Offer and Acceptance
The building blocks of agreement
An offer is a clear statement of terms on which the offeror is prepared to be bound, made with the intention that it becomes binding on acceptance. It must be distinguished from an invitation to treat (a mere willingness to negotiate). Displayed goods, advertisements (generally), auction calls, and invitations to tender are classic invitations to treat. Acceptance must be unqualified, matching the offer exactly (the mirror image rule), and must be communicated to the offeror.
Key doctrines to master
- Counter-offer vs request for information: a counter-offer destroys the original offer; a mere inquiry does not. This distinction decides many questions.
- Postal acceptance rule: acceptance by post is effective when posted, provided post was contemplated. Modern instantaneous methods (email, phone) generally take effect on receipt.
- Revocation: an offer can be withdrawn any time before acceptance, but revocation must reach the offeree. Revocation of a unilateral offer requires reasonable steps, often equivalent publicity.
- Lapse and rejection: offers lapse after a stated time, a reasonable time, or on death or rejection.
Traps to watch
Questions often plant a counter-offer disguised as an acceptance ("accepting your offer but at a lower price"). Another trap is the battle of forms, where each side's standard terms clash; the last-shot or first-shot analysis matters. Also check whether acceptance was by conduct rather than words, and whether silence was wrongly treated as acceptance (it generally is not).
Rule of thumb
Ask: did the offeree's response introduce new terms? If yes, it is a counter-offer, and the original offer is dead. Worked example: A offers to sell a car for £5,000; B replies "I'll pay £4,500." That is a counter-offer, killing A's £5,000 offer. If A then says "no", B cannot later accept the £5,000 offer.