There are a number of requirements for the formation of a contract. One such requirement is that an offer to contract is made.

All contracts start with an offer. An offer creates the power of acceptance in the other party and a corresponding liability on the part of the offeror. To be an offer, there must be an expression of a promise, undertaking or commitment; certainty and definiteness in the essential terms; and a communication to the offeree.

A promise, undertaking or commitment is more than a mere invitation to begin preliminary negotiations. There must be an intent to enter into a contract. One must look to the languages used, the surrounding circumstances, prior practice and relationship of the parties, the method of communication, and industry custom.

The terms of the offer must be definite and certain. Terms are definite and certain if enough essential terms are communicated so that the contract is capable of being enforced. Essential terms include the identity of the parties and the subject matter; the price to be paid, the time of payment, delivery or performance; the quality involved; and the nature of the work to be performed. Other terms may be inferred. Vague terms may be cured.

The offer must also be conveyed to the offeree. Conveyance requires knowledge on the part of the offeree. Absent knowledge, there can be no offer.

Once a valid offer is made, it is up to the offeree to accept the offer before the offer terminates. The offer can terminate in a number of different ways. Let’s consider the termination of an offer to contract now.