All Minnesota contracts contain three basic concepts: offer, acceptance, and consideration. Offer and acceptance mean exactly what you think they mean. Consideration is what each side gives up in exchange for the benefit that he or she is receiving. Sometimes this is payment of money, sometimes it is doing something the person is not obligated to do, and sometimes it is refraining from doing something the person otherwise might do.
Offers are Not Always Accepted, As Is
Offers may be accepted or rejected. Offers also may be revoked. Counteroffers may be made. All contracts require consideration for the promises of the parties to the contract.
It is not often that an offer is made and accepted with valid consideration and no further negotiation occurs. Often offers are made and rejected or counter offers are made. Sometimes an offer is made and the other party never responds. Each of these actions has legal ramifications beyond the basic legal concepts governing offers and acceptance.
Counteroffers, Rejection, and Revocation
Below is an explanation of aspects of the contractual negotiation process and the way they change the status of an offer.
Sometimes, rather than accept an offer when it is received, a party will instead make a counteroffer. A counteroffer is a rejection of the original offer and its terms. A counteroffer is basically a new offer that may or may not be accepted by the other party (the original party that made the offer).
A rejection terminates the offer. After a party rejects an offer rather than accept it, that party cannot later change his or her mind and accept the offer, unless a new offer has been made. The new offer may be identical to the old offer, but nonetheless the offer must again be made before it may be accepted.
The party making an offer may revoke his or her offer at any point prior to it being accepted. Revoking the offer terminates the other party’s ability to accept the offer. The revocation generally must be communicated to the party to whom the offer was made. However, once an offer is accepted, the party making the offer is no longer able to revoke the offer.