2. Important Terms
Revocation – The right to withdraw an
offer before it is accepted
Counteroffer – A change the offeree
makes to the offeror’s terms
Option – A binding contract in which
the offeree gives the offeror something
of value in return for a promise to keep
the offer open
3. Important Terms
Option – is an offer to promise to keep an
offer open in return for something of value.
Example – You put something on layaway for
Christmas.
Terms are agreed to in advance
Firm Offer – Some firms have a policy in
writing for an offer to stay open for a
specified period of time.
4. Six ways an offer can be
ended
1. Revocation by the OFFEROR
Usually must be revoked before offeree
accepts.
This is true, EVEN IF OFFEROR PROMISED
THE OFFER WOULD REMAIN OPEN FOR A
PERIOD OF TIME.
Not effective until communicated to Offeree.
1. Time stated in the offer
5. Six ways to end an offer
2. Time Stated in the Offer
• Offeror can state HOW and WHEN the
offer must be accepted.
3. Reasonable Length of Time
• What is reasonable determined by
circumstances.
• Always a good idea to state how long an
offer is good for.
6. Six ways to end an offer
4. Rejection by OFFEREE
Once the Offeree rejects the offer, it’s over.
Time limit doesn’t matter if the offeree rejects.
Remember the marriage proposal. She said no,
so it was over.
5. Counteroffer
If the offeree changes the offeror’s terms in
important ways, it can make the offer void.
7. Six ways to end an offer
5. Counteroffer (continued)
A counteroffer is legally a refusal of the
first offer because a new offer is being
considered.
6. Death or Insanity of either party can
make the agreement of no effect.
8. Keeping an offer open
OPTIONS – The offeree gives the offeror
something of value to keep an option opent.
An Option is a BINDING CONTRACT. Options
may not be withdrawn. Can be sued for
damages.
Original payment is kept whether or not offeree
decides to buy. Original payment usually
becomes part of the purchase price.
9. Keeping an Offer Open
FIRM OFFERS – Certain merchants
state in SIGNED writing how long an
offer is good for.
No money is necessarily given to the
offeror in this instance.
Note: DEATH OR INSANITY DO NOT
TERMINATE AN OPTION NOR A FIRM
OFFER
10. Keeping an Offer Open
FIRM OFFERS – Certain merchants
state in SIGNED writing how long an
offer is good for.
No money is necessarily given to the
offeror in this instance.
Note: DEATH OR INSANITY DO NOT
TERMINATE AN OPTION NOR A FIRM
OFFER
