The Offer

An offer is as it sounds: the original asking price for the contract. Seems simple – and in most contracts, it is. However, problems start to arise when the offers are met with counter offers and new counter offers, etc. This can be confusing, both for the contracting parties, and for others trying to figure out who offered what, and when, for how much, and so forth.

The second question to answer, therefore is “How is an offer defined in legal terms?” As with many things in law, this turns out to have several, related, answers. However, an offer, legally speaking, is best described as the following:

An offer is defined as “the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.^[1]

There are really two types of offers – unilateral and bilateral. A unilateral offer means that it can be accepted without a promise of return performance, but rather may only be accepted by the actual performance. Remember the “award for information about the criminal” scenario from before? That, and many other “award” posters (“Lost Cat – Fluffy, $200 Reward” … that’s an expensive cat) constitute unilateral offers. To accept, you bring information or Fluffy to the individual putting up the poster to fulfill the contract.^[2] A bilateral contract is one which invites acceptance by something other than performance – by payment, or a return promise.^[3] Bilateral contracts are usually what people think of when they think “contract.^[4]”

While you have some understanding of an offer now, it is equally important to understand what are not offers, as there are many statements which may resemble an offer, but which are actually not offers at all, and therefore, cannot form the basis of a contract. We will deal with each in turn below.

[1] . Zimmerman v. McColley, 826 N.E.2d 71, 77 (Ind. App. 2005).

[2]  “A unilateral contract arises without a “bargaining process or exchanges of promises by the parties. Only one party makes an offer (or promise) which invites performance by another, and the performance constitutes both the acceptance of that offer and the consideration.” Kelly v. Levandoski, 825 N.E.2d 850, 861 (Ind. App. 2005)

“[3] It is most commonly a bilateral contract whereby the debtor promises to render the substituted performance and the creditors promise to receive it in full satisfaction.” Henry B. Gilpin Co. v. Moxley, 434 N.E.2d 914, 918 (Ind. App. 4th Dist. 1982).

[4] “A promise is a sufficient consideration for a return promise. This has been true for at least four centuries, ever since bilateral contracts were recognized.” Leatherman v. Mgt. Advisors, Inc., 448 N.E.2d 1048, 1050 (Ind. 1983)