Glossary

Offer and Acceptance

The foundational contract law requirement that a binding agreement exists only when one party makes a definite offer and the other party accepts its exact terms, forming a mutual manifestation of assent.

In CRE transactions, the offer-and-acceptance framework explains why a signed letter of intent is generally not a binding contract (it typically constitutes an agreement to negotiate, not mutual assent to definite terms) while an executed purchase and sale agreement is. A purported acceptance that changes any material term of the offer is legally treated as a counteroffer rather than an acceptance, which is why redlined term sheets and PSA drafts continue to be "offers" until every party has signed off on identical final language — a principle sometimes called the mirror image rule. Disputes over whether a binding contract was actually formed (as opposed to preliminary negotiations) are common in CRE litigation, particularly when a deal falls apart after extensive email negotiation but before formal execution.