Section 1 Contracts
Section 2 Federal Securities Acts
Section 3 Secured Transactions
Section 4 Bankruptcy
Section 5 Debtor-Creditor Relationships
Section 6 Agency
Section 7 Regulation of Employment
Section 8 Business Structure
Section 9 Professional and Legal Responsibilities
Section 10 Individual taxation
Section 11 Corporate Taxation
Section 12 Partnership Taxation
Section 13 Transactions in Property
Section 14 Gift and Estate Tax, Trusts And Exempt Organizations, Other Taxation Topics

1.2.3 Offers

i) An offer may be written or oral.


ii) General advertisements, price lists and general inquiries are not offers.


iii) To be effective, an offer must be communicated by the offeror (person making the offer) to the offeree (recipient of the offer).


(You must keep these two terms clear at all times.  The questions may try to “trick” you by providing a potential answer that is false for one of the parties and true for the other.)


iv) An offer can be rejected by the offeree.  It can also be revoked by the offeror as long as it was not already accepted. Logically, the offeror must communicate a revocation to the offeree.

A potential problem arises if the offeror wishes to revoke and an offeree wishes to accept at (more or less) the same time. Common law provides that, if acceptance is made by the method specified in the offer, or by the same or faster method than that used by the offeror to communicate the offer in cases where no method is specified, acceptance is effective when sent.

Example:  Offeror mails a written offer without stating a required method of acceptance. Offeree uses the mail to send an acceptance.  The offeror then calls the offeree to revoke the offer before receiving the acceptance. A contract exists because acceptance was effective when mailed and revocation came too late.

v) An offer must generally contain certain essential terms:

a. The parties involved
b. Price
c. Time for performance
d. Subject matter (e.g. quantity and type)


 An option is a separate contract to keep an offer open.

Example:  I offer you $100 not to sell your car for 10 days so that I may think about buying it for an agreed-upon price of $5,000.  If you accept my offer of $100, you cannot sell your car to someone else during this time, even if they offer you more money.