Accepting the offer is the next step in establishing a valid contract. Most importantly, the offeree must show intent to be bound by the contract upon acceptance. This can look different among different types of contracts. In unilateral contracts (a promise in exchange for an action), the contract is accepted once the offeree performs, or begins performance, on their side of the contract. For example, if Ben promises a $100 reward for the return of his lost cat, Liz accepts the contract when she returns the cat to Ben. If she were to call Ben and simply promise to find the lost cat, no contract would be formed because Liz did not complete the action Ben requested. Liz would have to find Ben’s cat and return it before a contract is formed between them. Bilateral contracts, on the other hand, can be thought of as a promise in exchange for a promise. If, for example, Liz decided to sell her car to Ben, Ben then makes an offer and Liz accepts the offer, a contract is formed before money, or the car, is ever exchanged.
If the offerer makes an offer, but the offeree makes a counteroffer instead of accepting, the original offer is terminated. Then the original offerer may decide whether to accept the new offer, make a new counteroffer, or reject the offer altogether. In effect, a counteroffer starts the entire process over.