How a Contract
Begins
Section 4.2
Yudelis Fernandez
Jose Ginebra
Andrea Andino
Eduardo Salazar
Ruben Ginebra
Eduardo Rodriguez
• An offer is a proposal by one party to another party to
enter into a legally binding agreement.
• An offer has three basic requirements:
 made seriously
 definite and certain
 communicated to the offeree
Requirements of an Offer
• An offer must be made with the intention of entering into
a legal obligation.
• Invitations to negotiate - are invitations to deal, trade, or
make an offer.
• If a customer says he wants to buy merchandise, they are
making an offer to buy the advertised price.
• The court considers some advertisement as offers when
they contain specific promises.
Serious Intent
• An offer must be definite and certain to be enforceable.
Definiteness and
Certainty
• Offers may be by telephone, letter, telegram, fax, e-mail,
or by any other method that communicates the offer to the
offeree
Communication to the
Offeree
• The second element of a legally binding contract is
acceptance of the offer by the offeree.
• The acceptance must be unconditional and must follow
the rules regarding the method of acceptance,
Requirements of an
Acceptance
• The mirror image rule means that the terms stated in the
acceptance must exactly mirror or match the terms of the
offer.
• A counteroffer is a response to an offer in which the
terms of the original offer are changed.
Unconditional Acceptance
• Contract comes into existence.
• When the parties are dealing face-to-face or on the
telephone , no especial problem exists
• According to common law , an acceptance that must be
sent over long distances is effective when it is sent.
• Common law also says that an acceptance is implied
when the offeror accepts by the same or faster means than
that used by the offeror
• Sometimes , an offer specifies that it must be accepted by
an action must take place before there is an acceptance
Methods of Acceptance
• Even though an offer has been properly communicated to
the offered, it may be terminated.
• This termination may occur in any of five ways:
revocation , rejection, counteroffer, expiration of time,
and death or insanity
Termination of an offer
• Revocation is the taking back of an offer by the offeror.
• The offeror has a change of mind or circumstances and
decides to withdraw the offer before it has been accepted.
• Important rules that govern revocation.
• An offer can be revoked any time before it is accepted
• A revocation becomes effective when it is received by or
communicated to the offeree.
Revocation
• Rejection is a refusal on an offer by the offeree that
brings the offer to an end.
Rejection
• A counteroffer ends the first offer.
Counteroffer
• If the offeror sets a time limits for the acceptance to the
offer, it must be honored.
Expiration of Time
• If the offeror dies or becomes insane before the offer is
accepted, the offer comes to an end.
• Death does not end and offer, it does not end a contract,
except for contracts related to personal services.
Death or Insanity
Business
The end