As a civil litigation lawyer, I commonly come across situations in which the terms of a contract are in dispute.  Often, one side is trying to enforce a contractual term, and the other side responds by saying, “I didn’t agree to that.”

Is there a definite offer to be accepted?

“Generally, formation of a contract requires an offer, an acceptance, and consideration.” Cea v. Hoffman, 2012 UT App 101, ¶ 24 (Utah App. 2012).  Before you can have an acceptance, you must have an offer.  “An essential component of the formation of an agreement is a meeting of the minds regarding the integral terms.”  Tolbert v. Kelly, 2013 UT App 149, ¶3 (Utah App. 2013).   “For an offer to be one that would create a valid and binding contract, its terms must be definite and unambiguous.  DCM Inv. Corp. v. Pinecrest Inv. Co., 2001 UT 91, ¶12 (Utah 2001). “An agreement cannot be enforced if its terms are indefinite.”  Richard Barton Enters. v. Tsern, 928 P.2d 368, 373 (Utah 1996).  A valid offer must convey enough information for the parties to discern their obligations under the proposed contract.

How is an offer accepted?

“An acceptance is a manifestation of assent to an offer, such that an objective reasonable person is justified in understanding that a fully enforceable contract has been made.”  Cal Wadsworth Constr. Co. v. City of St. George, 898 P.2d 1372, 1376 (Utah 1995). “An acceptance must unconditionally assent to all material terms presented in the offer, including price and method of performance, or it is a rejection of the offer.” Id.  Additionally, “[a]n offeree’s proposal of different terms from those of the offer constitutes a counteroffer, and no contract arises unless the original offeror accepts it unconditionally.” Id. at 1377.

The most common way to accept an offer is to sign the bottom of a written agreement, but with limited exceptions, an offer can be accepted in other manners.  Oral contracts are often agreed to through verbal acknowledgments or a handshake.  Many contracts are created through electronic correspondence (i.e. text messages or emails).  In other situations, parties accept a contract by performance.  Sometimes, a contract will specify that manner in which it may be accepted.

Each term must be offered and accepted

One common mistake, particularly with oral contracts, is that a party will try to tack on terms after-the-fact.  For example, it is not uncommon in certain industries for unpaid parties to add interest and attorney’s fees provisions on their invoice.  If these terms are not in the original contract, then they cannot be unilaterally added without a new offer, acceptance, and consideration.

As always, if you have any questions about your situation, you are welcome to contact one of Whiting & Jardine’s breach of contract lawyers for legal advice.

For more specific information about this particular subject, please call my office at 801-691-7770 for a free consultation or see the following web pages:

  1. Whiting & Jardine, LLC Home Page: www.WhitingJardine.com
  2. Transactions: http://whitingjardine.com/services.php?part=transactions
  3. Breach of Contract Litigation: http://whitingjardine.com/practice_areas.php?part=breach
  4. Contract Negotiation & Drafting: http://whitingjardine.com/practice_areas.php?part=contract

Disclaimer: This blog is for general information and educational purposes only.  Nothing in this blog should be construed as legal advice for any particular situation.  The statements in this blog may be generalized, contain speculation, be based on opinion, or be made inaccurate by updates or clarifications to the law.  No attorney-client relationship is created by virtue of this blog.  To receive competent legal advice for your situation, you should seek competent, licensed legal counsel in the appropriate jurisdiction and practice area.

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