Canadian Business Contracts Handbook. Nishan Swais
communicated. In fact, courts require that acceptance be even more clearly communicated than an offer. The reason for that is simple: Offers are made all the time and it would be unfair to constantly burden offerees with proving that they didn’t accept an offer. Most of us would be tripping over ourselves just to ensure that we didn’t unintentionally sign up to the hundreds of unsolicited deals offered to us every day.
Acceptance must be clearly and unambiguously communicated to the offeror by the offeree to be considered acceptance at law. “I will buy your car for $10,000” is the answer the offeror should be looking for before he or she starts to clean and prepare it for delivery to the offeree. That message is clear and unambiguous evidence of an intention to accept the offer.
One final point to make about communicating acceptance is that in contract law, silence is not golden. While the law generally regards silence as rejection of an offer, an offeree may, in some circumstances, wish to specifically communicate to an offeror that he or she is not accepting the offer. This is the most certain way to ensure that there is no misunderstanding about the offeree’s intention. In other words, say “no” if you don’t want to accept an offer.
2.2b Conditional offers
An offeror may stipulate one or more specific conditions as part of an offer. If that happens, then to accept that offer, the offeree must meet those conditions or the offeree’s acceptance will not be considered acceptance, at law.
You, as the offeror, might say, “I offer to sell you my car for $10,000 on the condition that you accept my offer before Sunday at noon.” In this case, as in all cases, the offeree may accept or reject the offer. In order to accept your offer, the offeree must meet your condition. Specifically, acceptance must occur before Sunday at noon.
This is known as a conditional offer. In general, conditional offers can set all kinds of conditions for the offeree to meet. Unless the conditions are met, acceptance of the offer will not be valid. With that in mind, it should be obvious that an offeror can impose any number and type of conditions.
For example, you as the offeror might have said, “I offer to sell you my car for $10,000 on the conditions that you accept my offer before Sunday at noon and notify me of your acceptance in writing.” The offeree must now jump through two hoops to validly accept the offer: Accept before Sunday at noon and do so in writing. If these conditions are not met, the law will not deem acceptance to have occurred.
There are three additional points worth making regarding conditional offers: waiving conditions, changing conditions, and no conditions.
Waiving conditions
An offeror can waive one or more of the conditions he or she is imposing as part of the offer. In so doing, the offeror is telling the offeree that the waived conditions no longer must be met in order for acceptance to be valid.
Returning to our example, you, as the offeror, may waive the condition that acceptance must occur before Sunday at noon. You may have decided that you are willing to have your offer left open for acceptance until after that time. In that case, the offeree no longer needs to meet that condition because, legally speaking, it no longer applies. You could do the same regarding the condition that acceptance be communicated in writing. You may have decided that you are willing to rely on your friend’s verbal acceptance of your offer.
Note that only the offeror can waive the conditions he or she is imposing. The offeree cannot simply decide that the conditions do not apply. To ensure that the offeree understands this, most conditional offers state that the conditions are solely for the benefit of the person imposing them (in this case the offeror) and can only be waived by that person. (See Chapter 6, section 2.6 for a further discussion of contractual conditions.)
Changing conditions
Can an offeror change a condition of acceptance after an offer is made? The answer is yes, provided that the offeree agrees.
As you can imagine, changing any condition after an offer has been made can be tricky. There are only three ways for an offeror to change a condition. The first way is to waive the condition, discussed above. The second way is to revoke the offer, discussed in section 2.2d. The third way is to obtain the offeree’s consent to change the condition.
To obtain the offeree’s consent to change a condition, the offeror and offeree must agree on the change. For example, both the offeror and offeree may agree that the condition to communicate acceptance of the offer in writing before Sunday at noon will be changed to require that the acceptance be communicated before the preceding Saturday at noon or, perhaps, the following Monday at noon. Likely, the offeree won’t agree to the change to Saturday (because it would force his decision up by a day) but it is nevertheless something both offeror and offeree can agree to do.
Of course, once an offeree has met a condition of acceptance, the offeror cannot change it. That would amount to “moving the goal posts” mid-game. If an offer was conditional on the offeree submitting a deposit of $50,000 and, in fact, the offeree submitted a deposit of $50,000, the offeror cannot then change the condition so that the deposit amount must be $75,000.
No Conditions
Suppose, in our example, you had not placed any conditions in an offer and simply said to your friend, “I’ll sell you my car for $10,000.” Now suppose that he doesn’t respond but, several years later, after receiving a large bonus at work, contacts you to say that he accepts the offer. Suppose further that you no longer want to sell your car, which is now worth twice what you originally offered to sell it for. Are you, as the offeror, now legally bound to sell your car to your friend for $10,000 just because you didn’t impose, as a condition, a deadline on when acceptance must be communicated (e.g., before Sunday at noon)?
The short answer is no. Fortunately for the offeror, the law steps in to impose a reasonableness standard on acceptance of offers. Is it reasonable for the offeree to assume that the offer made by the offeror should remain open indefinitely? In most cases, no. Each case would have to be judged on its own merits but, generally speaking, common sense determines whether an offer is still open for acceptance. Of course, that is not something you should leave to chance and is yet another reason why it is worth learning to write your own business contracts.
2.2c Conditional acceptance and counteroffer
It may have occurred to you that an offeree can impose conditions of his or her own as part of the acceptance of an offer. This creates a conditional acceptance scenario, which is, at law, no acceptance at all. At law, conditional acceptance (as opposed to conditions of acceptance) is considered a new or counteroffer.
To return to our example, your friend, as offeree, may, on the Saturday before the Sunday noon deadline, write the following note to you regarding the sale of your car: “I accept your offer.” In so doing, he will have met your condition and, thereby, accepted your offer in a way that the law will recognize as valid.
What if, on that same Saturday, your friend had instead written, “I accept your offer on the condition that the car is safety certified”? In that case, the offeree has still met the condition imposed on him, but imposed a condition of his own, namely, that the car must be safety certified.
How about, if instead of imposing a condition of his own, your friend (again, on the Saturday before the deadline) had written, “I accept your offer but I am only willing to pay $9,000 for your car.”
In both of these cases (i.e., where the offeree imposes a condition of his or her own on the offeror or changes a term of the offer) the original offer is deemed, at law, not to have been accepted and the offeree to have made a new offer of his own to the original offeror. In other words, the offeree has made a counteroffer and, in the process, has become the offeror. Correspondingly, the original offeror now has become the new offeree.
Most importantly, this now means that the original offer is no longer open for acceptance