Legal Definitions - power of acceptance

The power of acceptance refers to the legal ability of a person to agree to the terms of an offer, thereby forming a binding contract. When one party (the "offeror") makes a clear proposal to another party (the "offeree"), the offeree gains the power to accept that proposal. If the offeree exercises this power by accepting the offer according to its terms, a legally enforceable agreement is created.

This power is crucial in contract law because it dictates when an agreement becomes legally binding. The offeror can limit this power, for instance, by setting a deadline for acceptance or by revoking the offer before it's accepted. The power of acceptance is also terminated if the offeree rejects the offer or proposes new terms, which is known as a counter-offer.

Here are a few examples illustrating the power of acceptance:

• Example 1: Real Estate Transaction

  A homeowner lists their house for sale and receives an offer from a potential buyer for $400,000, with a condition that the offer expires in 48 hours. The buyer, in this scenario, is the offeror, and the homeowner is the offeree.

  How it illustrates the term: The homeowner now holds the power of acceptance. They can accept the $400,000 offer within the 48-hour window, which would create a binding sales contract. If they propose to sell for $410,000 instead, they are making a counter-offer, which terminates their power to accept the original $400,000 offer. If they do nothing and the 48 hours pass, their power of acceptance also expires.

• Example 2: Freelance Service Agreement

  A small business owner contacts a freelance web designer for a new website. The designer sends a detailed proposal outlining the project scope, timeline, and a fixed fee of $5,000, stating that the proposal is valid for 30 days.

  How it illustrates the term: The business owner now possesses the power of acceptance. By signing the proposal as presented within 30 days, they would accept the designer's offer, forming a contract for the website design. If the business owner responds by asking if the designer could do it for $4,500, they are making a counter-offer, which ends their power to simply accept the original $5,000 proposal.

• Example 3: Retail Purchase

  A customer sees a limited-time online advertisement for a specific brand of laptop on sale for $800, available only for the next 24 hours or while supplies last.

  How it illustrates the term: The customer has the power of acceptance. By clicking "Add to Cart" and completing the purchase process within the specified time and while the laptop is in stock, they accept the retailer's offer, creating a sales contract. If they wait until after the 24-hour period, or if the item sells out, their power of acceptance for that specific $800 offer is terminated.