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Contracts/Firm offer
A firm offer is an offer defined by UCC 2-205 of the Uniform Commercial Code of the United States. It holds merchants to a high standard of care in making an offer by certain offers irrevocable for a certain length 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.
UCC 2-205 states that
If an offer has all the following characteristics, it is considered a firm offer if...
- It is an offer to buy or sell goods
- It is made by a merchant
- It is a signed writing
- It gives assurances
After these requirements have been met, there is a limit amount of time that the offer remains irrecovable, namely the amount of time stated by the offer, and If no time period is specified, 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
