Offer and acceptance

Offer and acceptance is a process of contract formation in which one party proposes definite terms and another assents to them. The parties’ objective agreement can create a binding contract when other legal requirements are met.

Offer: A proposal to enter a contract on sufficiently definite terms, made so that acceptance can conclude the agreement. The offer sets the terms to which acceptance must respond.
Objective theory of contract: A rule interpreting contractual intent from a reasonable person’s view of words and conduct in context. Courts ordinarily assess apparent assent rather than undisclosed intentions.
Unilateral contract: A contract formed when an offer invites acceptance through completing a specified act rather than promising performance. Performance itself can supply acceptance when an offer invites an act.
Promissory estoppel: A doctrine that can enforce a promise causing reasonable, detrimental reliance, even without a conventional contract. It may provide relief when reliance exists but offer and acceptance do not establish a contract.
Acceptance: An unequivocal assent to an offer, communicated in a manner permitted by its terms or applicable law. Acceptance completes agreement when it matches the offer and becomes effective.
Consideration: A bargained-for exchange of a legal benefit or detriment that supports a promise in common-law contract law. Agreement alone may not make a promise enforceable without consideration.
Bilateral contract: A contract formed by an exchange of promises, with each promise serving as consideration for the other. A promise in response to an offer commonly completes this form of agreement.
Unjust enrichment: A restitutionary principle requiring a person to repay a benefit retained unjustly at another’s expense. It can address benefits conferred when no enforceable agreement was formed.
Counteroffer: A response that rejects an offer while proposing different terms as a new offer. Changing proposed terms usually prevents the response from accepting the original offer.
Certainty in contract law: The requirement that contractual terms be sufficiently definite for a court to identify and enforce the parties’ obligations. An unclear proposal may fail to constitute an offer capable of acceptance.

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