Contracts/Firm offer
A firm offer is an offer defined by the [UCC] §2-205. It holds 'Merchants' to a higher standard of care in making an offer by certain offers irrevocable for a certain of time. It in essence creates an option contract without any consideration. It reflects a change from traditional common law that treated all parties to a contract the same way, to a more modern view that holds certain parties to a higher standard of behavior.
The UCC 2-205 states that
If an offer has all the following characteristics, it is considered a FIRM offer under UCC 2-205...
- 1) It's an offer to buy or sell goods
- 2) It's made by a merchant
- 3) In a signed Writing
- 4) Which gives assurances
After these requirements have been met, there's a limit amount of time that the offer remains irrecovable.
- 1) The amount of time stated by the offer
- 2) If no time period was stated, then for a reasonable period of time
In either case, the time period cannot exceed 3 months. If there is stated time period of 6 months, then the 3 month limit applies and the offer ceases to be legally enforceable after 3 months. If a reasonable time period would be longer than 3 months, then the limit still applies and terminates the offer's enforcibility after 3-months.
See also
