LES 306 Business Law – Formation of Contracts: Offer and Acceptance

Offer and Acceptance*Constructive Termination of an Offer

This Friday is the third Friday in June. On the third Friday of every month in the stock and bond markets, option contracts expire. On the third Friday of every quarter, quarterly contracts and options expire. These are options on futures, stock options, single stock futures, it’s called a triple or quadruple witching hour. This is a normal course of events which happens forever. This week something this week something very very devious is going to happen. It will begin happening tomorrow at ten o’clock Greenwich Mean Time the World Health Organisation is expected to declare a level 6 flu pandemic. When they declare a level 6 pandemic that will mean that the Flu is out of control worldwide and drastic measures are to be taken. A level 6 pandemic is apart of financial and other business contracts! It is under the Force Majeure clause of contracts. A Force Majeure is like an act of War, Earthquake, landslide. A Force Majeure means a force greater than anybody can control. The reason they put Force Majeure clauses in contracts is to allow one or both parties to a contract to stop meeting their obligations under that contract because a situation has taken place which is out of control. Well a level 6 pandemic is a Force Majeure, this is incorporated into commercial business contracts. They actually mention in the Force Majeure section, ‘disease pandemics.’ Friday is the Quadruple Witching Hour for the expiration of financial and stock option contracts. Over the past couple of …