Offer and acceptance are the two halves of mutual assent — the moment a contract is born. An offer is a manifestation of willingness to enter a bargain, made so that the other party understands their assent will close the deal; acceptance is the offeree's manifestation of assent to the exact terms of that offer. Without a valid offer that is validly accepted, there is no agreement to enforce, no matter how much the parties talked.

This is the doctrine your Contracts professor will drill from day one, because everything downstream — consideration, defenses, remedies — presupposes that a contract actually formed. On the exam, formation is almost always the first fight. If you can't cleanly say whether there was an offer and whether it was accepted, you can't get to the good stuff. This page walks the elements, how courts apply each, the worked examples your professor loves, and the traps that sink students in December.

What is the rule for offer and acceptance?

Contract formation requires mutual assent — a 'meeting of the minds,' though modern law measures it objectively, not by secret intent. Mutual assent breaks into two components:

1. An offer — Under Restatement (Second) of Contracts §24, an offer is 'the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.' The key idea: an offer confers on the offeree the power of acceptance. Once you receive a valid offer, you hold the power to bind the offeror simply by saying yes.
2. An acceptance — Under Restatement §50, acceptance is 'a manifestation of assent to the terms [of the offer] made by the offeree in a manner invited or required by the offer.' At common law, the acceptance must mirror the offer exactly (the mirror image rule).

The whole doctrine sits on top of the objective theory of contract: courts ask what a reasonable person in the other party's position would have understood the words and conduct to mean, not what a party privately intended. This is why a joke, if it looks serious enough, can form a contract — the classic Lucy v. Zehmer problem, where a man who claimed he was only kidding when he signed a napkin selling his farm was held to the deal because he outwardly manifested assent.

What counts as a valid offer?

The recurring question is: offer, or mere preliminary negotiation? An offer must communicate present willingness to be bound, with enough definiteness in the essential terms (parties, subject matter, quantity, price, time) that a court could enforce it and identify a breach.

Watch these lines:

• Invitations to deal are not offers. 'I would consider selling for $X,' 'Are you interested in buying?,' or a request for offers ('bids invited') invites bargaining but does not itself confer a power of acceptance.
• Advertisements are usually not offers. They are treated as invitations to deal, because they lack definiteness and would otherwise expose sellers to unlimited acceptances. The famous exception is Lefkowitz v. Great Minneapolis Surplus Store: an ad that is 'clear, definite, and explicit, and leaves nothing open for negotiation' — 'first come, first served, $1' — can be an offer. Know this exception cold; professors love to test it.
• Price quotes are typically invitations, not offers — unless phrased with enough commitment and detail to signal willingness to be bound.

Once a valid offer exists, the offeror is the master of the offer. The offeror dictates who can accept, how (by promise or performance), through what medium, and by when. This principle explains half the acceptance disputes on your exam.

How is an offer terminated?

The power of acceptance is not permanent. An offer can die five ways, and the timing of death is heavily tested:

1. Rejection by the offeree — effective on receipt. It extinguishes the power of acceptance.
2. Counteroffer — a counteroffer both rejects the original offer and proposes a new one. At common law, any response that changes terms is a counteroffer, not an acceptance (the mirror image rule again).
3. Revocation by the offeror — offers are generally revocable any time before acceptance, even if the offeror promised to hold it open, unless the promise is supported by consideration (an option contract) or an exception applies. Revocation is effective on receipt.
4. Lapse of time — the offer expires at the stated deadline or, if none, after a reasonable time.
5. Death or incapacity of either party, or destruction of the subject matter / supervening illegality.

Two exceptions to free revocability you must have in your outline: (1) option contracts, where consideration keeps the offer open; and (2) under UCC §2-205, a firm offer — a merchant's signed written promise to hold an offer open — is irrevocable without consideration for the time stated, up to three months.

What makes an acceptance valid?

Acceptance requires: (1) that the offeree have the power of acceptance (the offer is still alive and directed to them), and (2) a manifestation of assent in the manner the offer invites. Break it down:

• Mirror image rule (common law): the acceptance must exactly match the offer's terms. Add or change a term and you've made a counteroffer, killing the original offer.
• Bilateral vs. unilateral contracts: an offer inviting acceptance by a return promise forms a bilateral contract. An offer inviting acceptance only by performance forms a unilateral contract — think 'I'll pay $100 if you climb the flagpole.' Under Restatement §45, once the offeree begins performance on a unilateral offer, the offeror's power to revoke is suspended; the offeree must be given a chance to finish.
• Acceptance by silence is generally not effective — silence is not assent — except in narrow cases (prior course of dealing, or where the offeree takes the benefit of offered services knowing they were offered with expectation of payment).
• Manner and medium: because the offeror is master of the offer, an acceptance by a manner the offer forbids may be ineffective; but if the offer is silent, any reasonable manner and medium works.

