Who is the offeree?
What is the legal definition of an offeree?
How does it work in contract law and what are some examples?
In this article, we will break down the notion of “offeree” so you know all there is to know about it!
We will define offeree, look at the offeree meaning, what is the significance of being an offeree in contract law, the difference between an offeree vs offeror, examples and more.
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An offeree is a person or legal entity who receives an offer to enter into a legally binding contract.
Every jurisdiction may have its own specific legal requirements to define an offeree under the applicable contract laws.
An offeree though is generally (1) a person or entity who receives an offer containing the essential elements for the formation of a contract and (2) who has the ability to accept or reject the offer.
Offeree legal definition
What is the legal definition of an offeree?
According to the Merriam-Webster dictionary, an offeree is defined as:
one to whom an offer is made
What is notable with this definition of offeree is that it is a person who receives an offer from someone interested in forming a contract with the offeree.
From a legal sense, the offeree is not only the person who receives an offer but it is also the person who has the ability to accept the offer (thereby forming a binding contract) or reject it.
You can find the following words or phrases that have the same or similar meaning or as synonyms to the term offeree:
- Recipient of an offer
- Offer recipient
- Contract accepting party
To pronounce offeree, you say “off-err-eee”.
Offeree vs offeror
What is the difference between an offeree and offeror?
Typically, contracts are signed between two or more parties.
However, you need at least one offeror and one offeree.
One party must make an offer to contract (the offeror) and another party (the offeree) has the ability to agree or reject the offer.
A contract is formed when an offeree accepts the offer made to him or her
Being the receiving party of an offer (an offeree) has important legal consequences.
The offeree is the one who seals the deal (accepts the offer) or rejects it (rejects the offer).
In other words, the offeror defines the terms and while the offeree moves the proposal from the status of an “offer” to a “legal agreement”.
Offeree in real estate
The most common example to explain who is an offeree and his or her role in contract formation is by looking at the offeree definition in real estate.
To purchase a property, the potential buyer must get the ball rolling by making an offer to purchase to the property owner.
Typically, the buyer (the offeror) will define the following elements in his or her offer:
- Identification of the property
- Proposed purchase price
- Closing date of the transaction
- Period of time that the offer is valid (generally a few days)
Let’s assume there are no other conditions to the offer.
Once the offer is submitted to the property owner (the offeree), he or she will have the ability to accept or reject the offer.
If the terms of the offer are satisfactory, the property owner will agree to sell the house and therefore conclude the real estate transaction.
The offeree may choose not to agree with the terms of the offer and decide to make a counter-offer.
In this case, the potential buyer (who was initially the offeror) receives a counter-offer (becoming the new offeree) and will have the ability to accept or reject the counter-offer.
Offeree in business law
In business, there are millions of contracts signed around the world on a daily basis.
Whether you are in real estate or in business, the role of the offeree is the same.
The offeree is the party whose acceptance legally forms a legally binding contract.
In commercial contracts though, most of the time, the contracts are duly negotiated by the parties and are in writing.
Typically, the parties will exchange many rounds of contract drafts until they reach a point where both parties are in agreement with the contract wording.
Commercial contracts are complex and it may not be as easy to identify the offeree and offeror
Considering there may be many stakeholders involved in approving or even signing the contract, commercial contracts are formed when both parties exchange their agreement to sign a final draft and proceed to the execution of the contract.
When a party signs the draft contract and submits it to the other, you can consider that party to be the offeror and the receiving party to be the offeree.
Considering commercial contracts may be highly complex and involve many people, it may not be as easy to define who was the offeror and the offeree.
In the event of a dispute, the court will need to assess the facts surrounding the contract negotiations and assess if at any point in time a party could have been qualified as an offeror or offeree.
What is an offeree
Is an offeree a person who makes an offer or receives one?
Who is the offeree?
An offeree is a person who receives an offer from someone else.
In other words, when a person or entity makes an offer or proposal to enter into a contract, that person is considered to be an offeree.
What is the general rule of acceptance in contract law
To form a valid and legally binding agreement, you must have the “meeting of the minds” or “offer and acceptance”.
In contract law, the rule of acceptance is as follows:
- There must be an offer made by a person
- The parties must have consideration in entering into the contract
- The offeror and offeree must have a legal capacity to enter into a contract
- The purpose or object of the contract must be legal
- There must be acceptance of the offer
When an offer is made, typically it should observe all the above elements except for the “acceptance” as that’s something an offeree will have control over.
If the offeree accepts the offer, a contract is formed.
If the offeree rejects the offer, then:
- The offeror can make a new offer
- The offeree can make a counter-offer (becoming an offeror)
- The parties can walk away from the negotiations
What is the significance of being an offeree in contract law
An offeree is a person who has the ability to accept an offer made by the offeror in such a way as to change the status of the “offer” to a “contract”.
The moment the offeree accepts the offer, a contract is formed.
That’s significant from a legal perspective as the contract formation date and time represents the moment the parties become bound by law to comply with the terms and conditions of the contract.
What is the difference between offeror and offeree
In contract law, being designated as an offeror or offeree has an important legal consequence.
In contract law, an offeror is a person who makes an offer and controls the content of the offer being made.
When an offer is made, it is made by the offeror with the intention to be legally bound by it in a contract if the offeree accepts it.
An offeree, on the other hand, is the person or entity who receives the offer and who has the choice to accept it or to refuse it.
If the offeree accepts the offer, then both offeree and offeror will end up in a legally binding contract.
Can there be many offerees?
Yes, a contract requires at least two parties but there can be more.
As a result, an offer can be made to more than one offeree requiring all the offerees to accept the terms and conditions.
If a real estate property is owned by two individuals, a potential buyer must make an offer to both co-owners (two offerees in this case) to purchase the property.
When both offerees accept the offer, you have a deal.
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