Legal Definitions - standing offer

A standing offer is a continuous proposal made by one party to another to provide goods or services at a predetermined price or under specified terms, usually for a defined period. It is not a contract in itself until the other party accepts a specific part of the offer by placing an order or requesting a particular service. Each time an order is placed or a service is requested under the terms of the standing offer, a separate, individual contract is formed. This arrangement is commonly used for recurring needs, allowing the buyer to procure items or services efficiently without negotiating a new contract each time.

• Example 1: Office Supply Agreement for a School District

  A large school district frequently needs to purchase various office supplies, such as paper, pens, and printer cartridges, for its numerous schools throughout the academic year. Instead of negotiating a new purchase order every time a school needs supplies, the district enters into a standing offer agreement with a major stationery supplier. The supplier agrees to provide a catalog of specific items at pre-negotiated prices for the next 12 months.

  Explanation: This is a standing offer because the school district is not obligated to buy a minimum quantity of supplies upfront. However, each time an individual school places an order for paper or pens from that supplier, a new, individual contract is formed based on the pre-agreed terms and prices of the standing offer. This streamlines the procurement process for their ongoing needs.

• Example 2: On-Call Maintenance Services for a Hotel Chain

  A national hotel chain requires reliable, on-demand maintenance services for its properties, covering everything from plumbing repairs to electrical issues. The exact frequency and type of repairs needed can vary greatly by location and time. To ensure quick service, the hotel chain establishes a standing offer with a facilities management company. The company agrees to provide various maintenance services at a fixed hourly rate or per-job fee for a three-year period, whenever a hotel property requests assistance.

  Explanation: The facilities management company's agreement is a standing offer. The hotel chain is not committed to a minimum number of service calls or hours. Instead, whenever a hotel property experiences a maintenance issue and calls the company for assistance under the terms of the agreement, that specific request creates a binding contract for that particular service, leveraging the pre-negotiated rates and conditions.

• Example 3: Raw Material Supply for a Food Manufacturer

  A company that manufactures snack foods requires a consistent supply of a specific type of flour. Their production schedule fluctuates, so they cannot commit to a fixed monthly quantity. They establish a standing offer with a flour mill. The mill agrees to supply the specified flour at a set price per ton, delivered to the manufacturer's factory as needed, for a period of two years.

  Explanation: This arrangement constitutes a standing offer because the food manufacturer does not commit to buying a fixed amount of flour upfront. Instead, as their production demands require, the manufacturer places an order with the flour mill, and each individual order forms a separate contract under the terms of the standing offer. This ensures a reliable supply of raw material at a predictable cost without needing to negotiate every single delivery.