Key Topics:  Essential Terms | Oral Versus Written Agreements  | Statute of Limitations  | Breach

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Offer and Acceptance.

A contract requires an offer and an acceptance. See   Lobar v. Lycoming Masonry, 2005 PA Super 201,  876 A.2d 997 (2005). What constituted the “offer” or  the “acceptance”?

In essence, a contract is formed by one party making  an “offer,” which is an objective manifestation of  intent to form an agreement. The offer can be  accepted by return promise or act so long as it is  reasonably responsive to the offer. Thus, for example,  if Jack says to Jill, I will sell you my car if you give me  $2,000. Then, if Jill then hands Jack $2,000 in cash,  the deal may be complete.

If, however, Jack replied by offering $1,500 or a  return promise to pay $2,000 over 4 payments,  attempted “acceptance” will serve as counter offer,  which voids the original offer. The courts have held  that “To constitute a contract, the acceptance of the  offer must be absolute and identical with the terms of  the offer,” Cohn v. Penn Beverage Co., 313 Pa. 349 at  352, 169 A. 768 (1934). Thus, for example, if Jack  says to Jill, I will cut your grass every week if you pay  me $200 every month, and Jill replies: “I can pay you  $100.” That response voids the offer and now it is  Jack’s turn to decide whether to accept the  counteroffer.

These are very simple scenarios are offered to outline  the basic structure of how contracts are formed. Or,  in lieu of a formal contract, there may be a formal  relationship between the parties that requires  payment, such as promissory estoppel or unjust  enrichment.

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