Communication of acceptance, in contract law, is one of the two main details of a binding agreement, an offer and an acceptance of the offer. To simplify the definition of a contract, it can be called an agreement that legally binds two or more parties. A contract can be verbal or written and is enforceable under the law. Contracts are a key part of the business world, and to be honored in the business community, it's important to make sure contracts are well-written and specific in terms. Many contracts are enacted each day in either written or verbal form.

Examples of Oral Contracts and Written Contracts

Some examples of oral, or verbal, contracts are placing an order for a cup of coffee at a restaurant and buying extra minutes for a prepaid mobile phone. Examples of written contracts include buying a new house and filling out the paperwork to buy a car. A contract becomes binding, or enforceable, as soon as an offer has been accepted by the person it's addressed to by the offeror.

A contract begins with an offer. The person making an offer is referred to as the offeror, while the person receiving the offer is the offeree. The offer itself is a proposal from the offeror to the offeree. The offer is then translated into an agreement or enforceable contract when it is accepted. The offer can take several forms:

  • A letter
  • A newspaper ad
  • A fax
  • An email message

The key point is that an offer must express the thing the person making the offer is prepared to commit to when making the deals.

Problems with Contracts

When it falls to the court to make a decision on a problematic contract, the court may consider how a reasonable person would see the situation rather than the intent of the involved parties. Common sense is the basis for this because it's expected that neither party would want to be held liable for damages by breaching his or her side of the agreement. A contract comes into existence, then, when an offer has been made and the second party has accepted it by either express or implied consent.

Verbal Acceptance of Contracts

Written offers don't have to be accepted in writing. Written offers can also be accepted verbally in most cases. The only time a verbal acceptance is not acceptable is when there are circumstances in play that let both parties to the deal know that the contract is expected to be accepted in writing.

Difference Between an Offer and an Invitation to Treat

An invitation to treat is different from an offer because it only shows a person's potential willingness to negotiate a contract. A property owner indicating the willingness to sell at a specific price is considered an example of an invitation to treat. Public auctions and items displayed on store shelves are also considered invitations to treat rather than offers.

Revoking an Offer

An offer can be revoked by the offeror until the moment it has been accepted by the offeree. To be officially revoked, the revocation of the offer has to be expressed to the offeree, but it can be expressed by someone other than the offeror. If the offer was for a sale item, after the offeree has been informed the item was sold to someone else, that is an implied communication that the offer has been revoked and it is now too late to accept it.

The Mirror Image Rule

Under the mirror image rule, no changes are permitted. If you accept an offer, you have to accept it exactly as it was presented to you. You can't make any changes, because any modifications to the original offer make it a counter offer. A counter offer makes the original offer null. Note, however, that simply requesting more information isn't considered a counter offer. If an acceptance period was specified in the offer, it can't be accepted once the period has ended. Also, if the offer is rejected, it is considered killed and the offeree doesn't have the option to come back and accept it later.

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