What constitutes an offer and an acceptance in contract law?

An offer in contract law is expressing the desire to enter into a contract. It must be made with the intentions that the offer will become binding as soon as the offer is accepted. An offer can be revoked anytime before it is accepted as long as the revocation is communicated to the offeree. A contract cannot be revoked if it was in an option contract. The offer should contain all circumstances for the proposal being made. The offeree should have a present intent to contract so it can be made clear that the offeree is serious. Once the offer is made, the offeree cannot change any of the terms of the contract. It must be exactly the same. The offeror can set a deadline as to how long the offeree has to accept the offer. The offeror can also demand a certain method of acceptance to be used.

An acceptance is a response to the offeree that indicated that they approve of the terms of the offer. Once an offer is accepted, a legally binding contract is created. An acceptance must be intentionally made. The offeree must communicate to the offeror that they agree with the terms of the proposed contract. The communication of the acceptance of an offer can be bilateral or unilateral.

Offers can be accepted instantaneously and non-instantaneously. This was the issue in the case of Ellefson v. Megadeth, Inc. Non-instantaneous forms of acceptance are methods utilizing mail, email, and fax. Non-instantaneous forms of acceptance can cause timing issues. The Ellefson case resulted in The Mailbox Rule. The Mailbox Rule states acceptances that are properly address and dispatched take effect as soon as they are sent regardless of whether or not it comes up lost. The Ellefson case has caused more offeror’s to say exactly how long the offeree has to accept by setting a date. However, if an acceptance is sent after a rejection had already been sent, the acceptance does not become binding until received by the offeror. The final exception to The Mailbox Rule is if the contract states that the use of The Mailbox Rule is not allowed.

It was ruled that Ellefson only sent a counter-offer because he could no furnish evidence that he had faxed the acceptance before the 5:00 PM deadline.