Contract Law Quiz: Offers and Acceptance

In an auction, the auctioneer's call for bids is considered an offer, which is accepted by the highest bona fide bidder.

When an auction has a reserve price, the bidder makes the offer, and the auctioneer accepts it by actions like the fall of the hammer.

The sale is complete when the auctioneer signals it, usually by the fall of the hammer.

The offeror (the one making the offer) can withdraw the offer at any time before acceptance.

If the offeree rejects the offer, the offer is terminated.

A counter-offer is a new offer made in response to an original offer. It creates a new offer, essentially rejecting the original offer.

Death of either the offeror or the offeree terminates the offer.

Offers are automatically terminated by lapse of time, if no time is specified, a reasonable time applies.

The offeror can specify how an offer must be accepted. If they do, only that method will work. Think of it as setting ground rules for agreeing to a deal.

A person cannot accept an offer if they are unaware of its existence. It's like trying to agree to a deal you never heard about.

An offer made to the public can be accepted by anyone who meets the conditions of the offer. This applies to things like reward offers.

The offeror may grant the offeree the right to keep the offer open for a specific time. This is like a time-limited agreement to buy something.

When a person transfers their right to accept an offer to another person, the new person can then accept the offer. Think of it as passing on a buying opportunity.

The acceptance must be a conscious response to the offer. The offeree needs to know what they are agreeing to.

In order for a contract to exist, the minds of the offeror and offeree must meet. They must both understand the same thing and agree to the same terms.

Bird v Summerville established that an offer is only valid if it's intended for the person it is addressed to. Even if it wouldn't harm the offeror, it can't be accepted by someone it wasn't meant for.

An option renders the offer irrevocable, meaning the grantor cannot revoke it.

The holder of an option has the right to purchase the property at a predetermined price within a specified time.

The grantor of an option cannot retract the offer, and also cannot prevent the contract from being formed through acceptance.

An option lapses if it is not exercised within the time limit specified in the agreement.

The death of the grantee (option holder) terminates the option if the option is personal.

The general rule is that options, like other personal rights, can be transferred by cession unless otherwise specified in the agreement.

If an option agreement does not specify a time limit, the offer must be kept open for a reasonable period.

An option that fails to specify a time limit might conceivably be void for vagueness.

A type of contract that gives a person (the grantee) the right to buy a property if the seller (the grantor) decides to sell it, but without obligating the seller to sell.

A contract where one party (the grantor) promises to give another party (the grantee) the first chance to buy a property, if the grantor decides to sell it.

A special type of preference contract that gives the holder (the grantee) the right to make an offer if and when the seller (the grantor) decides to sell.

An agreement where the grantor (seller) makes a firm offer to sell, and the grantee (buyer) has the option to accept or reject it. Unlike pre-emption, the grantor is obligated to sell if the grantee accepts.

A grantor has a negative obligation when it comes to a pre-emption agreement. They may not sell to someone else without first giving the holder of the preference contract the opportunity to buy or make an offer.

It's not entirely clear whether a grantor has a positive obligation to make an offer to the grantee once the trigger event occurs (usually the decision to sell).

A pre-emption agreement acts as a restraint on alienation. It prevents the grantor from selling to third parties while the right of pre-emption is still in place.

In the absence of clear terms in the agreement, common law rules apply to pre-emption agreements. However, these rules are not well established.

The point in time an agreement where a grantor must make an offer to the grantee. It's like a trigger that activates the obligation to sell.

A pre-emption agreement specifies terms on what constitutes a valid trigger event, often based on the grantor's decision to sell. If unspecified, the courts will need to interpret based on industry norms.

The right to make an offer to purchase an asset before anyone else. It's like a first-in-line privilege for a sale.

The ability to force someone to sell an asset to you at a predetermined price. It's like a contract that guarantees you get the property if you want it.

The seller must make a genuine offer to the holder of the pre-emption right, rather than trying to avoid selling by offering a non-serious offer.

The pre-emption agreement can specify how the price and terms are determined for the future sale. The seller's offer must follow these terms.

The pre-emption agreement can also provide that the grantee must make an offer to buy. This means you can't just rely on the grantor's offer.

A legal principle where judges rely on previous court decisions (precedents) to decide similar cases, even if the specific wording of the contract or facts are different.

A legal concept where a court interprets the law by looking at previous decisions (precedents) and historical sources.

A situation where courts rely on incorrect or outdated interpretations of previous cases, leading to conflicting decisions about preference contracts.

A legal system where the court applies the law based on established principles and precedents.

A legal right that allows a person to withdraw from a contract if someone else tries to buy the property.

A type of contract that allows the holder of a preference right to buy a property at the same price offered to another person.