OFFERS

Question 1

UCC FIRM OFFER RULE: UNDER THE UCC , AN OFFER TO BUY OR SELL GOODS IS IRREVOCABLE IF:

Answer 1

1. THE OFFEROR IS A MERCHANT.
2. THERE IS AN ASSURANCE THAT THE OFER IS TO REMAIN OPEN; AND
3. THE ASSURANCE IS CONTAINED IN A SIGNED WRITING FROM THE OFFEROR.

UNDER THE UCC, NO CONSIDERATION BY THE OFFEREE IS NEEDED TO KEEP THE OFFER OPEN UNDER THE UCC FIRM OFFER RULE.

Question 2

HOW DOES A VALID OFFER COME ABOUT?

Answer 2

A VALID OFFER MUST REFLECT AN OBJECTIVE MANIFESTATION OF A WILLINGNESS BY THE OFFEROR TO ENTER INTO A CONTRACT THAT CREATES THE POWER OF ACCEPTANCE IN THE OFFEREE. IT IS A COMMUNICATION THAT GIVES THE POWER TO THE RECIPIENT TO ENTER INTO A CONTRACT BY ACCEPTING.

A STATEMENT IS AN OFFER ONLY IF THE PERSON TO WHOM IT IS COMMUNICATED COULD REASONABLY INTERPRET IT AS AN OFFER.

STATEMENT MUST EXPRESS THE PRESENT INTENT OF A PERSON TO BE LEGALLY BOUND TO A CONTRACT.

Question 3

WHAT IS AN OPTION CONTRACT? AND WHERE IS IT APPLICABBLE?

Answer 3

THE OPTION CONTRACT APPLIES TO CL CONTRACTS. IT IS AN INDEPENDENT PROMISE TO KEEP AN OFFER OPEN FOR A SPECIFIED PERIOD OF TIME. THAT PROMISE LIMITS THE OFFEROR’S POWER TO REVOKE THE OFFER UNTIL AFTER THE PERIUOD HAS EXPIRED. WHILE PRESERVING THE OFFEREE’S POWER TO ACCEPT.

IF THE OPTION IS A PROMISE NOT TO REVOKE AN OFFER TO ENTER A NEW CONTRACT, THE OFFEREE MUST GENERALLY GIVE SEPARATE CONSIDERATION FOR THE OPTION TO BE ENFORCEABLE. IF THE OPTION IS WITHIN AN EXISTING CONTRACT, NO SEPARATE CONSIDERATION IS REQUIRED.

THINK OPTION CONTRACT FOR CL - USUALLY NEED SEPARATE CONSIDERATION TO ENFORCE. UCC- FIRM OFFER RULE: WHERE OFFEROR IS A MERCHANT –NO ADDTL CONSIDERATION IS NEEDED TO KEEP THE OFFER OPEN HERE.

Question 3

WHAT IS AN OPTION CONTRACT? AND WHERE IS IT APPLICABBLE?

Answer 3

THE OPTION CONTRACT APPLIES TO CL CONTRACTS. IT IS AN INDEPENDENT PROMISE TO KEEP AN OFFER OPEN FOR A SPECIFIED PERIOD OF TIME. THAT PROMISE LIMITS THE OFFEROR’S POWER TO REVOKE THE OFFER UNTIL AFTER THE PERIUOD HAS EXPIRED. WHILE PRESERVING THE OFFEREE’S POWER TO ACCEPT.

IF THE OPTION IS A PROMISE NOT TO REVOKE AN OFFER TO ENTER A NEW CONTRACT, THE OFFEREE MUST GENERALLY GIVE SEPARATE CONSIDERATION FOR THE OPTION TO BE ENFORCEABLE. IF THE OPTION IS WITHIN AN EXISTING CONTRACT, NO SEPARATE CONSIDERATION IS REQUIRED.

THINK OPTION CONTRACT FOR CL - USUALLY NEED SEPARATE CONSIDERATION TO ENFORCE. UCC- FIRM OFFER RULE: WHERE OFFEROR IS A MERCHANT –NO ADDTL CONSIDERATION IS NEEDED TO KEEP THE OFFER OPEN HERE.