Business Law

Most people assume that when two parties agree on something in writing, they have a contract. They don't — not necessarily. A binding contract requires four elements to exist simultaneously: offer, acceptance, consideration, and a genuine meeting of the minds on material terms. Miss any one of those, and what looks like a done deal is legally just a conversation.

The tricky part is that "acceptance" sounds simple but frequently isn't. An acceptance must be unconditional and must mirror the offer. The moment a response adds a condition, requests further negotiation, or signals that the parties still need to formalize something, it stops being acceptance and becomes either a counteroffer or — the subtle killer — an agreement to agree. Courts do not enforce agreements to agree. You cannot sue someone for failing to follow through on a promise to negotiate in good faith alone. You can only sue them for breaking a binding contract, and binding contracts require all four elements to be present and clear.

The practical lesson matters everywhere in business: an email exchange that both parties treat as a done deal is often not a contract, especially when significant terms remain unstated. Price and duration aren't enough. Payment timing, liability caps, IP ownership, governing law — these are all material terms. If they're not agreed, there's no meeting of the minds, and without that, there's no contract. The time to learn this is before you walk away from other opportunities assuming you have a deal locked in.

Here's where it gets harder in practice: the scenario below looks like it has a clear offer and a clear acceptance. It doesn't.