What is the Mirror Image Rule?

The mirror image rule is a principle in contract law which states that an acceptance to an offer cannot introduce new or changed terms. If someone responds to accept an offer but adds in new terms, it becomes a rejection and counteroffer, and the original offer is no longer binding. The offeror has the choice of rejecting the counteroffer or entering into negotiations to reach an agreement on a new offer.

In a simple example of how the mirror image rule works, John Q. Public might enter into a contract to sell his car as is to Suzy J. Stone. When the two get ready to close the deal, however, Suzy provides John with an itemized list of things she would like addressed before the sale. She has changed the terms of the acceptance and this constitutes a rejection of the original offer. John can call off the deal without being penalized, or he can choose to negotiate with Suzy and reach new terms.

Negotiating contracts can get very complex and may involve a team of specialists who are all working to reach a deal which will be advantageous for the people they represent. It is not uncommon for a series of rejections and counteroffers to be made until the parties can reach an agreement. The mirror image rule allows people to choose between continuing or stopping negotiations when their binding offers are rejected in the form of acceptances with new terms or conditions.

There is one area in which the mirror image rule does not apply. This is in commercial transactions in the United States. When an offer-acceptance transaction takes place between two merchants and the terms are not materially altered by any changes put forward in an acceptance, it is a binding agreement. This allows merchants some flexibility so that they can do business, while also protecting merchants from changes in terms which do materially impact an offer. If, for example, a merchant decides to use a different carrier for shipping at the same price, this is acceptable. If the merchant decides to ship a completely different item, this is not.

In commercial transactions, merchants still have the right to reject an acceptance which makes a change in terms which is not material in nature. The merchant must notify the other party involved in the deal that the change is not accepted and that the deal must be renegotiated. This approach to the mirror image rule provides merchants an opportunity to refuse changes to the terms of a deal when they are presented, while also allowing deals to go through without the need for renegotiation when there are minor changes and neither party protests.