Some Things to Keep in Mind with Offers
As we discussed, there must be an offer and acceptance for a contract to be valid. One thing to keep in mind is that acceptance isn’t always given right after the offer. So unless it’s a written contract that both parties have signed, then the question of acceptance may not be so cut and dry. For a contract to be considered valid, it must be clear it was accepted.
Another thing to consider is how long an offer is actually on the table once it has been made. The offeror is not obligated to extend the same offer forever. Typically, it’s a good idea to include an expiration date on an offer, but if none is included, a reasonable amount of time is typically how long an offer is open. This may be 30-90 days depending on the industry. Remember, this is open to a court’s interpretation if there is a dispute, so it’s best to stipulate how long the offer is good for to ensure you don’t have any problems. What’s more, you are free to revoke an offer if an offeree hasn’t responded and you wish to move on. However, if they accept it before you revoke your offer, you are legally bound to the original terms. Additionally, once you’ve agreed to allow an offer to remain open for a specified period of time, you cannot revoke it until that period has passed.
Acceptance, Counteroffers and Rejections
While a rejection is pretty straight forward, counteroffers are actually a special kind of rejection. Now, the offeror has to consider and either accept or reject the counteroffer.
On the other hand, if the offeree accepts the offer, things are much more straightforward. However, depending on the type of contract, accepting an offer looks a little different. For example, a contract for a sale of goods requires acceptance of all terms. This is known as the “mirror image rule.” On the other hand, contracts for services, minor differences between the parties’ beliefs about the terms may be deemed reasonable in a court of law.
In general, the offeree can accept an offer in any of the following ways:
1. Fully performing actions or services based on the terms expressed in the contract
2. Writing or stating their acceptance.
3. Making a promise to perform the services in the terms of the contract
4. Performing improperly in accordance with the offer (say you delivered the wrong product, even
though it’s not the product in the contract, the fact you delivered denotes acceptance)
As you may have already realized, it’s a good idea to specify the terms of acceptance within the contract to ensure that there is no ambiguity around this.
An Exchange of Value
The last part required for an enforceable contract is the exchange of something of value. Basically, one party agrees to do something and the other agrees to do something in return of equal value. This could be the sale of goods, or the rendering of services, leasing of property or equipment, etc.
No, this exchange does not have to include money. Often contracts are put together where one party agrees to do something for the other party in exchange for free products (i.e. an endorsement deal).
Still, have questions?
As you can see, the basic elements are at once both basic and complex. Plus, they are slightly different depending on the type of business contract you are working with. Do you have questions?
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