What role does "offer and acceptance" play in forming a contract?

"Offer and acceptance" is a fundamental principle in contract law that signifies a mutual agreement between parties. This process begins when one party makes an offer, proposing the terms of an agreement, which is then accepted by the other party. The acceptance must align with the offer to form a valid contract, indicating that both parties have a shared understanding of their obligations and responsibilities.

This concept is essential because it ensures that there is a clear consensus between the parties involved. Without a mutual agreement, there can be no enforceable contract. It helps to establish the binding nature of the agreement and confirms that both parties are willing to proceed under specific terms.

While establishing intentions and defining capacity are important aspects of contract law, and consideration involves the exchange of value between parties, the core function of "offer and acceptance" is to create that critical mutual agreement necessary for a contract to be formed. This is why recognizing it as the means by which parties come together in a legally binding way is crucial for understanding contract formation.