Answer to Question #294403 in Management for Jack

Question

identify and explain 3 ways an offer can be terminated

Answer 1

An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his/her assent to that bargain is invited and will conclude it. The offer must be communicated, and it must be definite. Offer and acceptance may seem to be straightforward concepts, as they are when two people meet face-to-face. But in a commercial society, the ways of making offers and accepting them are nearly infinite. For example, a wholesale store advertises its merchandise in the newspaper. A company makes their offer by mail or over the Internet etc. An offeror gives the offeree a choice. These situations can raise tricky questions, as they are corresponding situations involving acceptances. An offer can be terminated in several ways, some as discussed below;

Expiration or lapse of the offer- The most common manner in which the power of acceptance can be terminated is through expiration or lapse of the offer. When and how an offer expires is partly determined by whether a time period is fixed to the offer itself. If the offer states that it will be held open for a certain period of time, the offeree’s power of acceptance automatically expires at the end of that period. 

Rejection by the offeree- The right of acceptance can also be terminated by the offeree’s rejection of the offer. If the offeree rejects the offer, his/her power of acceptance is terminated even if the power of acceptance would not have otherwise lapsed. For example: On January 1st, John offers to sell a car to Mary. John tells Mary that she has until January 10th to accept the offer. Mary rejects John’s offer on January 5th. Mary’s power to accept the offer is now terminated, even though she would have had five more days to accept the offer had she not rejected it on January 5th. 

By operation of law-  An offeree’s power of acceptance may also be terminated by operation of law through either the death or incapacity of the offeror or as the result of a changed circumstance. An offeree’s power of acceptance is terminated by the offeror’s death or incapacity whether or not the offeree knows of the death or incapacity.