Can silence lead to the creation of a contract?

Can silence lead to the creation of a contract?

On Behalf of | Jan 30, 2019 | Uncategorized |

For a contract to be created, there must be an offer and an acceptance of that offer. Usually these two basic principles are easy to spot in practice. For example, a homeowner may offer compensation to a business in exchange for home improvement work to be done within a specified amount of time. What happens, though, when an offer is made and there is no explicit acceptance of it?

Generally speaking, silence does not constitute acceptance of an offer. After all, in most cases, this would lead to a ludicrous outcome. It would also make it too easy for individuals to claim that a contract was created and breached. With that being said, there are situations where a court may consider silence to constitute acceptance of an offer.

Acceptance by silence is usually dictated by the historical relationship of the parties involved. So, if a supplier notifies a buyer of a price increase, but the buyer routinely accepts the supplies and pays the increase, then subsequent price increases without response will likely be considered an acceptance, especially if the goods continue to be delivered. This highlights another aspect of acceptance by silence. When a party doesn’t explicitly accept an offer but carries out its terms of the offer, then a court may decide that there was implicit acceptance and, thus, a contract was created.

Contracts, while extremely helpful in the business world, can pose all kinds of headaches to those who don’t handle them carefully. Agreements should be memorialized in writing with terms that are clear. This will ensure that all parties know and understand their rights and obligations under the agreement, and it will help make a claim for breach of contract easier to prove. Business law attorneys skilled in drafting detail-oriented contracts stand ready to help Louisianans deal with these matters.