Contract Acceptance: It’s More than just a Handshake

Proposing a contract is not the same as entering into a legally binding agreement. Striking a deal often requires back and forth negotiations between parties. When it comes to your business, this process is often crucial to creating contract language that your company can live with, deliver on its terms, and still turn a profit in the process. So how do you know when you actually have an agreement that will hold up in court? Our commercial litigation lawyers examine the finer details of contract acceptance.

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Requirements for Conditional Acceptance

Through the negotiation process, the other side may state, “I’ll agree to the deal if your business fulfills a certain stipulation for me.” Lawyers and legal types refer to that as a conditional acceptance. In essence, if you or business meets the terms proposed, the bargain is struck and the contract is made binding. Alternatively, you may choose to counteroffer with modified terms. This action, by the legal letter of the law, rejects the original conditional proposal and offers a new arrangement to the other side.  Your company’s exact situation may differ depending on the type of agreement you’re entering into. Our attorneys can provide a more detailed analysis of your situation if you give our office a call.

Grounds for No Acceptance

Under certain conditions, it’s legally impossible for a party to a contract to enter into a binding agreement. The three circumstances are as follows:

  • Contract is Based on False Terms – if you or the other side lies to coerce finalization of the agreement, it’s null and void.
  • Acceptance is Really a Counteroffer – once a side proposes conditions on acceptance, it’s technically a new agreement and both sides must sign off on the revised terms.
  • Other Side Not Ready – if the other side wants to think it over before agreeing, you don’t have a legal contract under a formal ‘yes’ is returned.

Accepting a Contract through Actions

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In certain retail conditions, you don’t need a verbal yes to obtain evidence that a contract exists or that both parties have accepted the terms. For example, if your company proposes a price to purchase raw goods from a vendor, and the vendor ships those materials, your business may be able to assume that the vendor has agreed to your proposed terms. Of course, this only applies when you or another consumer actually ask/purchase goods for sale. A retailer can’t simply start shipping goods to wherever they like and bill the receiver for the merchandise.

Navigating the contract negotiation process can be difficult for those without experienced legal advocates assisting them. Without appropriate help, you can easily enter into terms that may pan out poorly for your company, which can damage its long-term health and profitability. If you’re about to enter into a new agreement, contact our Pennsylvania commercial litigation attorneys to schedule a consultation. We can go over the terms of the agreement, or take the lead in developing a new deal that can help your company achieve its goals.