Chapter Twelve Flashcards
What are the five things that can happen after an offer?
Acceptance, Lapse, Termination by Operation Of Law, Rejection, Revocation and Counter Offers
What does lapse mean?
An offer was made and the offeree did nothing in response
What happens to the offer after a offeree does nothing in response?
After a certain amount of time, the offer dies and offeree no longer has the power of acceptance
In general, how long is an offer good for?
A Reasonable Time
What is a reasonable time?
It depends on what is being sold. If its in a rapidly changing market, such as stocks or commodities, offers may only last a few minutes.
What is an option k?
Option Contract means that you can pay money to hold open an offer.
What is important about upholding an option k?
If the parties enter into an option k and the seller sells the goods anyways, the seller will be liable for breach of k
What is Termination by Operation of Law?
The k automatically expires as a matter of law because of the death, insanity or illegality of the k prior to acceptance.
It becomes illegal before the offer is accepted, Someone dies, Someone goes insane
What does rejection mean?
The offeree expressly declines the offer, meaning the offeree says no verbally or written.
What is the effect of a rejection?
An express rejection “kills” the original offer, the offeree no longer has the power of acceptance.
How is a counter offer an example of rejection?
By changing the amount of the initial offer, the original offer dies and the offeror becomes the offeree with the power of acceptance.
What is a revocation?
When the offeror takes back the offer prior to acceptance
When must a revocation take place?
As long as the offeror takes back the offer before the offeree can accept, there is a revocation
What are three contracts that may not be revoked?
Unilateral Contracts, Option Contracts, and Merchant Firm Offers under U.C.C 2-205
Why can’t a unilateral contract be revoked?
If the offeree starts the act, then acceptance has begun
