In a contract, what does the term 'offer' refer to?

In contract law, the term 'offer' refers to a proposal made by one party to another with the intent to create a legal obligation upon acceptance. The correct answer highlights that an 'offer' is a proposal for mutual assent, meaning that it is an expression of willingness to enter into a contract on certain terms. This proposal invites the other party to agree to those terms, which, if accepted, would result in a legally binding agreement.

The essence of an offer lies in its ability to clearly define the terms and conditions under which the offering party is willing to be bound, thus laying the groundwork for the formation of a contract. The significance of mutual assent is that both parties must agree to the same terms for a contract to be formed.

In contrast, other options such as an invitation to negotiate do not constitute a formal offer, as they merely express a willingness to discuss terms without binding one party to any obligations. A promise to perform implies a commitment already made but does not define the initial proposal stage where the offer is made. Similarly, an executed agreement refers to a contract that has been completed and is no longer in the negotiation or offer phase. Therefore, understanding an offer as a proposal for mutual assent is crucial in recognizing how contracts are initiated and