Question

1) Identify the three essentials of an offer and explain briefly the requirements associated with each. 2)State the 7 ways an offer may be terminated other than by acceptance. 3)Compare the traditional and modern theories of definiteness of acceptance of an offer, as shown by the common law "mirror image” rule and by the rule of the UCC.4)Describe the five situations limiting an offeror's right to revoke her offer. 5) Explain the various rules that determine when an acceptance takes effect.

Answer 1

I . Following are the legal rules or essentials of a valid offer:

1. It may be expresss or implied: An offer may be made either by words or by conduct. An offer, which is made by words spoken or written, is called an express offer. The offer, which is made by the conduct of a person, is called an implied offer.

2. It must create legal relation: The offer must be made in order to create legal relations otherwise, there will be no agreement. If an offer does into give rise to legal obligations between the parties it is not a valid offer in the eye of law.

3. It must be definite & clear: An offer must be definite and clear, if the terms of an offer are not definite and clear, it cannot be called a valid offer. If such offer is accepted it cannot create a binding contract.

4. It is different from invitation to offer: An offer is different from an invitation to offer. It is also called invitation to treat or invitation to receive offer. An invitation to offer looks like offer but legally it is not offer. In the case of an invitation to offer, the person sending out the invitation does not make an offer but only invites the other party to make an offer. His object is to inform that he is willing to deal with anybody who after getting such information is willing to open negotiations with him. Such invitations for offers are not offers according to law and so cannot become agreement by acceptance.

5. It may be specific or general: When an offer is made to a specified person or group of persons, it is called specific offer. Such an offer can be accepted only by the person or persons to whom it is made. A general offer, on the other hand, is one, which is made to public in general and it may be accepted by any person who fulfils the conditions mentioned in it. Both specified and general offers are valid.

6. It must be communicated to the offeree: An offer is effective only when it is communicated to the offeree. If an offer is not communicated to the offeree it cannot be accepted. Thus, an offer, which is not communicated, is not a valid offer. It applies to both specific and general offers.

^_II. There are a number of ways for an offer to be terminated. They are events that may occur after an offer has been made which bring it to an end so that it can no longer be accepted. An offer is terminated in the following circumstances:
1. Revocation
2. Rejection
3. Lapse of time
4. Conditional Offer
5. Operation of law
6. Death
7. Acceptance
8. Illegality
III.The common law mirror image rule tells us that to form a contract the terms of the
acceptance should match the terms of the offer. This rule intuitively makes sense: if A
offers to sell B a blue car for $1,000 and B says he accepts the offer for one red bicycle
for $250 the parties did not reach an agreement. B isn’t “accepting” the offer, he is
completely changing the offer.
But the drafters of the Uniform Commercial Code (UCC) were concerned that when
two business people enter into a transaction sometimes the offers and acceptances
don’t match up 100% but a court should not allow either party to walk away from the
deal – – the UCC favors forming a contract. Also, the UCC was concerned with
circumstances where parties form a contract by conduct, and the party who sent the
last form was always able to dictate the terms of the contract.
UCC 2-207 provides:
(1) A definite and seasonable expression of acceptance or a written confirmation
which is sent within a reasonable time operates as an acceptance even though it states
terms additional to or different from those offered or agreed upon, unless acceptance
is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the
contract. contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a
reasonable time after notice of them is received.
What does this mean? In a contract for the sale of goods, if there are additional terms
in the acceptance, we still have a contract. The additional terms become proposals for
addition to the contract.
If we have two merchants — persons in the business of buying and selling the goods
involved in the transaction – – the additional become part of the contract. The
additional terms become part of the contract unless one of the three exceptions listed
in (a) – (c) applies.
Let’s focus on (b) for this post. The additional term becomes part of the contract if
the additional term does not materially alter the offer. A material change would mean
a a big or important change to the terms of the offer.
For example, let’s say A offers to sell B a tractor for $20,000. B says he agrees to the
deal but adds an additional term: a standard warranty period that most businesses
apply. A court is likely to say that B’s additional term did not materially alter the
contract. The warranty period would become part of the contract unless A
objects. B’s acceptance did not precisely mirror the offer but we have a contract for
the tractor.