Termination of the Offer

Termination of the Offer

An offer may be terminated prior to acceptance by either:

Ø  Action of the Parties;  or by

Ø  Operation of Law.

Termination by Action of the Parties

Revocation of the offer by the Offeror:

Ø  Offer can be withdrawn anytime before Offeree accepts the offer.

Ø  Effective when the Offeree or Offeree’s agent receive it.

Exceptions:

Irrevocable Offers.

Option Contract: Promise to hold an offer open for a specified period of time in return of consideration.

Termination by Action of the Parties

Exceptions (Cont’d):

Ø Detrimental Reliance or Promissory Estoppel where Offeree relies on offer to his or her detriment, thus Offeror is barred from revoking the offer.

Rejection of the offer by the Offeree:

Ø Rejection by the Offeree (expressed or implied) terminates the offer.

Ø Effective only when it is received by the Offeror or Offeror’s agent.

Rejection by Offeree (Cont’d).

Ø A counteroffer by the Offeree is a rejection of the original offer and making of a new offer.

Mirror Image Rule.

Ø  Offeree’s acceptance to match the the Offeror’s offer exactly.

Termination by Operation of Law

Lapse of Time.

Ø Offer terminates by law when the period of time specified in the offer has passed.

Ø If no time period for acceptance is specified, the offer terminates at the end of a reasonable period of time.

Destruction of the Subject Matter.

Death or Incompetence of the Offeror or Offeree.

Supervening Illegality of the Proposed Contract.