MGMT 402 - Exam #2 - Ch 9 - Short

What is an offer, and who are the offeror and offeree?

An offer proposes a deal that the recipient can accept. The offeror makes it; the offeree receives it.

What does intent require for a valid offer?

Words and conduct must show a serious intention to make a deal, judged reasonably from the circumstances. An obvious joke generally is not an offer.

What does communication require for a valid offer?

The offer must be intentionally communicated to the offeree and becomes effective when received. Overhearing someone discuss a possible sale does not necessarily create an offer to you.

What are material terms?

Essential details that make the proposed deal sufficiently definite, such as the item, price, and quantity. Example: "My bicycle for $100."

How do express and implied terms differ?

Express terms are specifically stated; implied terms are understood from the circumstances. Example: An unstated delivery date may mean delivery within a reasonable time.

How are offers and acceptance made at an ordinary auction?

The bidder makes an offer, and the auctioneer accepts when the hammer falls or the sale is announced as complete. A bidder may generally retract before completion, without automatically reviving an earlier bid.

How do auctions with and without reserve differ?

With reserve, the seller may withdraw the item before the sale is complete; this is the default. Without reserve, the seller generally cannot withdraw after bids are called for unless no bid arrives within a reasonable time.

How is a reward offer accepted?

By completing the requested act, generally with knowledge of the reward. This is a unilateral contract: a promise exchanged for performance. Example: Returning a lost dog for a $100 reward.

Are advertisements generally offers?

No. They generally invite customers to make offers. Example: Raj offers to buy a TV at the advertised $99 price; Raj is the offeror and the store is the offeree.

When can an advertisement function as an offer under your professor's explanation?

When it sufficiently specifies the deal and identifies a particular item or limited group. Example: A car advertisement identifies the exact vehicle by VIN.

How does rejection terminate an offer?

The offeree declines it, ending the power to accept. The offeree cannot automatically revive it by later saying yes.

What is a counteroffer?

A rejection of the original offer combined with a new proposal; the parties switch offeror/offeree roles. Example: Responding to a $100 bike offer with "I'll buy it for $80."

Is asking about different terms always a counteroffer?

No. A mere inquiry may leave the original offer open; making agreement conditional on changed terms generally creates a counteroffer.

What is revocation?

The offeror withdraws the offer before acceptance; it generally becomes effective when the offeree receives it. Rejection comes from the offeree; revocation comes from the offeror.

How do death or incapacity terminate an offer under the lecture's rule?

The offeror's death or legal incapacity before acceptance generally terminates an ordinary outstanding offer.

What is lapse of time?

An offer ends when its stated deadline passes or, without a deadline, after a reasonable time.

How does destruction of the subject matter affect an offer?

Destruction of the specific item before acceptance terminates the offer. Example: The offered bicycle is destroyed before the buyer accepts.

What is unequivocal acceptance?

A clear, definite agreement to the offer. Example: "Yes, I'll buy your bike for $100."

What is the mirror-image rule?

Acceptance must match the offer's terms. A response changing the deal is ineffective as acceptance and generally constitutes a rejection and counteroffer.

What does proper communication of acceptance require?

Follow any required method and deadline; otherwise use an appropriate reasonable method. Example: If acceptance must be by text, an email does not satisfy that requirement under the lecture's example.

What is the mailbox rule?

A properly dispatched acceptance is generally effective when sent, while revocation is effective when received, assuming the rule applies. An express requirement that acceptance be received controls instead.

What happens when acceptance and revocation cross paths?

If valid acceptance is sent before revocation is received, acceptance wins. If revocation is received first, the offer has ended and cannot be accepted.

What is assent?

Both parties voluntarily agreeing to the same thing—a meeting of the minds.

What is a mistake of fact?

A misunderstanding about a material fact that may prevent genuine agreement and permit rescission. Example: Each party means a different ship named Peerless. Not every factual error permits cancellation.

What is a mistake of value?

Misjudging what an agreed item is worth; this generally does not permit rescission. Example: Under the lecture's painting example, discovering that a $10 painting is valuable does not alone undo the sale.

What are the four elements of fraudulent misrepresentation?

A false statement of material fact, intent to deceive, reasonable reliance, and resulting harm. Example: A seller knowingly lies about gas mileage, inducing a purchase that harms the buyer; rescission may be available.

What is duress?

Agreement caused by a wrongful threat of harm, making consent involuntary. Example: "Sign this contract or I'll hurt your family."

What is undue influence?

Abuse of a trusted relationship to exploit someone's vulnerability and obtain agreement. Your professor emphasizes a fiduciary relationship involving heightened trust. Example: A nurse manipulates a vulnerable patient into selling a car cheaply.

What is unconscionability under your professor's explanation?

Extreme unfairness involving unequal bargaining power, exploitation, and no reasonable alternative. Unequal power alone is insufficient; an ordinary Verizon contract is not automatically unconscionable because customers may choose another provider.