What is the mirror image rule?
What the definition of the mirror rule?
What are some examples to show how it works in real life?
In this post, we will break down the concept of the “mirror image rule” so you know all there is to know about it.
We will define mirror image rule, look at this legal notion under the common law, how it applies when a transaction is governed by the UCC, how it affects the enforceability of contracts and more.
Are you ready?
Let’s get started!
What is the mirror image rule?
The mirror image rule is a concept in contract law stating that for an offer to be accepted, the offeree must accept the offer without any modifications and in a clear, absolute and unequivocal way.
A contract is formed when the “mirror image rule” applies.
In other words, if the acceptance of the offer is the “mirror” of the offer made, you have a legally binding contract.
Should the offeree accept the offer with modifications (acceptance is not the mirror of the offer), legally speaking that means that the initial offer was rejected and a counter-offer was made.
The mirror image rule is also referred to as the “unequivocal and absolute acceptance requirement”.
The mirror image rule is a common law concept governing contract formation and helping define when a contract is formed and becomes legally binding.
If you are negotiating a contract, until you have not reached a point when there is an offer made and the offer is integrally accepted, the mirror image rule will not apply for the contract to be formed.
According to Cornell Law School’s Legal Information Institute, the mirror image rule is defined as follows:
“In contract law, a doctrine requiring any acceptance to be an unconditional assent to the terms of the offer.“
What is notable with this definition is that in contract law, a contract is formed when there is:
- Unconditional acceptance
- Terms of the offer
This means that the offer must be accepted in its integrality without any modification for the contract to be formed between the offeror and offeree.
The mirror image rule law, a contract is formed when a person makes an offer to another person to be legally bound by some terms and conditions and the other party accepts the offer “as-is”.
When the offer is accepted, the mirror image rule applies and a contract is legally formed.
For example, if you are looking to renovate your house, you may negotiate with a contractor.
If a contractor makes you an offer to renovate your house for $20,000 and gives you details of what’s included in the offer, by accepting the offer without any modifications, a contract is formed on the basis of the mirror image rule.
Essentially, the contractor gave you an offer to be legally bound in a renovation contract with you and you accepted in an unconditional and integral way.
The common law rule of the mirror image is very important as it legally defines when a contract becomes legally binding and enforceable.
Essentially, until an offer is accepted, the parties are not legally committed to one another.
As a result, the failure to perform any obligation cannot lead to a breach of contract or a party cannot enforce terms of a contract that has not yet been formed.
If the mirror image rule does not apply, in most cases, the parties negotiating a contract can essentially put an end of their negotiations and walk away without any further obligations.
This rule is also significant as the law will consider a person to be legally bound to the terms of a contract when that person had the intention to be bound by such terms.
Otherwise, it would not make sense for the law to hold someone accountable when that person was merely negotiating a contract or had not reached a level of satisfaction allowing or her to give an unconditional assent or acceptance.
Contracts governed by the rules derived from the Restatement of Contracts are subject to the “mirror image rule”.
In other words, aside from the sale of goods, for a contract to be formed, there must be an offer and a clear acceptance of the offer.
Under Section 59 of The Restatement (Second) of Contracts, a reply to an offer conditional on the offeror agreeing to terms that are different than the original offer is not considered an acceptance but rather a counter-offer.
The contract will become legally binding when the accepting party accepts the terms of the offer exactly as it was offered.
However, the 2nd restatement of contracts provides that if the parties to a contract not agreed on the essential terms, the court may supply “a term which is reasonable in the circumstances”.
This position is tricky for the courts.
If the parties have not agreed on the essential terms of a contract, it begs the question of whether a contract should be formed between them at all and should the court interfere in the negotiation between the parties.
Most states in the United States have adopted the Uniform Commercial Code (UCC) governing the transaction of goods.
Although the mirror image rule exists in the American common law, under § 2-207 of the UCC, the mirror rule is dispensed.
Section 2-207 states:
“(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.”
As a result, if a particular transaction is governed by the UCC, then an offer may be accepted even though it may state terms additional or different than the terms made by the offeror in the initial offer.
If the UCC applies, it will be harder for contracting parties to walk away from a contract in the event the terms of the offer were not accepted in full.
The UCC is a statute that provides for an exception to the mirror image rules for merchants selling goods.
More specifically, the UCC provides that in the sale of goods by a merchant, an offer can be accepted even though the offeree adds additional terms to the offer or includes terms that are different than what was contained in the offer.
Section 2-207 of UCC clarifies that the additional terms will be construed as a proposal to add something to the contract.
However, the contract is formed nonetheless.
UCC applies to the sale of goods contracts between merchants.
As a result, the mirror image rule will apply to the sale of goods with non-merchants or contracts that do not involve the sale of goods.
Common law example
For example, John wants to sell his house.
However, his house requires a lot of renovations and so he decides to sell his house for a lower asking price but on an “as-is” basis.
Suzanne looks at John’s asking price and accepts the terms without any changes.
In this example, the mirror image rule applies and there is mutual assent between John and Suzanne as John’s offer was integrally accepted by Suzanne.
However, if Suzanne would have accepted John’s offer and said that he needed to fix the roof at his expense, then Suzanne’s proposal becomes a counter-offer.
If John rejects the counter-offer, no contract is formed (mirror rule does not apply).
If John accepts Suzanne’s counter-offer, there is the “meeting of the minds” or a contract is formed (mirror image rule applies).
UCC sale of goods example
You have Merchant A looking offers to produce 1,000 units of certain goods needed by Merchant B for a specific price.
Merchant B accepts Merchant A’s offer provided the Merchant A assumes the delivery cost.
In this example, even though the Merchant B’s acceptance did not mirror Merchant A’s offer, under UCC, a legal contract is formed.
Under common law, Merchant B’s acceptance would have constituted a counter-offer whereas under UCC it is an acceptance of the offer.
What is the mirror image rule in contract law?
A mirror image rule in contract law is the doctrine that states the acceptance of the offer must specifically match the terms of the offer.
If a person accepts your offer and purports to have accepted everything in full but in reality, the terms of the acceptance are not identical to your offer, the mirror image rule will not apply and you will not have a formal acceptance.
If there is a conditional acceptance or acceptance with a proposal to change certain terms of the initial offer, legally the initial offer is rejected and a counter-offer is made.
Does the UCC have the mirror image rule?
Section 2-207 of UCC titled “Additional Terms in Acceptance or Confirmation” overrides the mirror image rule in transactions where UCC applies.
Section 2-207 UCC states the following:
Uniform Commercial Code (Section 2-207)
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.
What are the differences between UCC and common law on the mirror image rule?
Under common law, when an offeree accepts the terms of an offer in full, unconditionally and unequivocally, a contract is formed and will be binding on the parties.
Under UCC, particularly to the sale of goods between merchants, when an offeree accepts an offer but adds additional terms or accepts terms different than the original offer, a contract can be formed.
UCC essentially dispenses the application of the common law mirror image rule to the sale of goods between merchants.