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Bl Lesson 7 2

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Business Law, Lesson 7-2

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Bl Lesson 7 2

  1. 1. Lesson 7-2 Termination of Offers
  2. 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. 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. 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. 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. 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. 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. 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 Options may not be withdrawn.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. 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. 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

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