Irrevocable Offers

Question 1

What are the three types of offers that are deemed irrevocable?

Answer 1

Offers that are irrevocable include:

1) option contracts (when consideration is given for a promise to keep an offer open);
2) merchant’s firm offer; AND
3) offers that were relied on to the offeree’s detriment.

Question 2

What is a merchant’s firm offer?

Answer 2

A merchant’s firm offer is:

1) an offer to buy or sell goods;
2) by a merchant (a person who deals in goods of the kind);
3) in a signed writing;
4) which states that the offer will be held open and is not revocable during the time stated (or if no time is state for a reasonable time), but not to exceed three months; AND
5) that the assurance to keep the offer open must be separately signed by the offeror if the form is supplied by the offeree (such as initialing the specific paragraph). A merchant’s firm offer is enorceable without consideration.