Final answer:
An offer must have clear terms, intent to create a legal agreement, and must be communicated to the offeree.
Step-by-step explanation:
In business, an offer refers to a proposal made by one party to another, expressing the intention to enter into a contractual agreement. To be valid, an offer must meet three requirements:
- Clear and definite terms: The offer must have specific and unambiguous terms, including the identification of the parties involved, the subject matter, and the terms of acceptance.
- Intent to create legal relations: The offer must indicate an intention to create a legally binding agreement between the parties.
- Communication: The offer must be communicated to the offeree, either directly or through a recognized mode of communication.
For example, if a business owner offers to sell a product to a customer at a specific price and communicates this offer to the customer, the three requirements for a valid offer are met.