ELEMENTS OF COMMON LAW CONTRACT FORMATION
CONTRACT ELEMENT
OFFER
ACCEPTANCE
REVOCATION
Section 36
Restatement
REJECTION
Section 38
Restatement
DEFINITION
LEGAL EFFECT
Manifestation of willingness to
enter into a bargain, so made as
to justify another person in
understanding that his assent to
that bargin is invited and will
conclude it
Acceptance of an offer is a
manifestation of assent to the
terms thereof made by the
offeree in a manner invited or
required by the offer.
Annulment or cancellation
of a statement,
document, or offer not
yet accepted, or
cancellation of a contract
by the parties to it. For
example, a person can
revoke a will or revoke an
offer to enter into a
contract, and a
government agency can
revoke a license.
If offer made, then it just takes an
acceptance to have a K. Transfers
liability.
Effective
upon
receipt
Terms of offer are accepted, and
acceptor assumes liability
Effective
upon sent
(mailing)
a : a refusal to accept an
offer
b : a refusal to accept
nonconforming goods as
performance of a contract
(1) An offeree’s power of
acceptance may be
terminated by
 Rejection or
counteroffer by
the offeree, or
 Lapse of time or,
 Revocation by the
offeror, or
 Death or
incapacity of the
offeror or offeree
(1) An offeree’s power of
acceptance is terminated
by his rejection of the
offer, unless the offeror
has manifested a contrary
intention.
TIME WHEN
EFFECTIVE
NOTES
ELEMENTS OF COMMON LAW CONTRACT FORMATION
COUNTER-OFFER
Section 39
restatement
A counteroffer functions
as both a rejection of
an offer to enter into
a contract, as well as a
new offer that
materially changes the
terms of the original
offer. Because a
counteroffer serves as
a rejection, it
completely voids the
original offer. This
means that the original
offer can longer
be accepted.
However, added
modifications do not
necessarily mean that a
party made a
counteroffer. Instead,
these added
modifications may
create a conditional
acceptance, depending
on the changed terms
(2) A manifestation of
intention not to accept an
offer is a rejection unless
the offeree manifests an
intention to take it under
further advisement
(1) A counter offer is an offer
made by an offeree to his
offeror relating to the
same matter as the
original offer and
proposing a substituted
bargain differing form
that proposed by the
original offer.
(2) An offeree’s power of
acceptance is terminated
by his making of a
counteroffer unless the
offeror has manifested a
contrary intention or
unless the counter offer
manifests a contrary
intention of the offeree
ELEMENTS OF COMMON LAW CONTRACT FORMATION
and the applicable law.
Alternatively, requests
for modifications may
not constitute a new
offer at all, but may
instead be mere
negotiation.