Offer and acceptance

Offer and acceptance are widely considered necessary elements for creating a contract, alongside other factors like consideration and legal capacity. Studying how they work is a classic method in contract law, though this traditional framework has been adjusted by later legal developments involving estoppel, misleading conduct, misrepresentation, unjust enrichment, and the power of acceptance. **Offer**

An offer is defined by Guenter Treitel as a statement of willingness to contract on specific terms, made with the intent that it becomes binding once accepted by the person it is directed to—the offeree. It sets out the conditions the offeror is prepared to be bound by. The Restatement (Second) of Contracts similarly emphasizes willingness, describing an offer as a manifestation of intent to enter a bargain that leads another person to reasonably understand that their agreement is invited and will finalize the deal. Offers can take various forms, depending on the jurisdiction. They may be made through letters, newspaper ads, faxes, emails, spoken words, or even conduct, as long as they communicate the basis for contracting. Traditionally, common law viewed advertisements as unable to contain offers, but this position is less strict in many jurisdictions today. Whether an agreement has been reached or a valid offer exists is a legal question. Some courts apply an "objective test," as in the English case *Smith v. Hughes*, which held that the key is not a party’s subjective intent but how a reasonable person would interpret the situation. In the UK, this test has largely been replaced by the Brussels Regime and the Rome I Regulation. An offer can form a binding contract only if it includes the essential terms. For sale of goods, some jurisdictions require at least four terms: delivery date, price, payment terms (including payment date), and a detailed description of the item or service. Other jurisdictions have different or fewer requirements. Without these minimums, courts may treat an offer as merely an advertisement. An offer must be serious to invite acceptance. An obvious joke does not qualify, as the offeror lacks actual intent to contract. In *Leonard v. Pepsico, Inc.*, a commercial offering a military aircraft for "Pepsi Points" was ruled a joke, despite clear terms (7,000,000 points for one aircraft), because of its humorous nature. Seriousness is judged objectively. In *Lucy v. Zehmer*, what one party thought were jokes about selling a farm became a binding contract, as a reasonable observer would have taken it seriously. Similarly, in *Berry v. Gulf Coast Wings Inc.*, an offer of a "Toyota" in a contest required the offeror to provide a vehicle, not a "Toy Yoda" doll, despite claims it was a joke. **Counter-offers**

The "mirror image rule" says an acceptance must match the offer exactly. Any change creates a counter-offer, which cancels the original offer. For example, in *Morton v 4 Orchard Lane Trust*, a response stating "acceptable provided the following changes and/or modifications are made" was a counter-offer, showing no meeting of minds. Once a counter-offer is made, the original offer can no longer be accepted later. **Unilateral contract**

A unilateral contract arises when someone offers to do something "in return for" a specific act. Acceptance may not need to be communicated; it can occur through performing the act, as long as the person does so in reliance on the offer. This differs from a bilateral contract, which involves an exchange of promises (e.g., one promises to buy a car, another to sell it). The case *Carlill v Carbolic Smoke Ball Co.* illustrates this: the company offered £100 to anyone who used its remedy and still got the flu. Carlill accepted by buying and using the remedy, then contracting the flu, making her eligible for the reward.