Business Contracts—When Do You Have Acceptance of an Offer?
When Is an Acceptance Really a Counteroffer? What Is the Mailbox Rule? Does It Still Apply?
The first requirement of a valid and enforceable contract is that there must be an agreement. To constitute an agreement, the exchange between the parties must include both an offer and an acceptance of that offer. What qualifies as acceptance? What happens when a party changes the terms, even slightly, when ostensibly accepting an offer? When does an acceptance go into effect?
What Qualifies as Acceptance of an Offer?
Acceptance of a contract refers to a party’s concurrence or compliance with the terms of a valid offer. An acceptance may be either express or implied—a party may accept the terms of an agreement by acting in accordance with those terms or may state, either orally or in writing, an intent to comply with the terms of the offer. As a general rule, an offer should be accepted in the manner stated therein, a manner specifically requested, or in a manner reasonably expected by the person making the offer. When there is some question about whether or not an offer was accepted, the court will look objectively at the parties’ conduct.
What If the Person to Whom the Offer is Made Changes the Terms of the Offer?
When the person to whom an offer is made suggests that he or she will accept the offer with some changes, that does not qualify as an acceptance. Instead, it’s a counteroffer that may now be accepted or rejected by the person who made the original offer.
When Is an Offer Accepted?
For an acceptance to have legal effect, it must be communicated to the person who made the offer. Until the offer is accepted, it may be revoked at any time. It’s important to understand, though, that the person to whom the acceptance is made need not receive it for the acceptance to be valid and create an enforceable contract. Under a legal principle known as the “mailbox” rule, an acceptance has legal force once it is deposited in the mailbox (or at the post office), not when the mail is received. As a general rule, instantaneous communications, such as faxes, do not fall under the mailbox rule. However, the law remains undecided as to whether the mailbox rule applies to e-mail.
Contact MCIS Law
At MCIS Law, PLLC, in Stafford, we provide comprehensive counsel to businesses in southeast Texas. For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We accept all major credit cards.
