Lecture Dynamic business law (3/e) - Chapter 14: Agreement. After reading this chapter, you will be able to answer the following questions: What are the elements of a valid offer? How may an offer terminate? What are the elements of an acceptance? | Chapter 14 Agreement Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 14: Agreement 14- Elements of a Valid Offer Manifestation of offeror’s intent to be bound Intent determined by objective, “reasonable person” standard Preliminary negotiations and advertisements do not constitute offers Definite and certain terms (including subject matter, price, quantity, quality, and parties) Communication of offer to offeree (or offeree’s agent) In order for an offer to be valid, there must first be a manifestation of the offeror’s intent to be bound by contract. Intent is determined by an objective, “reasonable person” standard. Preliminary negotiations and advertisements do not constitute offers. A valid offer also requires definite and certain terms, including subject matter, price, quantity, quality, and the names of the contracting parties. Finally, a valid offer requires communication of the offer from the offeror (or the offeror’s agent) to the offeree (or the offeree’s agent.) 14- Auctions Auction With Reserve Seller merely expresses intent to receive offers Auctioneer (as representative of seller) may withdraw item from auction at any time before “hammer falls” Before hammer falls (signaling acceptance of offer), bidder/offeror may revoke bid Auction Without Reserve Seller must accept highest bid Auctions can be classified as either “with reserve” or “without” reserve. In an auction with reserve, the seller merely expresses the intent to receive offers. The auctioneer, as a representative of the seller, may withdraw the item from the auction at any time before the “gavel falls.” Before the gavel falls (signaling acceptance of offer,) the bidder-offeror may revoke his or her bid. In an auction without reserve, the seller must accept the highest bid. 14- Termination of Offer Revocation Rejection Counteroffer Death/Incapacity of offeror | Chapter 14 Agreement Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 14: Agreement 14- Elements of a Valid Offer Manifestation of offeror’s intent to be bound Intent determined by objective, “reasonable person” standard Preliminary negotiations and advertisements do not constitute offers Definite and certain terms (including subject matter, price, quantity, quality, and parties) Communication of offer to offeree (or offeree’s agent) In order for an offer to be valid, there must first be a manifestation of the offeror’s intent to be bound by contract. Intent is determined by an objective, “reasonable person” standard. Preliminary negotiations and advertisements do not constitute offers. A valid offer also requires definite and certain terms, including subject matter, price, quantity, quality, and the names of the contracting parties. Finally, a valid offer .
