Easy Route to Unenforceable Offers

The topic of offer has many nuances. That means that the better you understand how offer works the more points you’ll earn on exam day. Here’s a simple way to understand offer.

Big Picture

Offer and acceptance together are like an energized battery because an offer creates the power of acceptance. In order to have a valid contract one of the parties must make an enforceable offer that the other can accept. Once an enforceable offer is made then the other party has the power to accept or reject that offer.

Unenforceable Offers

But, not too fast. On most exams and even in most cases, before an enforceable offer is made there is usually one or more unenforceable offers to analyze. Since there are two types of offers, both enforceable and unenforceable, you should analyze the unenforceable offers first.

Things like preliminary negotiations, auctions and advertisements are all unenforceable offers. These offers are unenforceable because they are too weak or speculative to give the other party enough power to accept the offer.

Statement of Future Intent

For instance, let’s say someone sent you a text that they were thinking about selling their bike or were interested in selling their car. Statements like these are not strong enough to give an offeree the power to accept the offer. In law school these sort empty promises are called statements of future intent.

Preliminary Negotiations

Another type of unenforceable offers are preliminary negotiations. Often, before terms of a contract are agreed upon parties go back and forth on the terms or details of a deal. Negotiations aren’t enough to create the power for another party to accept because too many of the details are still up in the air. The terms will have to become more clear before an offer or promise is specific enough to create the power of acceptance.

Auction

Then there are auctions. An auctioneer may put an expensive piece of art up for auction. Although the auctioneer intends on selling the art, under contract law the auctioneer is not making an enforceable offer. How could he? There are usually a lot of people at an auction. It wouldn’t make sense that one person could make an offer of the same item to many people. In the case of auctions, it’s actually the audience placing bids that are making enforceable offers to the auctioneer. The auctioneer is soliciting their offers and has the power to accept or reject the offers made for the art. Usually the offer for the biggest dollar amount is accepted.

Advertisement

Finally, there is the advertisement. In a lot of cases advertisements are unenforceable offers. Since most ads are broad and neither target a specific person nor give more than general details, if every person who saw or received an ad had the power to accept it the outcome would be chaotic. For this reason advertisements are considered solicitations for offers and not offers themselves. The idea is that when someone sees an ad it’s not that they can accept it as an offer but it is that they can make an offer to the advertiser based on the terms of the ad. The advertiser can then accept the customers offer to buy.

There are cases however, where an advertisement is so specific in its details that courts will treat the advertisement it self as an enforceable offer that gives a customer the power to accept the ads offer.

Now that you’ve got the big picture, read your cases, listen in lecture and get practice analyzing offer with practice problems.