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Contracts • Contract Formation
K#028
Legal Definition
A conditional acceptance terminates the original offer, and usually occurs where one party "accepts" but includes language like "if," "only if," "provided," "so long as," "but," or "on the condition that." Under common law, a conditional acceptance is a counteroffer that can be accepted by conduct. Under the UCC, a conditional acceptance is a rejection, though later conduct can create a contract.
Plain English Explanation
Generally, when someone makes you an offer, you have the power of acceptance, meaning you can, if you choose, accept the offer and create a binding contract. Exams like to test grey areas, though. So what happens when the offeree says or does something other than a clear form of acceptance? You need to analyze what they say or do and identify what affect it may have on the original offer.
A conditional acceptance sounds a lot like a normal acceptance, except it adds on some sort of conditional statement, like "but" or "only if." For example, if someone says, "I will sell you my iPhone for $500," and you respond with, "Ok, but first let me ask my wife." Or "I'll buy it only if you throw in the headphones." Your attempt to add terms to the agreement means that the original offer no longer exists. Under common law, you've created a counteroffer, and under the UCC, you've rejected the original offer.
A conditional acceptance sounds a lot like a normal acceptance, except it adds on some sort of conditional statement, like "but" or "only if." For example, if someone says, "I will sell you my iPhone for $500," and you respond with, "Ok, but first let me ask my wife." Or "I'll buy it only if you throw in the headphones." Your attempt to add terms to the agreement means that the original offer no longer exists. Under common law, you've created a counteroffer, and under the UCC, you've rejected the original offer.
Visual Aids
Related Concepts
Are pre-existing duties valid consideration?
Though offers can generally be freely revoked, what are the 4 exceptions?
Under battle of the forms, what happens to additional terms in an acceptance between two merchants?
Under battle of the forms, what happens to different terms in an acceptance between two merchants?
What are consideration substitutes?
What are illusory promises and how do they affect a contract?
What are requirement and output contracts?
What are the methods of terminating an offer?
What are the UCC Gap Fillers?
What is an option contract?
What is promissory estoppel?
What is the effect of an offeree beginning to perform in response to an offer?
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