When Is the Acceptance of an Offer to Enter into a Contract Valid?After an offer to enter into a contract has been made, the other party must accept the offer before a contract is formed. There are several rules regarding the acceptance of an offer to enter into a contract: - The acceptance must be communicated. Silence cannot usually be considered acceptance.
- The offer must be accepted without modifications, otherwise it is a counter-offer.
- Until an offer is accepted it may be revoked. The exception to this is an option contract.
- Only the person to whom the offer is made can accept.
- Acceptance will be judged by an objective standard. This means that if an average person making an offer would have thought the other person accepted, there is a contract, even if the person did not mean to accept.
At What Point Does the Contract Become Binding?The general rule is that a contract is formed once the acceptance is communicated. At that point, both parties are bound by the contract. The exception to this is known as the mailbox rule, which says that an acceptance sent by mail becomes effective when mailed, not when received. This rule applies to contract acceptance only. This means that once a letter of acceptance has been mailed, the offer cannot be revoked even if the offeror has not yet received the acceptance. Does E-Mail Fall Under the Mailbox Rule?The courts have not clearly decided whether an acceptance by e-mail becomes valid when sent or when received. Instantaneous forms of communication such as faxes and telex communications do not fall under the mailbox rule, so acceptance by these methods is only valid when received. Do I Need a Lawyer?The rules of contracts often vary from state to state. If you have questions about whether there has been a valid acceptance of an offer, an attorney familiar with contract law can help. |
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