Irrevocable Offers

Question 1

What are the five types of Irrevocable Offers?

Answer 1

1. Option Contracts

An option is a contract that holds an offer open for a specified period of time.
Requirements: An option must be supported by consideration; otherwise, the offeror may revoke the offer.
Effect: The power of acceptance under an option contract is not terminated by rejection, counter-offer, or revocation

2. Conditional Contracts

Two parties enter a bargain where they agree that:
● A contract will form according to the terms of an offer
● If and only if a condition (i.e., an event) occurs. Ex: If they spent more
than $3,000 on a mattress from his Gallery Furniture store during a
certain period of time, he would refund them if the Houston Astros
won the World Series.

3. Promissory Estoppel

A promise which the promisor should reasonably expect to induce
action or forbearance on the part of the promisee or a third person and
which does induce such action or forbearance is binding if injustice can
be avoided only by enforcement of the promise. The remedy granted
for breach may be limited as justice requires.

4. Part Performance of a Unilateral Contract

Where an offer invites an offeree to accept by rendering a
performance and does not invite a promissory acceptance, an
option contract is created when the offeree tenders or begins the
invited performance or tenders a beginning of it.
● The offeror’s duty of performance under any option contract so
created is conditional on completion or tender of the invited
performance in accordance with the terms of the offer.

5. UCC’s Merchant’s Firm Offer

Elements (will need to define all of these in detail)
● A merchant who makes an offer to buy/sell goods
● In a signed
● Writing
● And gives assurance that offer
will be held open
● For a stated time or a
reasonable time not to exceed
three months

Question 2

How long does an option contract stay open?

Answer 2

as long as the option says

Question 3

Can you revoke a conditional contract?

Answer 3

Even though you don’t have to do anything prior to the condition being fulfilled, you still can’t revoke

Question 4

Can you revoke a unilateral contract?

Answer 4

Beginning the invited performance creates a hypothetical option contract, giving reasonable time to complete the performance

Question 5

UCC: can you revoke a merchant’s firm offer?

Answer 5

merchant’s signed, written
offer that promises to hold an offer open for a stated
period of time remains open for that time
❏ no consideration required
❏ no time stated = reasonable time
❏ max time: three months