6
CHAPTER
Offer and Acceptance
6-1 Creation of Offers
6-2 Termination of Offers
6-3 Acceptances
Law for Business and Personal Use
© Thomson South-Western
6-1 Creation of Offers
GOALS
 List the elements required to form a
contract
 Describe the requirements of an offer
Chapter 6
Slide 2
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FOCUS
 What distinguishes a contract from
other agreements?
Chapter 6
Slide 3
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WHAT MUST BE IN
A CONTRACT?
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Offer and acceptance
Genuine assent
Legality
Consideration
Capacity
Writing
Chapter 6
Slide 4
Law for Business and Personal Use
© Thomson South-Western
What elements are required to
form a legally enforceable
contract?
Chapter 6
Slide 5
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REQUIREMENTS OF AN
OFFER
 Contractual intent must be present
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Jests
Statements made in anger or terror
Preliminary negotiations
Social agreements
 Offer must be communicated to the offeree
 Essential terms must be complete and
definite
Chapter 6
Slide 6
Law for Business and Personal Use
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What are the requirements of an
offer?
Chapter 6
Slide 7
Law for Business and Personal Use
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6-2 Termination of Offers
GOALS
 Describe the various ways to end offers
 Explain how an offeree can ensure an
offer will remain open
Chapter 6
Slide 8
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FOCUS
 Can offers to contracts be terminated at
different times depending on the
subject matter of the offer?
Chapter 6
Slide 9
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HOW CAN OFFERS
BE ENDED?
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Revocation by the offeror
Time stated in the offer
Reasonable length of time
Rejection by the offeree
Counteroffer
Death or insanity of either the offeror or
offeree
 Destruction of the specific subject matter
Chapter 6
Slide 10
Law for Business and Personal Use
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Explain two ways in which offers
can be terminated.
Chapter 6
Slide 11
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HOW CAN AN OFFER BE
KEPT OPEN?
 Options—offeree give the offeror
something of value in return for a
promise to keep the offer open, this
agreement is itself a binding contract.
The offer may not be withdrawn during
the period of the option.
 Firm offers—offer made in writing
Chapter 6
Slide 12
Law for Business and Personal Use
© Thomson South-Western
How could an offeree ensure that
an offer will stay open for a set
period of time?
Chapter 6
Slide 13
Law for Business and Personal Use
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6-3 Acceptances
GOALS
 Discuss the requirements of an
effective acceptance
 Determine at what point in time an
acceptance is effective
Chapter 6
Slide 14
Law for Business and Personal Use
© Thomson South-Western
FOCUS
Scenario
 John makes an offer to Paul. Paul is
not interested, but Paul’s friend, who
was standing nearby, hears the offer
and says she accepts.
Question
 Has a contract been formed?
Chapter 6
Slide 15
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WHAT IS REQUIRED
OF AN ACCEPTANCE?
 Only offerees may accept
 The acceptance must match the offer
 Acceptance must be communicated to
the offeror
 Silence, bilateral, unilateral acceptance
 Modes of contractual communication
 When acceptances are effective
Chapter 6
Slide 16
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WHAT IS REQUIRED
OF AN ACCEPTANCE?
 Silence—offeree is not obligated to
reply to offers made. Offers worded so
that silence would appear to be an
acceptance will not work.
Chapter 6
Slide 17
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WHAT IS REQUIRED
OF AN ACCEPTANCE?
 Bilateral—requires that the offeree
accept by communicating the
requested promise to the offeror.
Ex: Seller promises a load of topsoil for $65.
Homeowner verbally accepts
Chapter 6
Slide 18
Law for Business and Personal Use
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WHAT IS REQUIRED
OF AN ACCEPTANCE?
 Unilateral—offeree indicates
acceptance by performing his/her
obligations under the contract.
Ex: Publicly posted reward for a lost item
You find the item and return it
Chapter 6
Slide 19
Law for Business and Personal Use
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What are the requirements of an
effective acceptance?
Chapter 6
Slide 20
Law for Business and Personal Use
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