Offering: Overview, definition, and example
What is an offering?
An offering refers to a product, service, or financial instrument made available for sale or investment under a contract or agreement. Offerings are commonly associated with business transactions, such as the sale of goods or services, or with financial activities, such as issuing shares, bonds, or other securities to investors.
For example, a business might have a product offering that includes specific items or packages tailored to meet customer needs, or a company may issue a stock offering to raise capital.
Why is an offering important?
An offering is important because it defines what is being provided in a transaction, ensuring clarity and alignment between the parties. It sets expectations regarding the scope, features, and value of the product, service, or financial instrument being offered. For SMBs, clearly defining an offering is critical for marketing, sales, and operational planning, as well as for building trust with customers and investors.
Including a detailed offering description in agreements or contracts minimizes the risk of disputes, supports transparency, and helps parties fully understand their rights and obligations.
Understanding an offering through an example
Imagine an SMB launches a subscription-based service offering for IT support. The offering includes 24/7 technical support, monthly system checks, and emergency assistance for a fixed monthly fee. The service offering is detailed in the contract to ensure customers understand what is included and what is not.
In another scenario, a startup issues a public offering of shares to raise funds for expansion. The offering specifies the number of shares available, the price per share, and any associated rights or restrictions for investors. This ensures potential investors have all the information needed to make an informed decision.
An example of an offering clause
Here’s how an offering clause might appear in a contract:
“The Provider agrees to deliver the Offering as described in Schedule A of this Agreement, which includes [specific products, services, or features]. Any changes to the Offering must be agreed upon in writing by both parties. The Offering shall be provided in accordance with the terms and conditions outlined in this Agreement.”
Conclusion
An offering is the cornerstone of any transaction, defining the product, service, or financial instrument being provided. For SMBs, clearly defining the offering ensures transparency, sets accurate expectations, and builds trust with customers or investors. A well-drafted offering clause helps avoid misunderstandings, ensures both parties are aligned, and supports smooth business operations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.