§ 2.6.1 Termination of the Offer by Death or Insanity
Death or insanity of the offeror terminates the oferee's power of acceptance, and despite the objective theory of contracts, notice to the offeree of these events is not necessary. The termination is premised upon the assumption that there cannot be a contract without two parties in existence and the lack of the physical existence or mental capacity of the offeror precludes the mutual assent required for formation. This rule is inconsistent with modern notions regarding objective intent to be bound and is apparently a left-over rule from the early 19th century notions that subjective intent was controlling. Like the phrase "meeting of the minds" which the law actually required in former centuries, the notion that you "cannot make a contract with a dead man" has endured beyond its time.
Death or insanity of the oferee also ends the prospect of forming a contract, not because the offer is terminated but because only the intended offeree has the power of acceptance and when the offeree dies or becomes incapacitated acceptance of the offer becomes impossible.
Death or insanity of the offeror or offeree may not terminate the offer if the offer is irrevocable as part of an option contract. (§ 2.7.1)
