Chapter 9: Offer and Acceptance

Business Law - Midterm

Which of the following is a valid offer?

Eric offers to buy Arun’s house for $775,000 with no contingencies because Eric’s lease ends in two months. Arun wants to think about it and six days later has not yet responded.

Which act or statement is a valid offer?

a detailed advertisement

What elements are required for an offer to be effective under the common law?

• the offeror must intend to be bound by the offer

• the offer must be communicated to the offeree

• the terms of the offer must be reasonably definite so that all parties understand them

What conditions must be met for an offer to be legally accepted?

• it may only be accepted by the intended offeree or the offeree’s agent

• acceptance must be unequivocal with no requests for changes in the offer

How may a revocable offer effectively be revoked?

• The offeror may take an action that contradicts the offer and make that known to the offeree

• The offeror may withdraw the offer with a clear expression

What happens when a party with the right to avoid a contract chooses to not avoid it?

the contract is ratified

How may an offer be terminated?

• An offeror may terminate an offer by revocation.

• A reasonable amount of time has passed.

• The offeree may make a counteroffer.

Which of the following words, if added to an offer, will cause the offer to fail for definiteness?

• In the future, as in "I will sell you my boat sometime in the future for $1000"

• Might, as in "I might want to sell you my boat for $1000"

If two parties have an on-going oral agreement that that one will ship and the other will accept 50 pounds of produce each week unless the buyer informs the seller one week before not to ship the next order, then the buyer's failure to speak up and tell the shipper not to send the produce:

qualifies as acceptance of that week's delivery offer.

Which of the following statements is an offer?

I will sell you my house for $400,000.

In an auction, the bidder is:

the offeror

Must all terms of a deal be included in an offer?

No, but the terms required will depend on the type of contract.

Owen offers to sell his motorcycle to Julian for $5,000. After he makes the offer, Owen has second thoughts. Owen can revoke the offer to sell his motorcycle to Julian:

as long as Julian has not yet accepted the offer.

Milo is the owner of a sporting goods store that has only been open for three months. The holiday season is coming up, and Milo realizes that he will need extra help. Milo asks his friend Jess to help him out at the store. Milo and Jess agree that Jess will work during the months of November and December. However, because Milo is unsure how much help he will need and how much he will be able to pay, they agree to decide each week on the hours that Jess will work for the following week, and to decide the hourly rate after Jess has worked two weeks before she receives her first paycheck. Just before November 1, Jess takes a job at another store. If Milo tries to sue Jess for breach of contract, the court will probably decide:

that the parties had no contract because the terms of the offer were not definite.

Sarah is shopping at Sylvia’s thrift store, and notices that the inside of the store needs repainting. Sarah offers to paint the store for $400. Sylvia does not respond to Sarah’s offer. Later that day, Sarah returns to the store with painting supplies in hand and begins painting the store. When Sarah is finished, she demands payment of $400 from Sylvia. Will Sylvia have to pay Sarah for painting the store?

Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract.

The weekly Kroger advertisement states that five-pound chubs of ground chuck are available for eighty-nine cents per pound. Arlene sees the advertisement; she realizes that ground chuck has not been priced this low in quite some time, so she hurries to the store to purchase some. Arlene loads seven chubs of ground chuck in her shopping cart. When she goes to the checkout to pay, however, the cashier informs Arlene that the price in the advertisement is a typo and that the correct price is $1.89 per pound. Arlene insists that the store must honor the price listed in the advertisement, because it is an offer that she has just accepted. The cashier calls the store manager for a decision. The store manager will likely explain to Arlene:

that advertisements are not offers, but merely a request for offers.

Quon decides to sell his antique roadster, so he places an ad on Craigslist. He lists the roadster as a 1957 Mercedes Benz 300SL Roadster, describes it as in good working condition, and states that no reasonable price will be refused. Fern responds to the ad and offers to pay $25,000 to Quon for the car, which Quon agrees to. In this scenario, who is the offeror?

Fern is the offeror.