he main requirements for a valid contract are:

Offer $$ made by the offeror

Acceptance $$ made by the offeree

Consideration $$ what each party gives up under the contract

An offer is a statement or act by the offeror to the offeree promising to perform or refrain from performing some act.

The three required elements for a valid offer include:

Intention $$ The offeror must have a serious intention to enter into the agreement. If Lorenzo says, $$I am thinking about selling my car for $$10,000,$ he is not displaying sufficient intent to make an offer.

Definiteness $$ The terms of the offer must be sufficiently definite so the parties and a court could understand the terms. This includes who the parties are, the subject matter of the contract, and, if applicable, quantity, time of payment, and delivery, as well as terms regarding performance. If Lorenzo says he will sell his car for $$10,000,$ Lindsay cannot interrupt Lorenzo and say, $$I accept your offer to sell your car for $$10,000.$ Now give me the keys to your Maserati!$$ Lorenzo has ten cars and he actually planned to sell his old Ford Escort, not his Maserati. Thus, a very important piece of information was missing when Lindsay interrupted Lorenzo.

Communication $$ The offeror must communicate the terms of the offer to the offeree.

Some types of acts or statements are usually not offers:

An Invitation to Bargain or Negotiate

Price Quotes

Letter of Intent $$ This letter states what the parties are considering, and does not create a legal obligation.

Advertisements $$ Ads are generally not offers, but instead are requests for someone to make an offer. A very detailed advertisement is an exception, and could be considered an offer.

Auctions $$ Auctions are considered requests for offers. In some auctions, the bidding must meet or exceed a certain bid price to complete the sale.

Termination of an Offer:

By Action of the Parties:

Revocation $$ The offeror can revoke the offer before the offeree accepts.

Rejection $$ The offer is terminated when the offeree rejects the offer. This includes counteroffers. Suppose Lindsay states she will buy Lorenzo$$s Maserati for $$10,000,$ and Lorenzo responds by saying, $$No$,$ you can buy my Maserati for $$95,000.$ Lorenzo has rejected Lindsay$$s offer, and he has made a new offer to Lindsay.

Termination by Law $$ An offer is terminated by law due to lapse of time, destruction of the subject matter of the contract, death or incompetence of the parties, and illegality of the contract $($i$.$e$.,$ if the basis of the contract has become illegal$).$ If Lorenzo offers to sell his Maserati for $$95,000$ to Lindsay, she cannot return to Lorenzo five years later and try to force Lorenzo to sell his Maserati five years later. It has been too long for that offer to be enforceable. Also, if the car is destroyed in a wreck, the law terminates that offer. Finally, if instead of a car the item for sale is an animal and the law changes to protect that animal from private ownership, the offer is terminated by law.

Question at position $1$

$1$

$2$ points

Question at position $1$

Which of the following is a valid offer?

Which of the following is a valid offer?

Eric offers to buy Arun$$s house for $$775,000$ with no contingencies because Eric$$s lease ends in two months. Arun wants to think about it and six days later has not yet responded.

Arun distributes flyers at work stating he wants to sell his house, listing the address and the asking price.

Eric offers to buy Arun$$s house for $$290,000.$ Arun says, $$No$,$ but I will sell it to you for $$300,000.$ Eric seems to be upset, so Arun says he will sell it for $$290,000.$

Arun tells Eric he will sell one of his houses for $$250,000$ by the end of the summer.

Question at position $2$

$2$

$2$ points

Question at position $2$

Which act or statement is a valid offer?

Which act or statement is a valid offer?

A price quote

A detailed advertisement

A completed auction with a reserve

A typical advertisement