Quiz 13: Formation of Contracts: Offer and Acceptance

Business

a) False. N doesn't necessarily have to accept by mail. Unless there is a specifically stated method of acceptance he can communicate his acceptance or refuse of offer through mail, email, or fax. b) False. N had accepted the offer before A revoked it. All N had to do was to make an intent of acceptance, he did his duty to accept the offer it was the telegraph company that made the error. c) True. Once, the offer is accepted A is liable for it even if it wasn't informed N had accepted it. The conflicts in this case may have been avoided if both parties used more instantaneous way of communication. d) False. An agreement was made prior to the error.

While making an offer, the offeror indirectly extends a promise to do something when the offeree does what the offeror requests. Such contracts can be Bilateral or Unilateral. Unilateral Contracts include those offers where the offeror may promise to do something when the offeree fulfills the offeror's request. Only the offeror extends a promise in unilateral contracts. Case Summary : Company BP placed an ad in the newspaper regarding the sale of their mink coats at a special price on first come, first serve basis. The ad also included the time and date of the sale. When ML, first in line, went to the store on the specified date, the coats were unavailable for sale. When she confronted the manager about the same, he told her that the ad was just an invitation and BP had decided to withdraw the offer. In the given case, company BP had in fact extended promise to the customers regarding the $500 mink coats. The statement "First come, first served" made it a unilateral contract. This clearly implied that the person who would be the first one to show up to the store would receive the deal. Hence, ML was eligible for the offer and should have received the coats for $500. Thus, the store had violated the unilateral contract and could be sued under this violation by ML.

a) False. Signing and returning is not necessarily an acceptance, especially when F sent a counteroffer with a different amount. b) True. A counteroffer voids the prior offer price of $150,000 and makes F the offeror with a price of $145,000. c) False. A valid acceptance must be sufficiently similar to the original terms. F responded with different terms making it a counteroffer. d) False. Silence is not acceptance in this case.

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