Deemed Acceptance of a Contract: Everything You Need to Know
Deemed acceptance of a contract refers to under what conditions a contract will be judged to be accepted by the party it is being offered to.3 min read
Deemed Acceptance of a Contract Overview
Deemed acceptance of a contract refers to under what conditions a contract will be judged to be accepted by the party it is being offered to. Technically, a contract is not deemed to exist until an offer is accepted, so what constitutes acceptance is a very important aspect of contract dealings. Acceptance could come through signing a legal document, but it could also come through a host of other actions, as well, such as paying money, verbally agreeing, and even taking no action, all of which would be as equally binding as a signature.
Acceptance by Actions
Actions can signal the acceptance of a contract just as readily as words or a signature can. For instance, if you offer money for a product or service and the seller accepts the money, then a contract of exchange will have been established. Or, if you offer a service for a product or a service for another service, the same principle of acceptance will apply.
Similarly, if you accept a good or service that you did not ask for, that may be deemed an acceptance of a contract, although this is not true in all cases. For example, if you receive unsolicited items in the mail along with a letter that says that if you do not return the items by a certain time you will have agreed to purchase them, you will be under no obligation to pay for or return them if the solicitor provides you with no means to return the items except at your own expense.
Even if they do, in some states, such as California, unsolicited items of value are deemed to be an unconditional gift, and thus using them or doing nothing with them is not deemed to be grounds for the acceptance of an exchange of value.
Along with actions, a contract can also be established verbally, in what is often called an oral contract. An oral contract can be entered into by simply responding in the affirmative to a request. For example, if a contractor said they could perform landscaping on your backyard for $4,000 and you replied, “Let’s go for it,” you would have entered into an oral contract.
That said, in all likelihood a contractor would then present you with an invoice detailing the work’s scope, including all costs, before commencing work. This is because even though the verbal acceptance would be as valid in court of law as a signed document, a written contract would still be easier to enforce.
Although in most cases a contract cannot be entered into if you take no positive action towards acceptance, there are exceptions to this rule. For example:
- If there was a preexisting relationship prior to the current contract. An example of this would be if you owned a bakery and had been ordering the same flour at the same price from a supplier for years. Then, one year, the price went up and the supplier sent you a letter informing you of the new price. If you did not respond to it, the supplier might assume you did not want shipments to stop, and so your silence would be taken as acceptance.
- If both parties have agreed beforehand that silence is the same as acceptance.
- If a party remains silent to an offer but acts in a manner consistent with acceptance.
For silence or no action to mean the acceptance of an offer, the following must be true of the offer:
- No express contract has been made for the offer.
- The offer will render a service.
- Due notice has been given by the offering party that they desire value for their offer.
- The offered service is done without a request made by the party to whom the service is being offered.
- The party being offered has full knowledge of all of the above conditions–there is no attempt at deception.
- The service offered is used.
Because of this, in most cases silence or a failure to act will not entail acceptance of a contract. Some form of positive act will have to be made, whether it be through words, an action, or a signature on a piece of paper.
If you need help understanding deemed acceptance of a contract, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.