Offer and Acceptance

Offer and Acceptance§

Definition§

Offer and Acceptance is a fundamental mechanism in contract law under which a legally binding agreement is formed. This process involves one party making an offer and the other party accepting it. This concept sets the stage for the creation, modification, and enforcement of most agreements and contracts.

An offer is a clear proposal made by one party (offeror) to another party (offeree), ready to be bound via the offer’s terms if accepted. An acceptance is the unambiguous consent by the offeree to the offer’s terms, which then forms a binding contract.

Examples§

1. Retail Purchases: A customer offers to buy a product by bringing it to the cashier, and the store accepts the offer by taking the payment.
2. Employment Contracts: An employer offers a job position to a candidate, and the candidate accepts the offer, thus forming an employment contract.
3. Real Estate Transactions: A buyer offers to purchase a house from a seller, and the seller accepts the offer, forming a binding real estate agreement.

Frequently Asked Questions§

1. What happens if the acceptance includes new terms?

   • If an acceptance includes new terms, it is considered a counter-offer, not an acceptance.

2. Can an offer be revoked?

   • Yes, an offer can generally be revoked any time before it is accepted, unless it is irrevocable by law or agreement.

3. Is a verbal acceptance valid?

   • Verbal acceptance can be valid, but written acceptance is preferred as it provides documentation.

4. What if the offer is not accepted in the specified time frame?

   • If the offer is not accepted within the specified time frame, it expires and can no longer be accepted.

5. Does silence constitute acceptance?

   • Silence generally does not constitute acceptance unless the parties have a pre-existing understanding where silence implies consent.

Related Terms§

• Agreement of Sale: A documented agreement where a seller agrees to sell and a buyer agrees to buy, reflecting clear terms of the transaction.
• Contract: A legally binding agreement resulting from offer and acceptance, enforced by law.

Online Resources§

• Investopedia - Offer and Acceptance
• Wikipedia - Offer and Acceptance
• Contract Law Basics - Legal Information Institute (LII)

Suggested Books for Further Studies§

• “Contract Law: Text, Cases, and Materials” by Ewan McKendrick
• “Principles of Contract Law” by Robert Hillman
• “Understanding Contract Law” by Jeffrey T. Ferriell

Fundamentals of Offer and Acceptance: Contract Law Basics Quiz§