What does “offer and acceptance” signify in a contract?

“Offer and acceptance” is fundamental to contract law as it encapsulates the essence of how a contract is formed. It signifies the mutual assent required between parties, meaning that one party makes a proposal (the offer), and the other party accepts that proposal, thereby creating an agreement.

In a contract, the offer outlines the terms that the offeror proposes, and the acceptance is the unequivocal agreement to those terms by the offeree. This bilateral exchange of assent is what creates a legally binding contract, assuming all other elements of a valid contract are present, such as consideration and capacity.

The option referring to stages of negotiation focuses on discussions that may occur prior to reaching an agreement, which is not the same as “offer and acceptance.” The requirement for contract modifications involves changes made to an existing agreement and does not pertain to the initial formation. Lastly, actions taken to enforce a contract relate to performance and compliance after a contract is already agreed upon, rather than the formation of the contract itself. Thus, the correct understanding of "offer and acceptance" highlights the core process by which contracts are established.