What is the mailbox rule?

The mailbox rule (Restatement §63) governs when acceptance becomes effective: an acceptance sent by a reasonable means is effective on dispatch — the moment it leaves the offeree's hands (dropped in the mailbox) — not on receipt. This matters enormously because a contract forms at that instant, so a revocation that arrives afterward is too late.

Contrast the timing rules and you have an exam-winning chart:

• Acceptance: effective on dispatch (mailbox rule).
• Revocation, rejection, and counteroffer: effective on receipt.

The nasty crossover problem: the offeree mails an acceptance, then sends a faster rejection that arrives first. Or mails a rejection, then a faster acceptance. The mailbox rule bends here — if the offeree sends a rejection first, the acceptance is generally treated as effective only if it arrives first, to protect an offeror who may have relied on the rejection. Know the wrinkle; it's a classic issue-spotter plant. The mailbox rule also does not apply to option contracts, where acceptance is effective on receipt.

How does the UCC change the rules for goods?

For contracts for the sale of goods, Article 2 of the UCC displaces the common law and deliberately loosens formation rules to reflect how merchants actually deal.

• UCC §2-206: an offer invites acceptance in any reasonable manner and medium unless it clearly says otherwise. Notably, an order to buy goods for prompt shipment can be accepted either by a promise to ship or by actually shipping.
• UCC §2-207 (the 'battle of the forms'): the crown jewel. A definite acceptance with additional or different terms still forms a contract — it is not automatically a counteroffer. This flatly rejects the mirror image rule. Between merchants, the additional terms become part of the contract unless (a) the offer expressly limits acceptance to its terms, (b) the new terms materially alter the deal, or (c) the offeror objects. This is one of the hardest and most-tested doctrines in Contracts — professors build entire exam questions on it.

The threshold move on every formation question: Is this goods or not? If goods, run UCC. If services, real estate, or intangibles, run common law. Get this classification wrong and every downstream rule you cite is the wrong rule.

Worked examples

Example 1 — Offer or ad? A store runs an ad: 'Saturday only — 3 fur coats, $1 each, first come first served.' Anne arrives first and demands one. This is Lefkowitz: the ad is clear, definite, and leaves nothing to negotiate, so it's an offer, and Anne's arrival is acceptance. Compare 'Coats on sale, come see us' — pure invitation, no offer.

Example 2 — Mirror image counteroffer. Ben offers to sell his car for $5,000. Carla replies, 'I'll take it for $4,500.' At common law, Carla has made a counteroffer, which rejects Ben's offer. Ben's original offer is dead; Carla cannot later 'accept' the $5,000 unless Ben renews it.

Example 3 — Mailbox rule timing. Dana offers by letter to sell land, offer open one week. On day 3, Dana mails a revocation. On day 4 — before the revocation arrives — Ed mails his acceptance. Because acceptance is effective on dispatch and revocation only on receipt, a contract formed on day 4 the moment Ed mailed. Dana's revocation arrives too late. (Note: land, so common law, not UCC.)

The exam trap

The single biggest formation trap is treating a counteroffer as an acceptance — students see the parties 'agreeing' and skip the fact that the response changed a term. At common law that's a counteroffer that kills the original offer, and if the original offeror then walks, there is no contract. The mirror-image trap. The second biggest trap is failing to classify goods vs. non-goods, so you apply the mirror image rule to a UCC transaction (where §2-207 explicitly abolishes it). Before you write a word on formation, say to yourself: Is this goods? Common law or UCC? Then trace offer → any termination → acceptance → timing.

Related doctrines and how they interact

• Consideration: offer and acceptance create the agreement; consideration makes it an enforceable contract. A validly accepted offer with no bargained-for exchange is still not enforceable (absent a substitute like promissory estoppel).
• Promissory estoppel (Restatement §90): the safety net when formation fails — reasonable, foreseeable reliance on a promise can create liability even without a completed offer-and-acceptance bargain.
• Option contracts / UCC firm offers: exceptions to the offeror's free power to revoke.
• Statute of Frauds: even a perfectly formed contract may be unenforceable if it falls within the Statute and isn't written and signed. Formation and enforceability are separate steps — don't collapse them.
• Definiteness / gap-fillers: if terms are too vague there may be no offer at all; the UCC's gap-fillers (§§2-305 to 2-310) can rescue a goods contract that omits price or delivery terms.