Negotiating a contract can be a contentious process with both sides butting heads on provisions, compensation, and due dates for deliverables. Once both sides resolve their differences, how do they determine when the agreement is struck? Signing on the dotted line isn’t the only way to signal that an agreement is legally binding and actionable. Attorneys understand what all parties say and do are just as important as the documents they sign. Getting it in writing, as it turns out, isn’t the only necessary component to contract acceptance.
Acceptance Through Actions of Involved Parties
Agreeing to contract terms doesn’t need to involve a verbal ‘yes’ and a signature. Sometimes the actions of both parties can signal contract approval. For example, if your business agrees to a price for items from a manufacturer, and the vendor ships the goods to your company, those actions point the terms being agreed upon. Accepting the goods delivered to your business may also constitute acceptance when a representative of your company solicits those goods. In short, if you’re not certain that you ordered the items in question, refuse them on delivery or contact the vendor directly to determine the reason for shipping. Unsolicited goods rarely lead to a legally binding agreement, but it’s important to check and make sure no one in your company has asked the vendor to ship them prior to acceptance.
Option Agreements in Contracts
Some buyers need some time to think it over, and that’s perfectly understandable when it comes to large purchases like real property. In exchange for the exclusive right to weigh the pros and cons, a potential buyer may pay an option fee for the seller to hold the item/property in question for a fixed period of time. No one else can legally purchase the item during this option period. In addition, an option cause can fix the terms of an agreement for the covered amount of time, ensuring the buyer won’t need to confront new — perhaps less favorable — terms once they come to a decision. That fee isn’t usually refundable if the buyer decides to go with a different piece of property or other product, though terms may vary by contract.
Conditional Acceptance of an Agreement
If you’ve ever heard a party say, “we have a deal if…” that’s a conditional acceptance of a contract. If your company chooses to meet the condition outlined by the other party to the agreement, then the contract should be legally binding and enforceable. What the condition might be varies by the particular agreement. It may be a particular pricing point, delivery date for materials, or project budget. Make certain your business can meet the condition laid out by the other side before accepting. Agreeing to a stipulation that you cannot meet could lead to a lawsuit later.
Facing a tough contract negotiation with another company? Have a debt that your company just can’t collect on? Our experienced business debt and commercial litigation lawyers have a solid reputation for recovering money owed for their clients and settling litigation matters amicably. Contact us today for a consultation with our legal team.