Legal Definitions - bid

A bid is a formal offer or proposal to perform work, supply goods or services, or purchase an item at a specified price. It represents a commitment by the party making the bid to undertake the stated action under the proposed terms, should their offer be accepted. Until it is formally accepted by the other party, a bid is generally not a binding contract and does not create immediate legal obligations.

• Example 1: Construction Project

  A local government agency announces plans to build a new community recreation center and invites construction companies to submit proposals. Several companies respond with detailed documents outlining their proposed designs, construction methods, project timelines, and the total cost they would charge to complete the center.

  Explanation: Each proposal submitted by a construction company is a "bid." It is an offer to perform specific work (building the recreation center) for a specified price. The government agency will review these bids and, upon accepting one, will form a binding contract with the chosen company.

• Example 2: Government Procurement of Services

  A state university needs to hire a catering service for its annual graduation ceremony. They issue a request for proposals, and several catering companies submit offers detailing their menu options, staffing plans, equipment needs, and the per-person cost for their services.

  Explanation: Each catering company's submission is a "bid." They are offering to provide a service (catering) at a specified price per person. The university will evaluate these bids based on quality, experience, and cost before selecting a vendor and formally accepting their offer.

• Example 3: Online Auction

  During an online auction for a rare first-edition book, a collector enters a maximum amount they are willing to pay for the item, which is then automatically increased in small increments against other participants' offers until their maximum is reached or they are outbid.

  Explanation: The collector's offer of a maximum price is a "bid." They are stating the specific price they are ready to pay to purchase the book. If their bid is the highest when the auction concludes and meets any reserve price, it will be accepted, and they will be obligated to buy the book.