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chapter 7 law part 2.docx

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Ryerson University
Law and Business
LAW 122
Jane Monro

Offer Invitation to treat  Invitation to treat: Is an indication of willingness to receive an offer.  IS NOT AN OFFER  Invitation for others to make offer Distinction between an offer and an invitation depends on the objective test.  How a reasonable person would interpret a particular statement  Would a reasonable person believe that the person making the statement was prepared to enter into a contact as soon as an acceptance was received?  Or would it be more reasonable to believe that the person making the statement was simply prepared to receive and consider offers Example: 1. if it said ad classified as invitation to treat each response would be an offer you could reject or accept. 2. If your ad is classified as an offer, you might be held liable to fulfill 10 contracts, even though you have only two cars to sell. EXPECTION TO THE RULE EXAMPLE 1. An advertisement me be considered an offer IF a reasonable peron would read it that way. If I say indicate that a limited number of items are avaible while supplies last. “ First come first serve” Communication of an offer Statement is not an offer unless it is communicated and received as an offer Example: 1. Written: if you buy a tv from a department store on credit, you will probably be asked to complete a lengthy application that contains countless terns and conditions. That is your offer to the store 2. Verbally: if you go to the restaurant and say : a cheeseburger and a milkshake please.: you are offering to enter into a contract for the purchase of the meal 3. Inferred conduct alone: If you go to a barber and you sit on the chair and get a trim without saying ANYTHING, you have offered and the barber has accepted a contract to cut your hair. The Life of an offer Offer doesn’t last for ever. If it is accepted it gives way to a contract, and if it is not accepted , it may cease to exist in these way:  Revocation  Lapse time  Death or insanity  Rejection  Counter offer Revocation Revocation: occurs if the offeror withdraws an offer.  Offeror is MASTER of the offer and can revoke at any time  You can only revoke only when reasonably communicated to the offeree, Firm Offers Firm offers: occurs when the offeror promises to hold an offer for acceptance for a certain period (not binding)  Offeror can revoke at any given tize  Firm offer is NOT contain in a contract and therefore not enforceable in law  Firm offer cannot be revoked if: the offers promise was placed under a seal or if the offeree paid for the right to accept within a certain period Example: 1. You may want buy a piece of land in the future BUT you are not prepared to commit yourself to the transaction just yet, you might try an OPTION from an owner Option: is a contract in which the offeror is paid in exchange for a binding promise to hold an offer open for acceptance for a specific period (binding) 1. It would allow you and the offeror at some point of time in the future to create a contract for the sale of land 2. It would immediately create an entirely separate contact requiring the offeror to wait while you decide whether to buy the land. Tenders Tender: is an offer to undertake a project on particular terms.  Invitation to treat and promises to award the project to the company that submits the best offer. Example: if the city wants to bulid a library it will call for tenders. Compaines would sumbit there best offers. If a company decides to withdraw its offer while the city is looking at the offers it cannot WHY 1. Bidding process immediately creates a special contract between the city and each company that submits an offer. Contract a: Contract to enter process Contract b: Contract to fulfil requirement if won Contract A: for invitation to treat  An offer to enter in a special contract. To hold a fair tendering process in exchange for the submission of an irrevocable bid. Contract B: For invitation to treat  To receive offers to enter into a contract for what ever they entered Contract A: For offeror  Acceptance to enter into a fair and irrevocable tendering process Contract B: For offeror  An offer to enter into a contract. Refer to concept summary on page pg 162 Lapse time  Offeror is enti
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