Termination of Power of Acceptance

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Termination of Power of Acceptance by Mind Map: Termination of Power of Acceptance

1. Revocable any time before acceptance, except when it is a Firm Merchant Offer under the UCC Section 2-205, an option contract or when there is partial performance on a unilateral offer.

1.1. By the offeror

1.1.1. Revocation Can only be performed BEFORE THE ACCEPTANCE OF THE OFFER Effective once received by Offeree Can be direct, to the person in which the offer was addressed Can be left in the possession of an individual authorized to accept the revocation (assistant, spouse etc.) Can be deposited into an authorized location (office mailbox etc.) Can be accomplished by conduct. If the offeror sells to another, conduct demonstrates offer is no longer open Effective upon Receipt. (Doesn't have to be read)

1.1.2. Unilateral Contract Only revocable before performance begins. Preparation by the offeree is not enough to constitute performance. By begining performance, the offeree must be given reasonable time to perform

1.2. By Offeree

1.2.1. Rejection Express rejection of the offer. Causes termination effective upon receipt

1.2.2. Counter-Offer An offer made by the offeree to the offeror that contains the same subject matter of the offer, but differs in its terms. Serves as a rejection and formation of a new offer Effective upon receipt Revival, If an offer is first rejected, and the original offeror restates the same offer, a new power of acceptance is created. Questions are NOT counter offers, negotiations are allowed!

1.3. By Law

1.3.1. Death of one or more parties If either party dies the offer is terminated. It is not necessary to communicate to the offeree Does not apply to option contracts, firm offers, or partial performance

1.3.2. Insanity of the party adjudication of insanity is causes death of the offer. It is not necessary to communicate to the offeree. Does not apply to option contracts, firm offers, or partial performance

1.3.3. Destruction of the subject matter Terminate's power of acceptance

1.3.4. Supervening law makes the contract Illegal If subject matter is illegal or becomes illegal, offer dies.

1.4. Lapse of time

1.4.1. If stated in offer, than for that time.

1.4.2. If not stated, then after a reasonable amount of time has passed.

2. Irrevocable Offers

2.1. Firm Merchant Offer

2.1.1. A firm Merchant offer is defined by the UCC 2-205

2.1.2. It is 1. an offer to buy/sell goods Offers to buy goods for current or prompt shipment 2. By a merchant Defined as a person who deals in goods of the kind, or other wise by his occupation, holds himself as holding the knowledge or skills to the goods in the transaction 3. in a signed writing Signed: any symbol with present intent to authenticate a writing, not necessarily a signature 1-201 subsection 37 Writing: Includes printing, typewriting or any other intentional reduction to tangible form UCC Section 1-201 Subsection 43 4. Give assurances of (will remain open for so many days) 5. Irrevocable for time state i the offer. If not stated, a reasonable time that is not beyond 3 months. In the event that time exceeds 3 months, then there must be an exchange of something of value to continue to hold open, otherwise, it's revocable at any time.

2.2. Option Contracts

2.2.1. Created when an offeree gives something of value to keep an offer open. This binds the time for the offeree to complete the offer, and forces offeror to keep open. Once something of value is exchanged, the contract becomes irrevocable. If rejected, then the offeror relies on rejection, they are not held accountable for turning around and selling the item.

2.3. Partial Performance of Unilateral Contract

2.3.1. Once the offeree begins performance on the offer, an implied promise is made, rendering the deal irrevocable by the offeror Preparation for the task is not starting unless the items used to prepare are required to complete the task. Restatements 45