliminary NegotiationsTentative terms, inviting others to make offersi.e. I think Im interested in selling my laptop computer for around $1,000. Is anybody interested?-- not an offer

    Chapter 7

  • Where do you stand?Brent and Lisa were students in a class on movie production.

    Knowing that the final movie in the Alien Cheerleader trilogy was about to come out, Brent camped out overnight at the theater. He bought two tickets, and then asked Lisa to go with him.

    Chapter 7

  • Where do you stand?Lisa agreed.Lisa would have to call in sick to her evening job as waitress in order to goCalling out sick would cost her more than $100 in wages & tipsShe still made the callWhen Brent did not show up to get her, she confronted him

    Chapter 7

  • Where do you stand?Brent admitted he sold the tickets to someone else for $50 each

    Should Lisa be allowed to sue Brent for not taking her to the movie??

    Chapter 7

  • Where do you stand?Almost every state would NOT allow such a lawsuit

    Social invitations do not produce enforceable contracts

    Chapter 7

  • Social ArrangementsFriends agreeing to go to moviesSocial arrangements = not contracts

    Chapter 7

  • Offer Must be Complete & Clear terms must be sufficiently complete and clear to allow a court to determine what the parties intendedPg. 112 In this case

    Chapter 7

  • Complete TermsOffers should contain price / subject matter / quantity Amount of detail depends on complexity of transactioni.e. Real estate sale (identify lot, price, terms of payment, delivery date)Candy bar sale (price, subject matter, quantity)

    Chapter 7

  • ClearIn this case - Delgados agreed on one lot no specification as to which lot.lacking essential information

    Chapter 7

  • READ B E F O R E signing

    Chapter 7

  • Implied TermsTerms can be implied by law or common business practicei.e. Merchants and customers - price is not specified; current market price is the basis for the contract

    Chapter 7

  • AdvertisementsNOT offers - invitations to make offersWhats Your Verdict pg. 112Did the Anchors Aweigh advertisement make offers to the would-be buyers?Customers: made OffersSellers must make reasonable supply available no expectation to meet every demand

    Chapter 7

  • AdvertisementsCan be offers:Written clearly and indicating limited quantities -- book example of selling car to first personAsks offeree to perform an act as a way of accepting -- first person to appear at the main door of a shopping mall on

    Chapter 7

  • Offer Must be Communicated to OffereeNon-intended offeree cannot accept the offerCannot accept if unaware of offer (reward)

    Chapter 7

  • Whats your Verdict?Pg. 111Did the two friends create a contract?Yes even though delivery and payment will occur later

    Chapter 7

  • E-Contracts: Agreeing Online

    When I'm online and I click on a button that says "I ACCEPT," are all of those terms actually enforceable against me, even if I didn't read them? West's Digital Video Library video #23

    Chapter 7

  • If you dont satisfy the laws requirement for creating an offer, then you usually dont have a contract.

    TRUE / FALSE

    Chapter 7

  • TRUE

    Chapter 7

  • To be valid, an offer must indicate an intent to create a legal obligation.

    TRUE / FALSE

    Chapter 7

  • TRUE

    Chapter 7

  • Which of the following are reasons why an offer may not be valid?A) It is apparent that the speaker is jokingB) It is clear that the speaker is trying to obtain additional information rather than commit to an agreementC) The subject of the agreement is only socialD) all of the above

    Chapter 7

  • D - all of the above

    Chapter 7

  • The requirement that an offeror show an intent to contract is a(n) ______ test rather than a test which focuses on the purported offerors actual thoughts.

    Chapter 7

  • Objective

    Chapter 7

  • Which of the following is evidence showing an intent to contractA) spoken or written wordsB) conduct other than speaking or writingC) other facts and circumstancesD) all of the above

    Chapter 7

  • D all of the above

    Chapter 7

  • Advertisements can be offers whenA) they are completeB) they are clearC) they address the problem of numerous recipients and a limited supply of the advertised productD) all of the above

    Chapter 7

  • D - all of the above

    Chapter 7

  • If an offer is made, it can be accepted by anyone who learns of it.

    TRUE / FALSE

    Chapter 7

  • FALSE

    Chapter 7

  • The test of the reasonable person is used by a jury or judge to evaluate all the relevant evidence to determine whether there has been a manifestation of an intent to contract.

    TRUE / FALSE

    Chapter 7

  • TRUE

    Chapter 7

  • To meet the contract requirement of genuine assent, the agreement must not be based onA) deceptionB) an important mistakeC) using unfair pressureD) all of the above

    Chapter 7

  • D - all of the above

    Chapter 7

  • Termination of OffersDescribe how an offeror can end an offerTell how an offeree can end an offerExplain how the parties can create offers that cannot be ended by the offerorLESSON 7-2

    Chapter 7

  • HOW CAN OFFERS BE ENDED?Revocation by the offeror can be revoked anytime before it is accepted by the offereeREVOCATION - right to withdraw an offer before it is acceptedNot effective until communicated to the offeree

    Chapter 7

  • HOW CAN OFFERS BE ENDED?Time stated in the offer offeror may state how and when the offer must be completedi.e. Bank agrees to give loan but specifies acceptance must be received by Oct. 18Boggs mails acceptance on Oct. 17 -- arrives Oct. 20 at bank