Business Law Notes

Ch5 Formation of a Contract: Offer and Acceptance

An invitation is not an offer; a merchant is not obligated to sell to everyone who reads an ad (its supply may be limited) he is the offeree

Both parties must be aware of the offer and counter offers, else any coincidental acceptance under the same terms still don’t qualify as an acceptance

Protection against Standard Form Contracts

1. If business is regulated by govt board, its terms are subject to approval

2. Some segments of the public are offered special protection i.e. consumers

3. For unregulated activity, the public receives as much protection as the courts can find in contract laws

All terms binding?- if offeree convinces courts that she wasn’t aware of a certain term, then the offerer must prove that it made sufficient efforts to make the offeree aware of it, else the offeree is not bound by it

Contract terms on a sign must be evident to offeree AT the time of making contract

How an offer may lapse:

1. Not accepted within specified time

2. Not accepted within reasonable time (if not specified)

3. Either party dies or becomes insane prior to acceptance

Revocation

Offeror may revoke an offer any time before acceptance, even if he promised elsewise. He must provide notice to make it effective

Must revoke before it is accepted

If offeree has sufficient reason to believe that the offer may have been revoked even without notice, the courts will consider it revoked

Offeree Powers

Can bind offeror to keep offer open for a specified time

1. Obtaining written offer under seal

2. Option; pays money to offeror for exclusivity rights and valid acceptance times

An inquiry whether this is the best offer by the offeree isn’t a rejection, the offer still stands

Elements of Acceptance

-must be made in some positive form

Silence as Acceptance

1. If parties have habitually used this method to communicate acceptance

2. Agreed in advance that silence is sufficient

If a...