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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING
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Contract Law: Offer and Acceptance

Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. An offer is an indication by one person to another of their willingness to contract on certain terms without further negotiations. A contract is then formed if there is express or implied agreement. A contract is said to come into existence when acceptance of an offer has been communicated to the offeror by the offeree.

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Contract Law: Offer and Acceptance

  1. 1. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 11 Offer and Acceptance Unit 7
  2. 2. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING Offer & AcceptanceOffer & Acceptance SlideSlide 22 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.
  3. 3. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 33 CONTRACT REQUIREMENTS There are six major requirements that must be satisfied before courts will treat transactions as contracts. Offer and acceptance Genuine assent Legality Consideration Capacity Writing Offer & AcceptanceOffer & Acceptance
  4. 4. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 44 CONTRACT REQUIREMENTS Offer and AcceptanceOffer 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 wasto whom it was communicatedcommunicated Offer & AcceptanceOffer & Acceptance
  5. 5. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 55 REQUIREMENTS OF AN OFFER Expression of intent to create a legal obligation Offer must be complete and clear Offer must be communicated to the offeree Offer & AcceptanceOffer & Acceptance
  6. 6. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 66 Contract: Painter Example Painter promises to paint house within 30 days for $3,000 (Offer) Homeowner agrees to the time frame and the $3,000 (Acceptance) Painter  OFFEROR Homeowner  OFFEREE Offer & AcceptanceOffer & Acceptance
  7. 7. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 77 CONTRACT REQUIREMENTS  Offer – proposal by an offeror to do something, provided the offeree does something in return  If the offeree accepts the proposal, a contract arises  Valid Offer: 1) Offeror must appear to intend to create a legal obligation (serious) 1) Objective test of the reasonable person 1) Not based on what someone was thinking – unreasonable to expect courts to figure out what you were thinking Offer & AcceptanceOffer & Acceptance
  8. 8. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 88 CONTRACT REQUIREMENTS 2) 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 offer. On 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 complete 3) Offer must be communicated to the offeree Offer & AcceptanceOffer & Acceptance
  9. 9. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 99 Test of Reasonable Person Examines: offeror’s words conduct in light of all relevant facts and circumstances Words spoken in jest / frenzied terror / anger = no offer intended Offer & AcceptanceOffer & Acceptance
  10. 10. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1010 Preliminary Negotiations Tentative terms, inviting others to make offers i.e. “I think I’m interested in selling my laptop computer for around $1,000. Is anybody interested?” -- not an offer Offer & AcceptanceOffer & Acceptance
  11. 11. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1111 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. Offer & AcceptanceOffer & Acceptance
  12. 12. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1212 Where do you stand? Lisa agreed. Lisa would have to call in sick to her evening job as waitress in order to go Calling out sick would cost her more than $100 in wages & tips She still made the call When Brent did not show up to get her, she confronted him Offer & AcceptanceOffer & Acceptance
  13. 13. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1313 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?? Offer & AcceptanceOffer & Acceptance
  14. 14. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1414 Where do you stand? Almost every state would NOT allow such a lawsuit Social invitations do not produce enforceable contracts Offer & AcceptanceOffer & Acceptance
  15. 15. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1515 Social Arrangements Friends agreeing to go to movies Social arrangements are not contracts Offer & AcceptanceOffer & Acceptance
  16. 16. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1616 Offer Must be Complete & Clear Terms must be sufficiently complete and clear to allow a court to determine what the parties intended Offers should contain price / subject matter / quantity Offer & AcceptanceOffer & Acceptance
  17. 17. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1717 Complete Terms Amount of detail depends on complexity of transaction i.e. Real estate sale (identify lot, price, terms of payment, delivery date) Candy bar sale (price, subject matter, quantity) Offer & AcceptanceOffer & Acceptance
  18. 18. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1818 Implied Terms Terms can be implied by law or common business practice i.e. Merchants and customers - price is not specified; current market price is the basis for the contract Offer & AcceptanceOffer & Acceptance
  19. 19. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 1919 Advertisements NOT offers - invitationsinvitations to make offers Do advertisements make offers to the would-be buyers? NO -- Customers make offers to buy Sellers must make reasonable supply available – no expectation to meet every demand Offer & AcceptanceOffer & Acceptance
  20. 20. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 2020 Advertisements  Can be offers: 1) Written clearly and indicating limited quantities -- book example of selling car to first person 2) Asks offeree to perform an act as a way of accepting -- first person to appear at the main door of a shopping mall on … Offer & AcceptanceOffer & Acceptance
  21. 21. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 2121 Offer Must be Communicated to Offeree Non-intended offeree cannot accept the offer Cannot accept if unaware of offer (reward) Offer & AcceptanceOffer & Acceptance
  22. 22. LAW FOR BUSINESS AND PERSONAL USELAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING© SOUTH-WESTERN PUBLISHING SlideSlide 2222 E-Contracts: Agreeing Online E-contracts are really no different than regular hard copy contracts Adult who signs a contract is presumed to have read and agreed to the contract's terms Adults who click "I Accept" have done the equivalent of signing a written offer Consequences are the same whether they realize it or not Offer & AcceptanceOffer & Acceptance

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