The offer is the first step in establishing a contract between two parties. This stage outlines the actual terms of the contract. The party making the offer generally must have present intent to enter into the contract. This means that if a reasonable person understands the offer to be a joke, the contract can’t be valid. However, if the offering party claims that the offer was only a joke, but a reasonable person does not understand it to be a joke, the offer can still be considered valid. This is known as the reasonable person standard and is a common theme throughout contract law.
Once an offer has been made, it does not remain valid forever. In many situations, the party making the offer has the right to revoke the offer after some amount of time has elapsed. Whether this is specified by time-limitation language in the offer or is simply permissible before the other party has accepted the offer relies heavily on the circumstances surrounding the contract.