What constitutes acceptance of a contract offer?

In an earlier post we covered the topic of what makes for a valid offer of contract, which is one of the three necessary elements to create an enforceable agreement. In this post we will take a look at the second of these three elements: acceptance of the offer.

The basics of offer acceptance are that to accept the offer you must engage in some type of affirmative action. This action will depend in part on the nature of the contract offer: a "unilateral" contract offer invites acceptance by performance (for example, you offer a sum of money for someone to paint your house, and that person accepts by painting your house), or a "bilateral" offer invites acceptance by a promise to perform (both parties agree in advance of actual performance).

Under common law, offer and acceptance are subject to what is known as the "mirror image rule": this means that the acceptance must exactly match the terms and conditions of the offer, otherwise the acceptance is treated as a rejection of the offer and a counter-offer. Under the Uniform Commercial Code, on which Illinois law governing contracts for the sale and purchase of goods is based, acceptance is valid as long as it is given "in any manner and by any medium reasonable in the circumstances." This allows for more flexibility than the mirror image rule.

Although acceptance usually requires an affirmative act, in some cases silence can still constitute acceptance. A classic example of this is a contract that automatically renews upon expiration of its initial term unless either party expressly states its intention not to renew; the failure to cancel the contract before the deadline constitutes acceptance of a renewal term.

If you are thinking about entering into a business contract, consulting with a commercial and business law firm can be helpful in determining how to establish a valid offer, or to properly accept an offer, or to make a counter-offer in such a way that the risk of having the contract fail through a misunderstanding is minimized.

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