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Contract Law And Contract Essay

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Contract Law A written offer, which remained open for five days, was provided to sell B. Greenacre for $1,000 by A. On the eve of expiry of the offer, B obtained a report from the county recorder of deeds that he (the recorder) had obtained a deed of Greenacre from A to C. executed on that day. Following assumptions that the recorder was probably wrong, B notified A of acceptance of the written offer on the fifth day. While the information provided by the recorder was found to be erroneous, A denied the existence of a contract between him and B. This scenario has generated several concerns on whether A was right, especially if the report was reliable. Additionally, there are questions on whether the report may have been reliable despite being erroneous.

The above scenario is an example of a contract law issue and specifically deals with the issue of the power of acceptance in a contract. Once a party has made an offer to another, he/she essentially confers the power of acceptance to the offeree. In this case, when A granted the offer to sell B. Greenacre, he/she essentially conferred to power of acceptance to B. for a period of five days. The power of acceptance in this scenario could only be terminated under various circumstances including lapse of the offer, revocation by A, B's death or incapacity, and B's rejection.

In relation to the lapse, the offer would lapse after the specified five day period in which the offer would remain open. Generally, an offer usually lapses after a specified period of time (which in this case is five days) or after a reasonable period of time (if no time period is specified). On this basis, B had the power of acceptance for the five day period after which his/her power of acceptance would be terminated (Eisenberg, 2004). Therefore, B was within his/her right to exercise...

B's power of acceptance would lapse on the sixth day, which implied that exercising this power before the sixth day was right.
Secondly, there was no revocation of the offer by the offeror (A) and offeree (B), which would essentially terminate the power of acceptance. Additionally, the offeree was still alive and had the capacity to make a reasonable decision or judgment regarding the offer. This implies that the other factors that could result in termination of the power of acceptance of the offeree (B) are not applicable in this case. Neither of the two parties revoked the offer and they both had the capacity to make decisions on the offer.

In light of these factors, there was a contractual obligation between A and B. regarding the sale of Greenacre for $1,000. This contractual obligation was created when the offer was made to B. and he/she was given five days to make a decision on whether to accept, bargain or reject the offer. The contractual obligation between these two parties existed for the five day period after which it would lapse. The existence of this contractual obligation between these two parties is evidenced in the power of acceptance conferred to B. for a period of five days from when the offer was made to B.

A is wrong to deny the existence of a contract between him/her and B. even if the report by the county recorder of deeds is reliable. Under contract law, an offeror cannot revoke the offer until the stipulated time or a reasonable time expires (Laurence, n.d.). The kind of contract in this scenario is an option contract, which occurs when an offeror provides an offer to the offeree and effectively limits his/her (offeror's) power to revoke the offer. In most cases, an option contract directly or indirectly provides a stipulated time period during which the offer stays open. This time period confers the power of acceptance to the offeree during which he/she must exercise his/her accept or reject the option/offer.

According to Laurence (n.d.), option contracts sometimes require the offeree to…

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References

Eisenberg, M.A. (2004, January 1). The Revocation of Offers. Wisconsin Law Review, 271-308. Retrieved from Berkeley Law Scholarship Repository website: http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1426&context=facpubs

Laurence, B. (n.d.). Contracts and Contract Law: Legal Contracts. Retrieved February 14, 2017, from http://www.nolo.com/legal-encyclopedia/contracts-101-make-legally-valid-30247-2.html
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