1. Lesson 7-3 (How are contract offer accepted)
UNIT 2: Contracts
Lesson (How are contract offer accepted)

2. What will you learn?
What are the elements needed to create a valid Acceptance?
How are acceptances made?
Is time a factor in determining when and how an acceptance is effective?

3. What is an acceptance?
An acceptance occurs when a party to whom the offer has been made (The offeree) “agrees” to the proposal.
If I offer to sell a dirt bike for $400, I am the offeror. If someone reading my advertisement shows up and agrees to pay the $400, an acceptance has been made
Ratification (Final agreement) takes place once a contract is signed, payment is made or the products are exchanged

4. Review: 6 parts to a contract?
Offer and Acceptance: Agreement on mutually acceptable terms
Genuine Assent: Not forced into contract or lied to
Legality: Must be legal
Consideration: Money or exchange of value
Capacity: “Understand” your actions
Writing: Most not required to be written

5. What are the 3 requirements of offer and acceptance
Serious and legal offer
Terms of the offer are “definite and complete”
Communicated to the offeree
“Only” the offeree can accept
Acceptance must match the terms of the offer “exactly”
Agreement communicated back to offeror

6. Who can accept an offer? Only the Offeree
The Offeree can be one person or a group
The Offeree is the “first” person to accept usually or the final person who the offeror agree to sell the product to
EXAMPLE: If I offer to sell my house for $225,000, I could get multiple offers to buy it for more or less than the amount I am asking. The offeree is the person I eventually agree to sell to.

7. Why must the acceptance match the offer ”Exactly”?
The “Offeror” has the power to decide all terms of a contract if they decide
Its their product or service, so they can do as they wish
The terms of acceptance must match the terms of the final offer “Exactly”, called the MIRROR IMAGE RULE
Any changes in the offer is called a counteroffer

8. How is the sale of goods different from other contracts?
Goods are sold by retailers or businesses
Retailers are overseen by “UCC” Law
Rules for acceptance of an offer differ slightly
Offers are set and agreed to based on ticket price
Changed terms are not called “Counteroffers” but rather are called proposals

9. Compare common law/ ucc law
Common Law agreements
Ucc law agreements
“Non” business related agreements
Counteroffers “Change” original offers
“Options” are used to keep offers open
“Business” based agreements
Proposals, rather than counteroffers are made to change agreements
“Firm Offers” are used to keep offers open

10. Why must the acceptance be communicated back to the offeror?
The acceptance of an offer can be made verbally, in writing or through , mail or other written forms
Some businesses require communication to take place by a certain date
Unless otherwise stated, acceptance of an offer takes place when “Sent” not received….. BUT, the offeror may require that acceptance of an offer ONLY take effect when its received by the business

11. Why do acceptances take effect when sent most times?
Date sent is more important than when received (Unless otherwise asked for by offeror)
Date sent is stamped on Mail, inside , fax or other electronic device, as proof when sent
Sometimes there is a delay when something is received (Ex: can be sent at 1pm, but not received until 5pm)
Law states date sent is valid unless otherwise stated

12. Can an offeree accept an offer through silence?
Yes, BUT only if the acceptance is based on some ongoing relationship (EX: Pepsi vendor…)
The offeror CANNOT word an offer in a way to “Trick” the offeree into accepting by saying nothing..
No person is ever under any obligation to respond to any offer being made to them

13. Why can’t silence be used as a trick?
Illegal
Can be hidden easily within details of the offer
Can add extra charges without knowledge of offeree
Offeree must be given the option of accepting the offer verbally, in writing or other
Offeree must accept some way, not forced into agreement (Genuine assent)

14. What is the difference? Unilateral acceptance Bilateral acceptance
Offeree accepts the offer being made by performing their obligations in some way.
Ex) If I hire a person to cut my grass every time it gets above 2 inches and agree to pay the person $30 each time they complete the task, its unilateral agreed to once the obligation (Cutting the grass) has been done..
Promise for a promise
“Most common” form of contract
Ex) Going to a store and buying something. The store gets your money, you get the goods. Also, ordering a pizza is bilateral. You get food, they get money.

15. Is this a unilateral contract or bilateral contract if you find the cat?

16. Ticket out the door quiz
Complete the practice quiz and turn in before end of class
Review and quiz within next 3 classes