If a person makes an invitation to make an offer/proposal, the other person makes an offer/proposal in response. The offer/proposal may or may not be accepted.
Example: – Tender notice is an invitation to make a proposal/offer. Then the response to a tender notice is an offer and can be in two ways:-
- A definite offer: When a tender is submitted, in response to an invitation for supply of goods and services in specified quantities, in a specific and definite manner, it is a definite offer.
- A standing offer: sometimes a tender is submitted, in response to an invitation for supply of goods and services in a continuous way over a period of time, such an offer is said to be standing (or) continuous offer.
As soon an order is made a contract is created