Contracts/Firm offer: Difference between revisions

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A firm offer is an irrevocable offer made by a merchant. As a general rule, all offers are revocable at any time prior to acceptance, even those offers that purport to be irrevocable on their face. An exception in the United States is the merchants firm offer rule set out in Uniform Commercial Code - § 2-205, which states that an offer is firm and irrevocable if it is an offer to buy or sell goods made by a merchant and it is in writing and signed.^[1]

An offer by a merchant to buy or sell goods in a signed record that by its terms gives assurance that it will be held open for a certain period or until a certain time is not revocable for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months. Any such term of assurance in a form supplied by the offeree must be separately signed by the offeror.

However, even when the period of irrevocability expires, the offer may still remain open until revoked or rejected according to the general rules regarding termination of an offer.

See also

• Uniform Commercial Code
• United Nations Convention on Contracts for the International Sale of Goods
• Option (finance)

References