Ways In Which An Offer Can Be Terminated

All activities to regulate the exchange of value may be referred to as commercial transactions. It is an agreement between two or more parties to exchange goods and services, or anything of value for another valuable (money). Such agreements are usually bound by the Law. But, before an agreement between two or more parties can be recognized as binding on the parties under the law (contract),  it must have the element of offer, acceptance, intention to create legal relations, consideration, terms of the contract and privity.

Here, I will be focusing on one of these elements. Which is an offer and how it is terminated. An offer is the expression of an intention or a promise made by one party (offeror) to another (offeree) with the intention that it shall become legally binding on them as soon as the other party (offeree) accepts it. This is why all commercial transactions in one way or the other, involve an offer and acceptance. For example, if a construction company offers to pay a certain amount of money to a cement making company in exchange for some bags of cement, and the cement company accepts the offer. It means the both companies have engaged in commercial transaction.

For a promise to be legally recognized as an offer,

• It must be definite/specific i.e a thing of value to be given in exchange for another or an act to be carried out. Both based on the acceptance of some terms or performance of another act.


• The person making the offer must be liable to be bound by the law once the offer is accepted. Whether it is the offeror himself or his agent.


• It must be communicated to the offeree.

An offer may be communicated verbally (word of mouth) or in writing. But, it only becomes effective when the offeree has knowledge about it. Since, a person can not accept something that they don't know of, the other party must have knowledge of the offer before acceptance.

Termination of offer means to put the offer to an end. That is, no further action can be taken over the offer. The following are conditions under commercial law whereby a contract can be terminated:

By Rejection

An offer is terminated when the offeree expressly rejects it. For instance, if I offer to pay two thousand naira ($2,000) for a piece of cloth and the cloth seller insists that the price of the cloth is two thousand, five hundred naira ($2,500). It means my offer has been rejected and therefore is terminated. Except I make a fresh offer and the cloth seller accepts it. That is when the transaction is further acted upon. Rejection of an offer happens in two ways. Either by express rejection i.e saying no to the offer or by a counter offer i.e giving your own terms of being a party to the agreement.

Death Of Either Party Before Acceptance

The death of either of the party (offeror or offeree) before acceptance, terminates the offer. The death of the offeror must be communicated to the offeree before the offer can be terminated. But, the death of the offeree before acceptance of the offer, even without the offeror having knowledge of it, terminates the offer automatically.

By Revocation

A person that makes an offer may decide to revoke it. That is to reverse or withdraw the offer. The offeror can still revoke the offer even if there was a time limit attached to the offer, which has not elapsed.

By The Lapse Of Time

If the time stipulated by the person making an offer (offeror) elapses, the offer ceases to exist. The offeror can decide to reopen the offer. But in the first instance that the stipulated times elapses, the offer is terminated.

Based On The Occurrence Of A Certain Condition

An offer can also be terminated based on the occurrence of a certain condition that has been pre-included in the terms of the offer. That is, if the condition included in the terms of the offer should occur before acceptance, then the offer will be terminated. For example, a person(client) made an offer to buy a particular item from a seller. Informing him that he (client) has already bargained with another seller who he (client) regularly buys the product from. But, the person does not have the commodity he (client) requested for. That, the other seller has promised to call him as soon as he gets back from the market where he went to get the product. That, if the other seller should call him, to tell him that he has the product, the offer made to the first seller is terminated. If the first seller agrees to the terms of the offer of the client, and the other seller calls him, the offer is terminated immediately.

Loss Of Legal Capacity By Either Party

If any one of the party (offeror or offeree) loses the capacity to enter into legal relations before the offer is accepted, either by means of insanity, criminal acts or for whatever reasons, the offer ceases to exist.

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