What is an offer?
Have you ever tried to sell something whether it is a car, a painting or a gadget you no longer need? The initial price that you set is what you call an “offer”. An offer is not something permanent because it can still be subject to haggling from the potential buyer. When you both agree to the final price, however, this offer becomes binding to both parties.
An offer is a changeable proposal between a buyer and seller to exchange cash for product or service. It becomes a binding contract between the parties when accepted, along with any related conditions. There are many kinds of offers, and each originates with features like the kind of product or service to be sold, the pricing requirements and the rules and regulations.
Purpose and terms
The purpose of an offer can be to provide a service for someone, to sell someone something, or to refrain from doing an activity. The parties involved usually want to know additional terms like the budget and time frame in which the service can be performed, or the product delivered.
In some contracts, the time frame is critical and binding. These are designed to deter business owners from accepting offers if they can’t deliver the product or service on time. For example, a retailer can’t ship a wedding gown after the wedding and expect their customer to be happy about it. If this happens, it’s called being “in breach” of contract, and the buyer can sue for damages.
The offer isn’t final until accepted. It is subject to negotiation between the parties until they both agree to the terms. It can also be revoked or taken back by the “offeror” before the acceptance. There are also instances that the offer can be terminated wholly or entirely taken off the table. For instance, if one or both parties died, one or both parties is declared insane, or if the thing required by the contract is destroyed. If one or both parties make a counteroffer which completely changes its terms, the original offer can also be terminated.
The consideration of an offer is the value that the parties bargained for. It is the price of the product or service offered. When the parties engage in constant haggling, what they are doing is coming up with a mutually beneficial agreement. The moment they agree on a fair price, the offer stands.
Suppose you want to hire a plumber to fix your sink. He would typically send you a formal quote of all the services that he needs to do and the corresponding price for it. If you think the services offered are a little too much, you can negotiate a lesser amount for a reduced service. If the plumber accepts, he can modify the quote, and the offer stands.
For the offer to be binding and enforceable, the parties must have the legal authority to make or accept it. The is called “capacity.” Parties are generally presumed to have the capacity if they’re 18 years of age and of sound mind. In some cases, a background check will be performed to determine the capacity of the parties involved in a contract.