May I Offer You a Platypus? (Contracts, Part 2)

As we discussed yesterday, a valid contract has certain characteristics, including a valid offer, acceptance and consideration. Today we’ll look at the offer.

The person who makes an offer is called the “Offeror,” and the person to whom an offer is made is called a Mark an “Offeree.” The Offeree can be a single person (the usual case with a publishing contract) or a class of people (for example, if I post a reward sign offering $150 for the return of my missing platypus, Penny).

A valid offer has three components: the intent to make a valid offer, certain or definite terms, and communication of the offer to the Offeree (or at least one member of the class, if the offeree is a group). Evaluation of all three components depends on the facts and circumstances of the offer at issue.

Before we proceed, you should know that (a) I do not own a platypus, (b) I have no intention of owning a platypus any time soon, and (c) if I did own a platypus, I would not give it to you.  These facts may become material as you read on.

The test for intent to make a valid offer is “whether the offeror’s actions would make a reasonable person believe that the offeror intended to make an offer.”

If I offered to give my platypus to the first person to comment on this post, would that constitute a valid offer? Well, since you know I don’t own a platypus, and in the real world people seldom give away pets at the drop of a blog comment, it would be unreasonable to think that offer was serious. (Also, this is an educational post about contract offers – not the place you’d expect a valid offer to hide. We won’t even start on whether a lawyer can be trusted.)

Some “offers” are actually just invitations to bargain. Offers phrased as questions often fall in this category. For example: “Would you give me $1 million for this talking platypus?” I might ultimately take it, but the nature of the question doesn’t suggest I intend to be bound if you say yes.

Certain and definite terms means that the offer must adequately identify the terms of the offer with sufficient detail for the offeree to make an informed acceptance. (Yeah, that sounded like legalese to me too.) The necessary terms vary depending on the contract and the relevant governing law, but as a general rule an offer must identify (a) the intended offeree, (b) the platypus subject matter of the contract, (c) the price and any relevant quantities. ($1 million for one platypus is expensive. $1 million for 55 platypuses is a bargain!) Courts sometimes supply missing terms when necessary, but as a rule it’s important to ensure that an offer contains all the material terms.

Warning: If you are an offeree considering acceptance of an offer, be very careful not to sign anything that is missing terms or conditions of the deal. Even if the other party promises to “include them later” or “replace this with another contract later on” the law will often uphold the original contract, and you may not even be allowed to explain about the other party’s unwritten promises.

TL;DR: Do not sign if there are missing terms.

The last major element of an offer is communication to the intended offeree. Only the intended offeree (or someone in the intended group or class) can accept an offer. It is invalid for anyone else. If a publisher offers me a contract to publish my magnum opus, A Day in the Life of a Platypus, my friend cannot accept on her own behalf and substitute her own version of my masterwork (or another work with the same name). Even though today is her birthday. (Happy Birthday Mirami – you see what I did there?)

And now you know the three elements of an offer: intent to offer the platypus, sufficient terms so you know which platypus you’re accepting (and how many Oreos it costs), and communication of the offer to the proper offeree.

Because it takes a special person to accept a platypus.

* DISCLAIMER: I am a real lawyer but this blog, this entry and the content hereof are for educational and information purposes only. This is not intended as legal advice to any person or entity. The laws of your state, country, fiefdom or treehouse may vary. Legal situations are fact-specific and require individual analysis by a professional a monkey trainer an attorney. If you have a legal issue, you should hire an attorney to assist you. Otherwise, the other side will hire a big, scary lawyer with huge teeth and a giant stick, who will use you as his personal pinata until you agree to give him your lunch money, your first-born child and your rubber-band collection. And that’s just for starters. Do not try this at home.