What's a Contract: Acceptance
A person can accept an offer by either words or conduct. Signing a contract is simply a form of conduct that can accept an offer. There are three categories of acceptance (i) Express, (ii) Implied, and (iii) Conditional.
Express acceptance is the easiest. It’s the equivalent of someone saying “I accept” or signing their name to a contract.
Implied acceptance is when a person’s actions make it more likely than not that they have accepted the offer.
Conditional acceptance is not a real acceptance. Rather, it is a counteroffer that needs to be accepted by the other side
Examples
Express—Someone offers you a beer for $5. You say “I accept!” Alternatively, you sign the contracts at Joe’s AutoMall and drive off in a new sedan for no money down.
Implied—This happens all the time in stores and online. When you see an item in the store or on your favorite website and want to buy it, no one makes you sign a contract or say “I accept!” Rather, you just pay for the goods or services, that payment is an implied acceptance.
Conditional—Someone offers you their software service saying that payment is due in advance of each month. You say “I’ll accept if I pay you in arrears each month.” This is a conditional acceptance and is actually just a new offer. This because all the terms are the same except the payment term. However, because the other side never offered or accepted that payment term, the deal is delayed until they accept it.
Client Note
Most often implied acceptance is the tricky thing for clients. What will happen is that two sides exchange emails and maybe even a draft contract that defines the terms of the deal they are looking to do. However, for one reason or another no contract is ever sign nor is there even an email summarizing the deal, but both parties start performing. That is, one party might start sending the other money, and the other side might start providing services.
What happens in the event of a dispute months later?
Well, the lawyers would look at the correspondences that lead up to the exchange of performance and try to determine which terms were mutually agreed on and which weren’t. From that, the law would cobble together what the terms of the deal were.
TAKEAWAY
This is one of the many reasons it’s important to have legal services upfront. It might take your lawyer 2 to 3 hours to draw up a solid contract for your deal and maybe another hour to bring it to the finish line.
However, it will take tens of hours to cobble together the would-be contract. Further, the other side might hire their own attorney, and then the attorneys need to resolve their competing interpretations.
So, not only do you not have a clear contract to rely on in the event of a dispute, but you are now paying tens of thousands of dollars on legal to help you resolve the dispute, and this is before litigation even occurs. Whereas, you might have only paid legal $1,200 to draw up the contract.