Legal Definitions - cross-offer

A cross-offer is a concept in contract law that arises when two parties, without knowledge of the other's intent, simultaneously make identical offers to one another. In such a situation, because neither party has actually accepted the other's offer, but rather made their own, a binding contract is not formed at that moment.

Here are a few examples to illustrate this concept:

• Imagine a scenario involving real estate. Ms. Rodriguez is interested in purchasing a specific commercial property owned by Mr. Kim. She sends him a formal written offer to buy the property for $1.5 million. Unbeknownst to Ms. Rodriguez, Mr. Kim, at the very same time, decides he wants to sell that exact property and sends Ms. Rodriguez a formal written offer to sell it to her for $1.5 million. Both parties have made identical offers for the same property to each other, but neither has accepted the other's offer. This constitutes a cross-offer, and no contract is formed until one party accepts the other's offer.

• Consider two businesses, "Tech Solutions Inc." and "Global Components Ltd." Tech Solutions needs a specific type of microchip and sends an email to Global Components offering to purchase 5,000 units at $10 per chip. Simultaneously, and without any prior communication about Tech Solutions' intent, Global Components sends an email to Tech Solutions offering to sell them 5,000 units of that exact microchip at $10 per chip. Since both companies made the same offer to each other independently, rather than one accepting the other's proposal, this is a cross-offer. For a contract to be established, one company would need to explicitly accept the other's offer after becoming aware of it.

• Let's look at a unique item sale. Dr. Anya Sharma owns a rare first edition book. Mr. Ben Carter, a fellow collector, has long admired this book. Dr. Sharma decides to sell the book and mails a letter to Mr. Carter offering to sell it to him for $5,000. Coincidentally, on the very same day, Mr. Carter mails a letter to Dr. Sharma offering to buy that exact first edition book from her for $5,000. When their letters cross in the mail, they have made cross-offers. No contract is formed at this point because each party made an offer, but neither has accepted the other's identical offer. An acceptance would be required to create a binding agreement.