offer
Offer is part of contract negotiations where a party agrees to do or not do something in exchange for consideration . An offer must be stated and delivered in a way that would lead a reasonable person to expect a binding contract to arise from its acceptance . An offer gives the offeree the ability to accept and form an enforceable contract.
When a valid offer is made, an acceptance by the offeree creates a binding contract. An offeror generally cannot retract the offer once the other party has accepted. A court may not find a binding contract regardless, though, if the negotiation did not involve consideration, involves an illusory promise , or if the offeror did not have the capacity to enter into the contract. However, a contract offer can be withdrawn by notification to the offeree of the intent to withdraw the offer before the offeree has accepted. Offerors typically can withdraw an offer before acceptance in any contract negotiation unless the parties have created an enforceable option contract . If the offeree rejects the offer, the offer can no longer be accepted by the offeree.
An offer can also be made in the form of a counteroffer . The offeree that receives the initial offer can make a new offer of their own instead of accepting the initial offer. This counteroffer acts as a rejection of the initial offer and creates an entirely new offer that can be accepted or rejected.
[Last reviewed in August of 2023 by the Wex Definitions Team ]
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