The Offer

An offer is a proposal of an exchange to another party.  In the world of contracts, the offeror is the person making the offer.  The offeree is the person accepting the offer.  If accepted, a contract arises.  In order for a valid offer to occur, the following must happen:

1.  The offeror must appear to intend to create a legal obligation;
2.  The terms must be definite and complete (complete and clear terms);
3.  The offer must be communicated to the offeree (someone else cannot accept).

Question #1: (4 points)

The law will only recognize that an offer exists when the offer appears serious about creating a legal obligation.  They will use the "Reasonable Person Test".  You learned about the "Reasonable Person Test" for torts.  How do you think the "Reasonable Person Test" is applied to contract law?  This is an opinion question.  Answer in complete sentences using prior knowledge for complete credit.

Question #2: (4 points)

When we discussed torts and litigation, we said that a defendant can counter sue and file a counterclaim.  In contract law, an offeree can propose a counteroffer.  What is a counteroffer?  Give a scenario when you might propose a counteroffer in the future.  Use this link to find read more about a counteroffer. 

Acceptance

Acceptance is the agreement by the offeree to the terms of the offer.  Acceptance must be absolute and unconditional.  Acceptance must also be communicated to the offeror.  

Question #3: (3 points)

1.  Using this link on acceptance to explain the three types of acceptance.

Question #4:  (6 points) - Use the business law binders, page 39.

a.  When are oral acceptances effective?
b.  When is mailed acceptance effective?
c.  When is faxed acceptance effective?