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The Employment Contract

Counter-offers in the Formation of Binding Contracts-What You Should Know

counter-offer

I am occasionally contacted by employees who have attempted to negotiate a contract of employment but difficulties have arisen and they want to sue for breach of contract.

The first thing that needs to be addressed, however, is whether a binding, enforceable contract has been entered into between the employee and the employer with whom he is negotiating.

It is not always crystal clear.

Let’s take a look at how binding contracts come into existence, shall we?

In order to form a binding contract you need three things:

  1. Agreement
  2. Consideration
  3. Intention to form legal relations

In assessing whether agreement has been reached between the parties the role of counter-offers is an important one..

Offer

For agreement to be reached an offer must be made and the offer should be clear and unambiguous as to the terms on which the offeror is willing to contract.

If statements are made in negotiations but are not intended to conclude in a contract these statements are called ‘an invitation to treat’.

Acceptance

Acceptance is a final and unequivocal expression of agreement to the terms offered.If the offeree intentds acceptance of the offer he must communicate this acceptance to the offeror.

Counter-offers

Counter-offers can muddy the waters, however, because if the response by the offeree is not a clear and unconditional acceptance of the offer the response may be considered a counter-offer which in turn may be accepted or ignored by the offeror.

If an offer is met with a counter-offer this has the effect of rejecting the original offer. And if the counter-offer is refused the initial offer cannot now be accepted.

Conclusion

You need to be careful in any negotiations you enter into, whether in negotiating a contract of employment or any other contract, and be clear as to whether you are making a counter-offer or merely seeking further information or clarification about the terms of the offer.

You can learn more about contract law in Ireland here.