Unit 3: Offer/Acceptance

Unit 3: Offer/Acceptance

“Promises Given for Something … Acceptance”
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Summaries

  • Unit 3: Offer/Acceptance > Promises Given for Something > Buying Something at a Store
  • Unit 3: Offer/Acceptance > Acceptance > Mirror Image Rule
  • Unit 3: Offer/Acceptance > Acceptance > Offeror is Master of the Bargain

Unit 3: Offer/Acceptance > Promises Given for Something > Buying Something at a Store

  • We’ve been talking about the move from promises, to bargains, to contracts.
  • Promises in which the person who makes the promise, what, in law, is called the promisor, doesn’t expect to find himself in court.
  • By and large, the class of promises, serious promises- if you like, let’s call them public promises, not private promises, or joke promises, or gift promises.
  • It’s best that the promise be part of a bargain.
  • Or I go into an antique shop and see an old desk I like.
  • The shop owner promises to deliver it to my house next week.
  • For there to be a bargain, there has to be something exchanged, something given on each side.
  • In that case, it’s a promise for a performance.
  • Promise to pay for the desk and the promise to deliver the desk.
  • The other side, who sometimes in law is called the offeree, he accepts.
  • He accepts either by accepting through making a promise of his own, or maybe by an actual performance.
  • Now, when he says a promise of his own, for him to say, ah, yes.
  • By the way, it could be a performance in return for a promise.
  • The contract is formed when the offer is accepted.
  • What happens if I offer to buy this desk, this beautiful old desk? And I say, I’ll buy this desk for $500. The antique dealer says, I’ll be glad to sell it to you for $750. Is that a bargain? Well, it obviously isn’t.
  • Imagine if the buyer was somehow compelled now to pay $750 and get the desk.
  • That illustrates that in order for the antique dealer to accept the promise, he’s got to accept the offer I made.
  • He can’t accept some other offer that he might wish I had made.
  • How could it be otherwise? How could it be otherwise then that the bargain is whatever the person who initiates it proposes and what the person to whom it is proposed accepts? If the person accepts something else, then obviously, there’s no bargain.

Unit 3: Offer/Acceptance > Acceptance > Mirror Image Rule

  • That’s the very simple idea that you can’t bind a person to his promise, his offer promise, by saying, well, I’ll give you something else than what you have promised.
  • So if I walk into the antique store, promise to give the shop owner $500 for that desk, and he says, good, I promise to deliver the umbrella stand over there for you, well, I’m certainly not bound to pay him $500 for the umbrella stand.
  • Suppose I walk into that antique store on January 2, and I have my eye on that desk.
  • I go to the antique dealer, and I say, I’ll offer you $500 for it.
  • I spend some time looking around at the rest of his stock, and I walk out.
  • On the other hand, if I walk out and come back after lunch, and the dealer says, yup, I’ll take the $500, I’ll deliver it to you the next day, that’s different, isn’t it? OK, how long is too long? Does it sort of depend? What if the antique dealer sees me getting a doughnut and a cup of coffee across the street? And he walks across the street 10 minutes later, taps me on the shoulder, and says, good, you’ve got a deal.
  • If I walk back into his store 10 minutes later, after my doughnut and coffee, and he says, I accept, it’s much more likely that’s going to make a deal and a completed contract.

Unit 3: Offer/Acceptance > Acceptance > Offeror is Master of the Bargain

  • You’ve seen these pictures of trading desks and big banks, or hedge funds or places like that.
  • What you have is traders sitting in front of multiple screens, following the markets in Tokyo, and London, and Hong Kong, for a particular commodity.
  • You want to buy a million euros for delivery the next day.
  • How many dollars is that going to cost you? Is that going to cost you $1.38 a euro, or $1.40 a euro, or $1.36 a euro? So what happens is you’re sitting in front of the screen, and the screen for a particular says “1 euro for $1.38.” You look at that for awhile, lets say 10 seconds, and you click “Accept.
  • Let’s say I’m a trader in some other commodity- scrap iron.
  • I have the computer screens, and I’ve got multiple telephones, and somebody calls me up and says, I’m selling 1,000 tons of scrap steel of type one, highest quality, at $390 a ton.
  • Are you interested in buying it? Yeah, I’d love to.

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