What is a proposal to make a contract called?

A proposal to make a contract is referred to as an offer. In contract law, an offer is a clear and definite statement of the terms on which one party is willing to enter into a contract with another party. It sets forth the conditions that need to be met for an agreement to be formed, indicating the intention of the offeror to be bound by those terms if the offeree accepts.

The significance of the offer lies in its function as the starting point for contract negotiation; it expresses a willingness to enter into a legally enforceable agreement and invites the other party to accept those terms. This is crucial for establishing the mutual consent necessary for a contract.

While an agreement is the broad term that includes all elements of a contract, it does not specifically indicate the proposal stage. Acceptance is the process by which the offeree agrees to the terms set out in the offer, thereby creating the contract. A term sheet, on the other hand, is usually a non-binding document that outlines the main points of a deal but does not have the legal force of a formal contract. Hence, identifying the proposal stage correctly as an offer is key to understanding contract formation.