What Are the 3 Elements of a Valid Offer?

Contract law is one of the oldest and most established areas of jurisprudence, yet the elements for a contract are simple. All that is required is an offer, acceptance of the offer and consideration. Within that simple framework, complicated issues can arise. For example, a common question is whether there was a valid offer. If there is no offer, there can be no contract. Offers at common law required three elements: communication, commitment and definite terms.


The person making the offer (the offeror) must communicate his offer to a person who may then choose to accept or reject the offer (the offeree). Often, this is not a serious issue to analyze, as the offeror is free to communicate his offer in any means, whether orally (spoken offers) or in writing.


Whether the offeror is committed requires an analysis of whether the offeror, in his communication of the offer, intended to be bound by the offer. An intent to be bound may arise through course of conduct, such as explicitly stating “That is my final offer.” There may be a question as to whether the alleged offer is an actual offer or merely an invitation to receive offers. Auctions are a common example of invitations to receive offers, rather than a contractual offer in itself.

Definite Terms

All offers must be definite and specific in their terms. The essential terms of the deal, such as price, manner of acceptance and timing, must be stated. An example is “I offer you my grandfather’s antique watch for $200. You must tell me that you accept this offer in writing, and I must receive it before 2 p.m. on Tuesday, or I will offer it to my brother.”

Other Issues

If the offer contains the three necessary elements, once that offer is accepted a contract arises. Acceptance must also be analyzed, however, and acceptance requires some form of expression of agreement with the terms of the offer. If one element of a contract is missing (offer, acceptance or consideration), there is no contract. If there is no contract, there may not be a valid remedy if one party believes the other party has somehow caused him harm.

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