What Happens When Parties Don't Agree Right off the Bat | MN Contract Lawyer

All 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.

Forming a Contract May Take Time and Negotiation

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.

The End of an Offer

The concepts of counteroffers, rejections, and revocation are important because they all affect the initial offer. If timely made, they all kill the original offer in ways the parties must understand.


A rejection kills the offer. Once an offer is rejected it may not later be accepted. It is done and over. The party making the initial offer may decide to make it again, and that offer may be accepted or rejected. Or the person who rejected the offer may propose the same offer at a later time, which may be accepted or rejected.

However, once an offer is rejected, the person making the offer is no longer required to agree to those terms.


Rather than accept an offer, a party may propose a counteroffer. The counteroffer essentially rejects the offer, and proposes a new offer. If the counteroffer is not accepted, the original offer is still over and may not be accepted. The person making the original offer may decide to offer the same offer again, or not.


A revocation may occur only before an offer is accepted. An offer that has been accepted may not later be revoked. An offer that has not yet been accepted, however, may be revoked.

If a person makes an offer and then revokes it before the other party accepts it, the person making the offer is no longer required to agree to its terms. The person to whom the offer was made may no longer accept that offer. Again, either party is free to propose once again an offer with the same terms and conditions as initially made, which starts the offer process all over again.