Contract offer

Contract Law

The Offer

The Main Elements Of A Legally Enforceable Contract?

  • The Offer
  • Acceptance

  • Intent

  • Capacity

  • Consent

  • Consideration

  • Legality

  • Performance.

See: Contract Law – Introduction for the following…

Clever Content

  • Terms you need to know
  • What is an offer?
  • What is a firm offer?
  • What is needed to make an offer legally binding?
  • The main elements of an offer.
  • What is not an offer to contract?


Legal Terms You Need To Know

  • Offeror - The person or ‘party’ who makes the offer.
  • Offeree - The person or ‘party’ has the option to accept the offer.
  • Consideration - Something of value that is bargained for and passed from the ‘offeror’ to the ‘offeree’.
  • Terms and conditions - The details of the offer.

What is an offer?

An offer is defined as 'the act of offering something for sale, or the submission of a bid to buy something’.

What is a 'Firm Offer'?

An offeror can normally cancel (revoke/terminate) an offer at any time before it has been accepted unless it is a firm offer’.

A firm offer is made by a merchant or trader. It must be in writing and state a specific time limit for the offer. It is a promise to keep a sale offer open for a certain amount of time.

What is needed to make an offer legally binding?

For a contract to exist, there must be an offer. A legally binding offer must include a promise from the person making the offer (the offeror) and a clear demand for action or for something of value from the individual receiving the offer (the offeree).

The offer must clearly define the terms of the agreement including:

  • The price
  • The specific actions of each party
  • The method of acceptance
  • Time limits or constraints for acceptance of the offer.

Example: “I offer you this car for $3000. If you want to buy it from me you must accept the offer, in writing, by 5pm today or I will offer it to someone else.”

What are the main elements of a legally binding offer?


The offer must be made willingly. The offeror must not be forced of threatened (under duress) when making the offer.


There must be evidence showing that the offeror intended to be bound by a legally enforceable agreement (a contract). In some cases, what appears to be an offer  may be an 'invitation to receive offers'. This is is common in auctions.

The method of communicating the offer will often show whether the offeror intended to be bound by the offer.


The offeror must communicate the offer in a clear and appropriate manner.

The offeree must be able to understand the offer and be able to accept or reject it. 

In most cases, the offeror can communicate their offer by any method. This may be in writing or oral (spoken) although some contracts e.g for ‘real estate’ must be in writing to be legally binding - see below.

The Statute Of Frauds

The ‘Statute of Frauds’ requires a written offer and acceptance in certain situations including:

  • Agreements regarding real estate
  • Answering for another persons debts
  • Marriage prenuptial agreements
  • Contracts that the parties cannot perform within a year.

Note: If an offer is made orally it is always best to make the acceptance in writing, clearly stating the points in the offer you are accepting. This will help to make sure that there are no misunderstandings later.


There must be a clear exchange of something of value – ‘I’ll give you a lift home for free,’ does not have an exchange of value between the two parties (only one person gains – the person getting the lift home).

What is not an offer to contract?

  • An invitation to offer. E.g "Who would like to buy my fish?" This is not a legally binding offer because I am 'inviting people to make an offer to buy my fish.
  • An offer where the terms are vague or unclear – The terms must be clear enough to expect a ‘reasonable person’ to understand them.
  • An offer without an exchange of something of value between the contracting parties (consideration). E.g “I’ll cut your grass later” is not a contractually binding offer as there is no exchange between the two parties.

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Posted in Business Law, Contract Law.