Acceptance and irrevocable offers

The Acceptance Signal: Matching Terms and Following the Offeror’s Route

Acceptance is a manifestation of assent that must satisfy the governing contract law and follow any acceptance method the offeror made mandatory.

For a common-law contract, apply the mirror image rule:

1. The response must be an unequivocal assent to the offer’s terms.
2. It must not add, remove, or change a term in a way that makes assent conditional.
3. It must use the manner of acceptance the offer requires, or a reasonable manner if the offer does not make a method exclusive.

A response such as “I accept, but I would prefer delivery in June” is ordinarily an acceptance plus a request. The request does not condition assent. By contrast, “I accept only if you deliver in June” is not an acceptance; it is a counteroffer because the speaker has made assent conditional. The difference is the condition, not merely the presence of extra words.

The offeror controls the route of acceptance. If the offer says, “You must accept by signed letter received by Friday,” an email does not satisfy that requirement even if it clearly communicates assent. If the offer merely says, “Please respond by email,” the wording may be advisory rather than exclusive; ask whether the offer unambiguously limited the method. If no exclusive method is specified, a reasonable method ordinarily suffices. An offer that invites either a promise or performance permits the offeree to use an invited alternative, but the offeree cannot substitute a different mode that the offer excludes.

For a sale of goods, the UCC rejects strict mirror-image treatment in important respects. UCC § 2-206 generally permits acceptance in any reasonable manner or medium unless otherwise unambiguously indicated by the offer’s language or the circumstances. An order for prompt shipment ordinarily invites either a prompt promise to ship or prompt shipment of conforming goods. Shipment of nonconforming goods ordinarily operates as both acceptance and breach, unless the seller seasonably notifies the buyer that the shipment is offered only as an accommodation.

UCC § 2-207 further provides that a definite and seasonable expression of acceptance operates as an acceptance even though it contains additional or different terms, unless the response is expressly conditional on the offeror’s assent to those terms. Thus, “I accept, subject to your agreeing to my warranty term” is expressly conditional and does not accept the offer. “I accept; my form also includes a warranty term” is not expressly conditional, so the response can accept even though the added term requires separate UCC analysis. Do not apply the common-law mirror image rule to convert every added term in a goods transaction into a counteroffer.

The analysis should proceed in this order:

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Once a response qualifies as an acceptance, apply the ordinary timing rules already covered in the topic lesson. The important exception for this chapter is an acceptance of an option contract: under Restatement (Second) of Contracts § 63(b), it is operative only when received by the offeror. This material is closed-book-you must be able to reproduce the mirror-image, method-control, § 2-206, and § 2-207 rules without a supplied source.

The Revocation Shield: Options, Firm Offers, and Reliance

An irrevocable offer is not simply an offer containing the words “I will keep this open.” Identify the source of irrevocability and then ask how long, and to what extent, the protection lasts.

A common-law option contract is created when the offeror’s promise to keep the offer open is supported by consideration, separate from the exchange contemplated by the underlying contract. The consideration lesson supplies the bargain requirement; here, the consequence is that the offeror cannot revoke during the option period. A writing signed by the offeror that recites purported consideration for making the offer and proposes a fair exchange within a reasonable time may qualify as an option contract under Restatement (Second) of Contracts § 87(1).

An option does not itself create the underlying contract. The offeree still must accept the offer. But the option changes the effect of attempted revocation: revocation is ineffective during the protected period. It also changes acceptance timing. Under § 63(b), mailing acceptance during the option period is insufficient if receipt occurs after the option expires.

A further near-miss is the effect of rejection or a counteroffer. Under Restatement § 37, the ordinary rules under which rejection or counteroffer terminates the power of acceptance generally do not apply to an option contract unless the offer or option agreement provides otherwise. Therefore, an option holder who says “I will not accept those terms; would you consider a lower price?” may still accept the original offer during the option period.

A UCC firm offer is a different protection. Under UCC § 2-205, an offer to buy or sell goods is irrevocable without consideration when:

1. The offeror is a merchant.
2. The offer is in a signed writing.
3. The writing gives assurance that the offer will be held open.

The offer is irrevocable for the stated period, or for a reasonable period if no period is stated, but never longer than three months. If the stated period exceeds three months, the firm-offer protection lasts only three months. If the assurance appears on a form supplied by the offeree, the assurance term must be separately signed by the offeror.

Reliance can also restrict revocation. Under Restatement § 87(2), an offer becomes binding as an option to the extent necessary to avoid injustice when:

1. The offeror should reasonably expect the offer to induce action or forbearance of a substantial character before acceptance; and
2. The offer does induce that action or forbearance.

This protection is narrower and more flexible than a fixed option period. The court protects the offeree only to the extent necessary to prevent injustice. Reliance does not automatically create the underlying contract; acceptance is still required unless another enforcement doctrine applies. The promissory-estoppel chapter addresses broader enforcement questions; this rule matters here because it can make revocation ineffective.

Keep these distinctions separate. A common-law promise to hold an offer open without consideration is ordinarily revocable, unless a statutory or reliance-based rule applies. A merchant’s signed goods offer may be irrevocable without consideration, but only for the three-month statutory maximum. Reliance is not the same as payment for an option: the former depends on foreseeable substantial action and injustice, while the latter creates a bargained-for option with its agreed period.

The Decisive Fork: When the Method and the Protection Meet

When a fact pattern combines irrevocability and acceptance method, analyze them independently. First identify whether the offer is protected from revocation. Then determine whether the response complied with the required method. An irrevocable offer does not excuse a defective acceptance, and a defective method does not necessarily destroy the offer if the offeree later uses the required method before expiration.

A common example is a merchant’s signed writing offering goods and stating, “This offer will remain open until May 1.” Under § 2-205, no consideration is needed, but the offer is protected only if the writing gives assurance that it will be held open. If the same writing says, “Your acceptance must be a signed letter received by May 1,” § 2-206’s reasonable-method default yields to the offeror’s unambiguous instruction.

Recurring errors:

• Treating every added phrase as a counteroffer, even when the fact says, “I accept, but please consider a June delivery.”
• Applying the mailbox rule to an option when the acceptance is mailed before expiration but received afterward.
• Assuming a merchant’s firm offer lasts for a stated four-month period when § 2-205 caps irrevocability at three months.
• Treating “I will keep this open” as a common-law option when the facts give no consideration, qualifying writing, or reliance.
• Treating substantial reliance as an already formed contract when the offeree has not yet accepted.

On April 1, Meridian, a merchant that regularly sells office equipment, sent Northstar a signed writing:

“I offer to sell you 100 printers at $200 each. I will hold this offer open until May 1. Your acceptance must be a signed letter received by me by May 1.”

Northstar gave no consideration for the promise to hold open. On April 20, Northstar emailed, “I accept.” Meridian immediately replied that email was not an acceptance. Northstar then mailed a signed acceptance, which Meridian received on April 24, and Meridian had not revoked.

Three Final Drills: Separate the Acceptance and Irrevocability Rules

High-Yield Points - ⚡ Biggest Takeaways

A conditional acceptance is a counteroffer under common law; a mere request is not. An offeror may make a method exclusive, defeating an otherwise reasonable alternative. An option acceptance is effective on receipt, while reliance protects only as far as injustice requires.