Which process transforms an offer into a contract through mutual agreement?

The process that transforms an offer into a contract through mutual agreement is known as offer and acceptance. This foundational concept in contract law emphasizes that for a contract to be legally binding, there must be a clear offer made by one party and a clear acceptance of that offer by another party. The acceptance must be communicated effectively, indicating the offeree’s agreement to the terms of the offer.

This mutual consent is crucial, as it reflects the parties' intent to enter into a contractual relationship on specific terms. Without both an offer and a corresponding acceptance, no binding contract exists. The other options, while related to the contract process, do not encapsulate the fundamental principle of mutual agreement necessary to form a contract. For instance, a counter-offer introduces new terms and negates the original offer, while contract execution refers to the process of signing or putting the agreement into effect, and contractual obligation refers to the duties established by the contract once it’s formed.