Text 3 How an Offer Is Ended

Once made, an offer does not last for ever. If it is not accepted, it ends without any contract arising:

1 at a prescribed time, if so stated in the offer

2 at the end of a reasonable length of time if the offer does not state how long it will remain open

3 by rejection of the offer by the offeree

4 if the offeree makes a counteroffer

5 if it is revoked (withdrawn) or modified by the offerer before the offeree accepts it

6 by the death or insanity of the offerer or offeree.

An Offer Ends at the Time Stated in the Offer

In making an offer, the offerer may state how and when the offer must be accepted.

If the Offer Does Not State How Long It Will Remain Open, It Terminates at the End of a Reasonable Length of Time

What is a reasonable length of time depends upon all the surrounding circumstances. If, for example, Mr. Farmen offers to sell a truckload of blueberries, and his offer has not been accepted within an hour or possibly within minutes, it probably would terminate automatically. That is because blueberries are perishable produce, which must be marketed quickly.

In contrast, the offer to sell a truck, expensive, durable equipment, would not terminate until a longer time had elapsed, at least several days. Purchase of a truck would involve a long-term investment of funds. There would be only a limited number of prospective buyers in the immediate local market.

An Offer Ends If the Offeree Rejects It

If the offeree clearly rejects the offer, the offer is terminated. This occurs even if a time limit set by the offerer has not expired.

An Offer Ends If the Offeree Makes a Counteroffer

Generally an offeree who accepts an offer must accept it exactly as made. If the offeree changes the offer’s terms in any important way, the result is a counteroffer. In making a counteroffer, the offeree says in legal effect, “I refuse your offer; here is my counteroffer.” The original offer cannot be accepted by the offeree after a counteroffer has been made unless the original offer is renewed by the offerer. Thus, a counteroffer not only terminates the original offer, but also immediately becomes a new offer.