An offer is not (yet) a contract. An offer is a written proposal from one party to another; the latter intending to accept, decline it or make a counter-offer.
When the offer is accepted – by declaration of consent with the intention to be bound, it concludes into a contract.
Following from this, the offer is binding and therefore there are some essential elements to bear in mind when drafting or reviewing an offer. When the offer is agreed on, it concludes into a contract. When the offer does not cover certain elements, the offer could be qualified as an invitation to enter into negotiations or circumstance could arise of pre-contractual liability when the offer is revoked.
Essential elements in an offer to conclude into a contract
One essential element of the offer is that it needs to be adequately priced and completely priced according to the request for proposal. Hence, the offer must state the object, the quantity and the price(s). Concluding, it is relevant that the content is properly defined so that consent to the content/offer must be possible without a reaching a new agreement.
Another crucial element is that the offer must state the offering party his intention to be bound by agreement. If not, the offer could be qualified as rather an invitation to enter into negotiations.
Furthermore, it is advised that the offer indicates a period during which it is valid. During this period the offer is not revocable or if so it could be that pre-contractual liability occurs. If there is no period mentioned, this period can be indicated according to good faith.
I have to mark that an offer can be withdrawn without liability if the withdrawal reaches the party who before the offer has been accepted.
Essential elements in the acceptance of the offer to conclude into a contract
The acceptance has to be in correspondence with the offer; without additions, limitations. The acceptance may not hold essential modifications to the offer. Spanish case law dictates that there is an agreement with consent to essential terms. So in general, the acceptance of the offer must not be qualified as a counter-offer, if parties wish to conclude the offer into a contract.
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