1. LESSON 7-2
Termination of Offers

2. What you will learn… How an offeror can end an offer
How an offeree can end an offer
How an offer, once made, cannot be ended by either party involved in contractual negotiations

3. Key things to understand….
Offers do NOT last forever
The person making the offer (Offeror) can always back out of selling something, because “they” own the product or service
Terminating an offer means to end it

4. Termination Method #1 Revocation by the offer
Revocation means to “Take Back” the offer
Revocation can take place “Any time before the offer is accepted by the offeree”
Revocation must be communicated to offeree

5. Termination Method #2
If a specific time is stated in the offer when the offeree must accept by
Once the time has come and passed, the offer is terminated
Offeror can state they must receive acceptance by certain date as well

6. Termination Method #3
If a “reasonable length of Time” passes, an offer ends
Reasonable length of time is based on product (Ex: Food, Holiday goods, planting seeds, etc..)
Used if no specific length of time is stated to give a person to accept an offer (Open ended)
Offeror can always sell to “anyone” who accepts first

7. Termination Method #4 Rejection by the offeree
Once an offer is made to an offeree, only they can decide and if they reject the offer, they cannot later say they accept

8. Termination Method #5
Offers must be accepted “exactly” as they are made
Any change of the original offer by the offeree is called a counteroffer
Counteroffers terminate the original offer and the offeror can accept the change, decide not to sell or make their own counteroffer again

9. Termination Method #6 Death or Insanity of the offeror or offeree
Means that if either party dies (or goes clinically insane) at the time of negotiations, the offer ends

10. Why keep an offer open and not terminate?
If I (the offeror) want to sell or NEED to sell my product or service
Applies to both retail transactions (UCC Law) or non-retail transactions (Common Law)
Rules or laws guide what you must do

11. Must an offer be kept Open?
Generally, the offeror is not obligated to keep ANY offer open, as they gain nothing (Consideration) by doing so
Consideration usually means money from the sale or the product you purchase
Consideration buys the offeree time to decide usually and even then, the offeror can rescind the offer if they change their mind

12. Are the Rules Different for Keeping Offers Open?
Yes!
Depending on the type of Offer
All contracts are either business based (UCC Law) or non- business based (Common Law)

13. What are Business Based Agreements?
Retailers or business rules
Based on UCC Law
Offers are kept open by creating a “Firm Offer”
A firm offer means a price is good for a period of time no less than 3 months
Ex) Rain check

14. How are Non-Business Based Agreements treated?
Based on Common Law
Offers are kept open by creating an “Option”
An option is a form of collateral (Cash down, property) used to keep an offer open for a specific time

15. 7-2 Lesson Review Sheet Due at the end of class tomorrow
Review and quiz within next 3 classes