# Acceptance

To constitute an agreement, there must be an acceptance of the offer. [**Acceptance** ](/learn/glossary.md#acceptance)is an implied or express act (i.e., conduct) that shows willingness to be bound by the terms of an offer (i.e., the act demonstrates assent). To be effective, both parties must understand and agree to be bound by the contract.

Express acceptance occurs when a party states that they accept the offer, and acceptance may be implied based on the parties’ conduct. For example, a retailer offers to sell a product to consumers for the price listed on the shelf. A consumer may accept that offer by handing the cashier the item and money to pay for it. The consumer does not need to say anything to complete the transaction. But the consumer must do *something* to accept. Silence, without more (such as handing over payment), is not acceptance. This is because silence may be evidence that the consumer either does not know about the offer or has rejected it.

A common problem in the business community is knowing what constitutes acceptance and what is negotiation. If an acceptance changes, adds, or modifies terms of the offer, it is a **counter-offer** and no contract is formed. The original party may decide to accept, reject, or propose another offer as a result. Although this sounds straightforward, with today’s fast-paced communications, parties may respond to part of an offer, negotiate various parts of the contract simultaneously, or agree to terms in installments. As a result, there may be confusion about what the full terms of a contract are.

Offer and acceptance form [**mutual assent**](/learn/glossary.md#mutual-assent), which should demonstrate a “**meeting of the minds**.” This is the parties’ intention to enter into a binding contract on the terms they agreed upon. If parties do not agree on the essential terms, then there can be no meeting of the minds to enter into a contract. This is the basis for many of the defenses to contract formation, will be discussion in a later section.

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Except where otherwise noted, this page's content is adapted from [Contract Elements](https://pressbooks.pub/introductiontobusinesslaw/chapter/chapter-10/) in [*Fundamentals of Business Law* ](https://pressbooks.pub/introductiontobusinesslaw/)by Melissa Randall (2020), used under [CC BY 4.0](https://creativecommons.org/licenses/by/4.0). <img src="/files/JAUNcQCPc1EP6ZAfe2rF" alt="" data-size="line">

Except where otherwise noted, this page is licensed under [CC BY 4.0](https://creativecommons.org/licenses/by/4.0). <img src="/files/JAUNcQCPc1EP6ZAfe2rF" alt="" data-size="line">

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