The law can be very complicated and at the top of that list, just behind property law (obviously!), is contracts law. For me, contracts was my favorite course in law school. Contracts is also the one class I went into thinking, I probably already know some of this information. Sometimes having an air of confidence can lead to bad endings, but not in the case of contracts law. My contracts course in law school also ended in the same sort of way, I felt I already knew most of it, but it’s the details that can trip people up on those torture devises created by law school professors. (Not to pick on professors because after law school, now, I do see the fun in it for professors.)

Contracts is a topic for most people that has a sense of familiarity from experiences of the world. The lexicon of contracts is also familiar. That is good news for non-lawyers because that means that most of what you need to know about contracts, you already know.

Contracts law begins with three things: offer, acceptance, and consideration. (see earlier post on consideration.) Of the three, consideration is by far the most complex, and the hardest to grasp. Offer and acceptance on the other hand are pretty straightforward. Although it can get very confusing and clouded, but in the overwhelming instances, offer and acceptance are simple enough to understand.

An offer is making a communication to another person that if the person the communication is transmitted accepts the terms of the communication, then the person who makes the offer will fulfill the terms of the communication presented. Confused? Ok, let’s simplify. Essentially an offer can mean that you say to someone else, “hey, take out this bag of garbage to the dumpster outside, and I’ll give you a soda.” There you have an offer. You made a communication that was transmitted by saying something to someone else. The terms are understandable, “do this” and there is the part that you will do if they take out the trash - give them a soda.

Is an offer required to be written? Generally, the answer will be no, but there are exceptions and the exceptions are hard rules to the point that if there is no writing, then there is no contract. A writing is required, generally, to selling real estate, promising something in exchange for marrying someone, transaction of goods over $500 and a few more. Even if a writing is not required by a law, it is still a good idea to put the terms of the agreement into writing with signatures and dates.

Acceptance is also familiar to most of us. Just like the offer, an acceptance is generally not at issue. The terms of the acceptance may be at issue, but whether or not there was an actual acceptance is not generally disputed. Acceptance can take many forms. It can be as simple as a head shake yes, to a written acceptance, to implied from conduct. Some forms of acceptance are required to be in writing. In addition to the writing requirements listed for an offer, if the offer explicitly says that acceptance can only be made by a writing, then that will generally be honored (unless there is conduct otherwise).

An acceptance is the agreement or actions that show agreement to be bound by an offer. So in the previous example, if you shake your head yes in agreement or pickup the bag of garbage without saying or shaking your head, and take the bag to the dumpster outside, then you have accepted the offer. Congratulations, you get a soda for your efforts.

Of course there are hang-ups and hiccups to both offer and acceptance. Those are important, but if you are trying to understand some basics, then these are the general rules. Not every situation falls into these broad generalizations, but they may help you figure out what is going on with your transaction.



This blog entry was written by Sanket Mistry.

Sanket Mistry, J.D., M.I.A.      Sanket Mistry is the founder and CEO of Peerless Legal and blogs regularly. He has written numerous books including, "25 Estate Planning Forms," "8 Living Trust Forms," "Simple Will Creator," "Give Through a Will & Living Trust," and "Guidance On Creating Your Own Will & Power of Attorney," and the bestselling books in the Legal Self-Help Guide series, "Will, Trust, & Power of Attorney Creator and Estate Records Organizer" and "Estate Planning in Plain-English." He earned his JD from the Walter F. George School of Law at Mercer University and is a member of the New York State Bar. He has worked, and volunteered, at a number of nonprofits, government agencies, and for-profit corporations. He also holds a BA in philosophy from Emory University and a MIA from Columbia University. He is an avid traveler and tennis player.