Mirror, Mirror on the Wall…
Photo by Michael Mulligan
When negotiating contracts, be mindful of the “mirror image rule.” The rule can be found in the Restatement (2nd ) of Contracts, §59, which provides: “A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter offer.”
In plain English this means that if your client gets an offer, he has two options. The client can accept the offer as written thereby forming a contract, or he can change the terms by adding additional or different terms thereby rejecting the offer and making a counter offer. Even the slightest change results in rejection. The rule can be a harsh and unforgiving trap for the unwary.
In fact, because of the harshness of the rule, the drafters of section 2-207 of the Uniform Commercial Code (“UCC”) modified it substantially as to merchants selling goods (but the definition of “goods” excludes all real estate). Learning the ins and outs of section 2-207 of the UCC is the bane of every first-year law student.
However, as to real estate, which is what this blog is all about, we are stuck with the mirror image rule. Real estate agents should understand the rule and know the difference between offers being accepted and offers being rejected with a counter offer. This does not mean that rejecting by making a counter offer is bad, of course. It does, however, mean the agent should give sound advice to the client before the client rejects the offer by insisting on some slight, insignificant change. True, the other party may accept the counter offer. But the counter offer may also sour the deal and prompt him to reevaluate his interest in the property.
–Russ DeMott
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Hi, very nice post. I have been wonder’n bout this issue,so thanks for posting