What constitutes acceptance of an offer?

Adam Keilen Business/Corporate Law

When it comes to contracts, under Michigan common law, what constitutes acceptance of an offer?

Under M Civ JI § 142.13, Acceptance, acceptance is a statement or conduct by a person receiving an offer that would reasonably lead the person who made the offer to believe that the material terms of the offer have been agreed to, although an offer may require a specific form of acceptance. A response that changes, adds to, or qualifies the material terms of the offer is not an acceptance. A material term is one that goes to the essence of the agreement.

In other words, generally speaking, and merely for demonstrative purposes, if you make me an offer to paint your house for $10,000, and I tell you that it “sounds good,” then I grab the paint cans and drive away, I may have accepted your offer because a reasonable person observing our transaction would likely believe that I had accepted your offer when I said “sounds good,” then left with your paint cans, conduct consistent with that of someone who had accepted your offer.

However, if you make me an offer to paint your house for $10,000, and the offer says it “must be accepted in writing, signed and dated,” then regardless of anything I say or do, the only way to lawfully accept your offer would be to put it in writing, sign it, and date it. In addition, if I do sign and date a written acceptance, but I change the price to $20,000, I have not accepted your offer; in fact, I have terminated your offer with a counteroffer.

Ultimately, the practical key here is to specify the method of acceptance when you make an offer.

Ludowici-Celadon Co v McKinley, 307 Mich. 149, 11 NW2d 839 (1943); Pakideh v Franklin Commercial Mortgage Group, 213 Mich. App. 636, 540 NW2d 777 (1995); Rood v General Dynamics Corp, 444 Mich. 107 , 507 NW2d 591 (1993); Harper Building Co v Kaplan, 332 Mich. 651, 52 NW2d 536 (1952).