Skip to Content

Insights & News

The Offer-Acceptance Paradigm in Contract Formation

Business and Commercial Disputes By Harvey Binnall PLLC - 2018/12/28 at 12:38pm

If you’re engaged in a breach of contract dispute, then there may be a question of validity and enforceability with regard to the underlying contract — you may want to argue that the contract is actually invalid/unenforceable, or that the contract is valid/enforceable.

For example, if you are suing a defendant for breaching contract, then the defendant may attempt to argue that they are not liable for breach as the underlying contract was never validly formed.

The formation of a valid contract is ultimately dependent on the offer-acceptance paradigm, which is a series of back-and-forth manifestations of intent (relating to the formation of a contractual agreement).  Let’s explore some of the basics as to how the offer-acceptance paradigm works.

How Offer-Acceptance Works

In addition to consideration (i.e., the bargained-for benefit between the contracting parties), all valid contracts must involve an offer and an acceptance of that offer — simply put, there must be an objective physical, verbal, or written manifestation of assent to be bound to the terms of the underlying contract.

An offer is essentially the manifestation of the party’s willingness to enter into a contractual bargain.  The caveat is that the offer must carry with it the implication that the other party’s acceptance will “complete” the negotiation and create a valid contract.  Importantly, contract law imposes certain limitations on offers — not all offers will create a valid contract.  The offer must be sufficiently definite or must call for the creation of definite terms in the acceptance.

The actions of the other contracting parties will only be deemed an “acceptance” of the original offer if they manifest a willingness to be held exactly and unequivocally to the terms of the proposed offer.  If there is any legitimate attempt to negotiate alternative terms before agreeing to the contract, then it will not constitute acceptance.  Mere “grumbling” is not enough to destroy acceptance, however.

For example, suppose that two parties are negotiating a contract.  Party A will be delivering restaurant supplies to Party B, the restaurant.  Party A offers the service at a given price, which Party B feels is too expensive.  Party B says they’d love to do business, but only if the price were dropped 10 percent.  The statement of Party B could not qualify as an “acceptance” as there was a rejection of the terms (and a further negotiation).

Contact an Experienced Alexandria Business Dispute Lawyer for Legal Assistance

Harvey & Binnall, PLLC is a boutique commercial litigation firm whose attorneys have decades of experience representing plaintiffs and defendants in a variety of business disputes, including those that arise out of a breach of contract.

We have an eye for creative pre-litigation solutions but are willing and able to take a case to trial if necessary — our reputation as relentless litigators ensures that we have substantial leverage during early negotiations (to secure a favorable result).

If you’re interested in learning more about your breach of contract claim, or if you’re ready to move forward with litigation, we encourage you to call 703-888-1943 or send us a message online to request a consultation with an experienced Alexandria business dispute lawyer at Harvey & Binnall, PLLC.