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What is “acceptance” of an offer?
Acceptance of a contract is the assent of the offeree to the demands contained in the offeror’s offer. Acceptance of the contract varies depending upon whether the contract is unilateral or bilateral. An offeree accepts a bilateral contract by making the return promise demanded by the offeror. An offeree accepts a unilateral contact by undertaking the performance demanded by the offeror. The acceptance of an offer must meet a specific standard based upon the type of contract and the governing law. The standards that a specific type of contract must meet are as follows:
Rule for Sale of Goods (UCC) – The mirror-image rule does not apply to sales of goods under the UCC. The UCC recognizes that a contract is formed if the acceptance of the offer is unequivocal. That is, if it is obvious the parties agree on the primary or material terms of the agreement, an acceptance that changes or adds additional terms is a valid acceptance. The effect of different or additional terms depends on whether the parties are merchants. If either party is not a merchant, any additional or different terms are deemed suggestions for addition and do not become part of the contract. If both parties are merchants, the additional terms become a part of the contract, unless:
- they materially alter the contract,
- acceptance is conditioned on the specific terms of the offer, or
- the offeror specifically rejects the additional or different terms.
Example: I am a merchant and I offer to sell you goods. You respond that you are willing to purchase the goods, but I must provide you with a warranty. I send the goods and you accept them. If you are not a merchant, there is no warranty. That was simply a recommendation to be part of the contract. If you are a merchant, the warranty is a part of the contract.
- Note: In the above example, if we are both merchants, I could have excluded the warranty from the contract be expressly rejecting the warranty. If I sent the goods and you accepted them, you have agreed to the terms of my original offer.
Discussion: Why do you think the sale of goods employs a different rule than contracts to provide services? Can you think of any reasons for differentiating between the rules that apply to merchants of goods and non-merchants?
Practice Question: Darla is purchasing consumer goods from Isaac’s business. Darla sends in a purchase order and the payment for the goods. Isaac sends the goods and a receipt that includes a clause stating that any disputes about the goods must be submitted to arbitration. Darla is not happy with the quality of the goods and she asks Isaac to return her money. When Isaac refuses she seeks to sue Isaac. What is the result in this situation?
- The details of acceptance of the offer under a contract of sale of goods is a special one. When the contract for the sale of goods involves a non-merchant of the goods being sold, no additional terms may be added by the accepting party. Any terms added by the accepting party are recommendations for addition to the contract and must be expressly agreed upon. In this case, Darla is a non-consumer. The addition of the arbitration dispute is a fundamental change to the contract. It would not be included in the agreement. Darla is able to sue Isaac.