Usually, an essential prerequisite to the formation of a contract is an agreement: a mutual manifestation of assent to the same terms. This mutual assent ordinarily is established by a process of offer and acceptance. But it is possible to have mutual assent even though it is impossible to identify the offer and the acceptance. Thus, if A and B are together and C suggests the terms of an agreement for them, there would be a contract without any process of offer and acceptance if they simultaneously agreed to these terms. Frequently, especially in transactions of considerable magnitude, the parties negotiate the terms of a proposed contract until a final draft is typed or printed. The contract may be formed when the copies of the writing are signed and exchanged. Again, neither an offer nor an acceptance can be identified in this circumstance.
But, as indicated above, mutual assent usually arises through a process of offer acceptance and, even in cases where the offer and acceptance cannot be identified, the conceptual model of offer and acceptance may be a helpful analytical tool. We shall explore the framework of offer and acceptance after establishing some important ground rules.