What is acceptance?

In the law of contracts, acceptance refers to the promise or act of a buyer who indicates his willingness to be bound by the terms and conditions stipulated in a seller’s offer. Acceptance is a necessary element of a legally binding contract. If there is no acceptance, there is no deal.

Deeper definition

When an individual buys something on eBay, tells the cab driver where he wants to go, or hands $30 to the cashier at the cinema, he is accepting an offer. These actions communicate acceptance.

An acceptance may be conditional, express or implied. When it comes to business dealings, formal contracts can be too tedious for a busy schedule. Instead, buyers, contractors and merchants have adopted these types of acceptance as contracts. However, it’s always a good idea to eventually sign a formal contract in the event of a dispute.

Examples of acceptance

  • Conditional acceptance, also referred to as a qualified acceptance, occurs when a buyer tells the seller that he will accept the offer provided that some adjustments are made in its terms. This type of acceptance is a counteroffer. Counteroffers need to be accepted by sellers before contracts can be made between parties. For instance, a customer buys an item for $3,000 on Craigslist, and the seller replies, “I accept your offer provided that you also pay the delivery fee.” The seller places a condition on the sale, and if the customer does not pay for the delivery fee, the offer is no longer acceptable.
  • Express acceptance occurs when an individual clearly and explicitly expresses his agreement to an offer. Examples of express acceptance include signing a contract, orally accepting the offer, shaking hands, or even exchanging business cards with the offer and accepted terms.
  • Implied acceptance is an acceptance that is not directly stated but is demonstrated by any acts that indicate an individual’s agreement to the offer. Typically, it happens only when an agreement has already been set between a buyer and seller. It doesn’t involve a contract, but rather is oral or action-based in nature.

For example, if a client hires the same contractor to paint his house every year and stops by the shop to tell the contractor that it has been a year, the contractor may simply go to the house, complete the job, and request payment. This situation shows an implied acceptance because the client requested the painter’s help, and the painter agreed by going to his house and completing the task. It’s important to note that implied acceptance is considered valid only if the buyer already has a previous history of acceptance with the contractor.

If the buyer needs some time to consider an offer, he can enter into an option agreement. This allows the buyer to pay for the exclusive right to accept an offer during a fixed period. This gives him an opportunity to consider the offer without worrying that other potential buyers will snap it up, or that the terms and conditions of the offer will change before he makes a decision.

Use our calculator to figure out whether you’re on track to reach your investment goal.

Other Personal FinanceTerms

More From Bankrate