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Contract Elements: Offer and Acceptance


An offer and acceptance are a part of the requisites for legal contract formation. Denotatively, a bid is a promise, the actual terms, forbearance, conditional upon an act, or the return promise that a party makes in exchange for a performance (Smits 7). Offer is a willingness demonstration to enter a bargain so that the other person or party is justified in comprehending that their consent to the deal is invited, hence deciding to act accordingly by concluding it. Smits adds that an offer consists of a present intent statement to enter into a contract (8). Arguably, a current content statement is a specific proposal in its actual terms, acting as a form of communication to the offeree who is a perspective at this point. Thus, if any of these elements are missing, there is no legal offer to form the contract.

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Additionally, there are unique conditions under which a party can terminate an offer. Smits alludes that a bid is open until the expiration period (8). In cases that there is no time limit for the expiration, a reasonable time has to elapse for the offer to close. For instance, the death of either party can lead to offer termination. Connectedly, parties can terminate a request when the other party succumbs or under insanity conditions.

Besides, there are irrevocable offers, whereby a party purchases an option that makes an offer remain open under the agreed terms. As Klee mentions, mostly, it is the offeree that buys an option (25). In this way, the offeror cannot withdraw an offer because the offeree’s considerations bound the party. Courts throughout the U.S. outline an offer is irrevocable as soon as the offeree commences to engage in the requested act.

Moreover, an offer faces rejection when the offeror is individual through the offeree’s conduct or words; they do not intend to accept the offer. Smits reiterates that when an offer is rejected, the individual that made the original offer ceases to have any liability on the proposal (9). However, the specific request can continue provided that the offeree depicts that the counteroffer shall not constitute the offer rejection.


Notably, offer acceptance is the assent expression to the stipulated terms. According to Smits, offer acceptance is made by the offeree in a manner authorized or requested by the offeror (10). An acceptance is valid when the offeree knows everything in the offer in detail. Arguably, by the offeree accepting the offer, they manifest an intention to take, and the acceptance is unconditional and unequivocal according to the terms and conditions of the request.

Significantly, a valid acceptance determination is governed by the condition whether an act or a promise by the offeree was the bargained-for the response. Smits states that a unilateral contract acceptance requires action as opposed to a promise (10). Here, it is unprecedented to furnish the intended performance notice unless the offeror requests for it. In cases that the offeree has concrete reasons to trust that the offeror will not learn of the acceptance with the required promptness, the duty of the offeror becomes automatically discharged. However, the offeree can give substantive notice to make the offeror learn of the performance, or the offer designates that there is no need for alarm.

Distinctively, the offer is compelling when the offeree receives it in bilateral contracts. Smits mentions that an offeree has space to accept an offer until receiving a revocation notice from the offeror (11). Under the “mailbox rule,” an acceptance is operative upon dispatch provided that the offeror authorizes a specific acceptance method to be employed by the offeree, regardless of the acceptance being destroyed or lost in transit. Hitherto, the mailbox rule is ineffective unless the approval is addressed appropriately and postage prepaid. Finally, conditional acceptance revocation is effective upon receipt. A defective or late acceptance is considered a counteroffer, which cannot result in a contract but through the offeror acceptance.

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Works Cited

Klee, Lukas. International Construction Contract Law. Wiley-Blackwell, 2015.

Smits, Jan M. Contract Law: A Comparative Introduction. Edward Elgar Publishing, 2017.

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