What Constitutes an Offer?
One particular thing about business contract law is that there must be an agreement based upon an offer and acceptance for the contract hold. What’s more, there must be some exchange of value between the two parties using the contract to make it valid. Thus, a contract is an agreement to exchange values between the party making an offer, or the offeror, and the party to whom such offer is made, or the oferee.
Let’s look a little bit closer at the offer part of a contract to see if we can add a little clarity to the topic.
A Contract’s Purpose
There are all kinds of contracts (lease, sale of goods, promise to render services). They each have a specific purpose in mind, which is expressed in the offer. So if the purpose of your contract was to secure the services of a painter to repaint your business office, an offer would have to be made and accepted. Now the question is, what are the terms of the offer? Thus, contracts need to include terms of agreement.
A Contract’s Terms of Agreement
The important thing here is that there is enough detail to make the offer and obligations it presents clear. This typically means that such terms must include some kind of material terms such as the price, type of services or goods, timeframe, and other key terms. Depending on the nature of the contract, terms may include a great many other things.
What’s more, a contract offer must have a consideration to hold. If you were to offer the painter $10,000 extra dollars when they finished on top of the amount you already agreed to pay in the contract, you couldn’t be contractually obligated to pay that extra without any consideration.
However, if you agreed to pay the extra $10,000 if the painter finished two weeks early and this was added to the contract, it would hold because of the valuable consideration of the expedited turnaround time.
A Party’s Capacity to Accept
Another legal consideration to an offer in a contract is what is known legally as “capacity.” That is, the person signing the contract must have legal authority over that which they sign for it to hold. This means that not just anyone can sign a contract for a company, but someone with the authority to do so.
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Yoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters..
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