Next Article: UCC – Acceptance of an Offer to Contract
Back to: CONTRACT LAW
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:
Mirror-Image Rule (Restatement) – Contracts that are not primarily for the sale of goods may be governed by rules derived from the Restatement of Contracts. The Restatement proposes the “mirror-image rule” for acceptance of an offer. This rule states that the acceptance of an offer must be exactly as demanded by the offeror. That is, the acceptance must “mirror” the offer. If the offeree adds new terms to the acceptance, it is not really an acceptance. Acceptance with different or additional terms constitutes a counteroffer.
- Example: I offer to perform a service for you at a given fee. You reply that my prices are too high and that you want a 15% discount. You changed the terms of the consideration (the price), which is a material aspect of the offer. As such, you have effectively rejected my offer, as your attempted acceptance was not the mirror image of my offer.
- Discussion: Why do you think about the mirror-image rule? Does it concern you that a minor deviation in an acceptance can effectively reject a contract? Why or why not? What if this was not the intent of the parties at the time of entering into the agreement?
Practice Question: Kate offers to paint Roger’s house for $2,500. Roger attempts to accept the offer by saying, “Great. But, you have to paint the storage shed in the backyard as well.” Kate does not respond and decides to take a different painting job. Roger is angry, particularly when he learns that the next closest offer is twice as expensive. He wants to sue Kate for her failure to perform. What is the likely result?
- The mirror image principle stipulates that for any offer to be accepted, the party to whom the offer is made must accept the terms presented as they are. Once the offeree makes any suggestion to change the terms of the offer, the original offer ceases to exist. This means that the offeree rejected the original offer. Because Kate, the original offeror, decided not to accept the new terms presented by Roger, the offeree, then there is no acceptance and, thus, no legal binding agreement between the parties.