How to Determine if a Letter Contains a Legally Binding Offer

Is Adel's letter considered as an offer?

a. Adel's letter is not an offer unless Abdullah thought Adel intended to make an offer.

b. Adel's letter is an offer if a reasonable person with full knowledge of the circumstances would be justified in thinking it was intended as an offer.

c. Adel's letter is not an offer unless both Adel and Abdullah considered it as an offer.

d. Adel's letter is not an offer unless Adel intended it to be an offer.

Correct Answer:

b. Adel's letter is an offer if a reasonable person with full knowledge of the circumstances would be justified in thinking it was intended as an offer.

In the context given above, Adel's letter can be considered as an offer if a reasonable person, aware of the circumstances, would interpret it as such. The terms mentioned in the letter, including the price, payment method, and the completion timeline, provide sufficient clarity and specificity for it to be legally binding.

Adel's intention to sell his house at a specific price and under specific conditions to Abdullah indicates a clear offer. The key factor in determining whether a communication constitutes an offer is whether it manifests an intent to enter into a legally binding agreement, which Adel's letter does.

Therefore, it is essential to analyze the content of the letter and how it would be perceived by a reasonable person familiar with the context to determine if it qualifies as an offer.

← Managing currency risk call options vs futures contracts Optimizing oil production finding the right market price →