Legal Question in Business Law in California

Contractual technicalities

I recently issued an offer to buy business assets through a broker that was accepted however it was late. I didnt receive it until many hours past the expiration deadline, but on the same day (past business hours). Due to various circumstances i want to get out.

Question: Can i say the offer has expired and get out of it?Will it hold up in a california court of law?


Asked on 12/20/06, 4:12 am

2 Answers from Attorneys

Edward Hoffman Law Offices of Edward A. Hoffman

Re: Contractual technicalities

Offers cannot be accepted after they expire, but you have not provided enough facts to determine when the seller tried to accept. What form was the acceptance in (letter, email, voice message, etc.)? How did you receive it (by mail, fax, courier, etc.)? When was it executed? Why didn't you receive it sooner? Without these details there is no way to determine whether the seller accepted in time.

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Answered on 12/20/06, 4:32 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Contractual technicalities

If the offer was clear that it expired at the end of the business day, or at 5 p.m, then an attempted acceptance after that time is ineffective. If it merely said "November 30" without reference to a time of day, the expiration would be at midnight, not the end of the business day.

However, acceptances can be effective "when posted" rather than "when received." The most general rule on time and manner of acceptance of an offer is that the offer must (or may) be accepted in any way that is required (or invited) by the offer, either expressly, or if there are no express requirements for acceptance, then any way that a reasonable business person would assume for the circumstances.

A corollary to this is the "mail box rule" that if an offer is made by mail, it may be accepted by mail, and a mailed accptance is considered made at the moment of mailing. By extension, I suppose (but do not know) that an offer made by telephone may be accepted by leaving a phone message on the offeror's answering machine or voice mail service. Probably an offer sent by email can be accepted by return email, effective when sent, not when delivered.

The historical reasoning for the mail box rule was that by using the postal service to deliver the offer, the offeror made the postal service his agent for the receipt of acceptances.

I suspect that the reasoning behind keeping the rule in modern times and extending it to other modes of communication is partly to preserve the rule by analogy and partly to prevent offerors from hiding from attempted acceptances. Also, it is easier ti determine when an email was sent than when it was opened and read.

I don't know if any of this applies to your situation, but at least you can apply the principles to your facts.

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Answered on 12/20/06, 12:16 pm


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