Business Law: Offer Termination

The video tutorial covers various ways an offer can be terminated, including expiration, intervening illegality, destruction of subject matter, and the death or insanity of parties. It introduces the objective theory of contracts, which focuses on what a reasonable person would think in similar circumstances. The concept of consideration is also discussed, emphasizing that a contract requires something of legal value to be exchanged between parties.

What happens to an offer if it is not accepted by the specified expiration date?

• It is terminated.

• It becomes a binding contract.

• It is automatically renewed.

• It remains valid indefinitely.

Which of the following can terminate an offer due to intervening illegality?

• The offeror becomes unavailable.

• The offeror changes their mind.

• The subject of the offer becomes illegal.

• The offeree takes too long to respond.

What effect does the destruction of the subject matter have on an offer?

• The offer is modified.

• The offer is terminated.

• The offer is accepted automatically.

• The offer is postponed.

How does the objective theory of contracts assess the validity of a contract?

• By considering the actual thoughts of the parties involved.

• By evaluating the intentions of the offeror only.

• By considering what a reasonable person would think.

• By analyzing the financial status of the parties.

What is required for a contract to be enforceable under the concept of consideration?

• Each party must give up something of value.

• A witness to the agreement.

• A verbal promise.

• A written agreement.

What does the legal detriment in consideration imply?

• Both parties must suffer a loss.

• One party must give up a right or accept a new duty.

• The contract must be signed in front of a lawyer.

• One party benefits without any cost.

Which theory suggests that even a small item can be considered valid consideration?

• The theory of reasonable time.

• The peppercorn theory of consideration.

• The objective theory of contracts.

• The theory of intervening illegality.