L4M3 practice question 21 of 25

Under general legal principles of contract formation, which of the following will always automatically result in the termination of an offer? 1. Negotiation 2. Rejection 3. Failure conditionality 4. Non-disclosure

Full set: 258 questions
Answer options
A: 3 and 4 only
B: 1 and 4 only
C: 1 and 2 only
D: 2 and 3 only Correct answer
Correct Answer:
D. 2 and 3 only
Explanation

Under established principles of contract law, an offer can be terminated in several ways. Rejection by the offeree is an explicit termination; once an offer is rejected, it cannot be subsequently accepted. Similarly, if an offer is made subject to a specific condition (failure conditionality), and that condition is not met, the offer automatically lapses. For example, an offer to purchase goods 'subject to a satisfactory quality inspection' is terminated if the inspection fails. Both rejection and failure of a condition are definitive events that automatically bring the offer to an end, removing the offeree's power of acceptance.

Why Incorrect

1. Negotiation: Negotiation is a process of discussion and does not automatically terminate an offer. A counter-offer made during negotiation terminates the original offer, but a mere request for information does not.
4. Non-disclosure: Non-disclosure of a material fact may lead to a contract being voidable for misrepresentation after it has been formed, but it does not automatically terminate the initial offer itself.

References

McKendrick

E. (2020). Contract Law: Text

Cases

and Materials (9th ed.). Oxford University Press. In Chapter 3

'Offer and Acceptance

' the principles of termination of an offer are detailed

specifically identifying rejection and failure of a condition as clear methods of termination (pp. 78-82).

Poole

J. (2021). Textbook on Contract Law (15th ed.). Oxford University Press. Chapter 2

Section 2.8

'Termination of the offer

' explicitly outlines that an offer is terminated upon rejection by the offeree or by the non-fulfilment of a condition precedent (pp. 65-69).

The University of London. (2022). Contract Law Study Guide (LA1040). Chapter 3: 'Offer and acceptance

' Section 3.5 'Termination of an offer

' confirms that an offer may be terminated by rejection or the failure of a condition. It distinguishes negotiation

noting that only a counter-offer

not a request for information

constitutes a rejection.

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