UCC §2-205 Firm Offer Flashcards

Study Notes

UCC 2-205(1) establishes that a signed offer by a merchant to buy/sell goods is irrevocable for lack of consideration if it assures that it will remain open.
UCC 2-205(2) specifies that the offer must be held open for a reasonable time, but cannot exceed three months.
UCC 2-205(3) requires that any assurance term on a form provided by the offeree be signed by the offeror.

General Rule Merchant: An individual engaged in the trade of goods of a specific kind.
Business Practice Merchant: A person who presents themselves as possessing knowledge or skills relevant to the goods involved in the transaction through their occupation.
Merchant by Attribution: Refers to individuals whose knowledge or skills can be attributed due to their employment of agents or brokers with expertise in the relevant trade.

Goods encompass all movable items identified for a sale contract.
Specific categories include unborn young of animals, growing crops, and things attached to real property as defined within the section regarding goods.

Signed: Refers to any symbol executed with the intent to accept or adopt a writing.
Writing: Encompasses printed text, typewritten documents, or any other tangible representation of information.
Gives Assurance: Indicates that the offer is firm and remains open for a specified duration, establishing an option contract.
Does Not Give Assurance: A phrase such as "we are pleased to offer goods" does not constitute an assurance of an open offer.

The offeror must be a merchant; otherwise, the purpose behind holding the option open is unclear.
To extend a firm offer beyond three months, the parties can either renew the firm offer or establish a traditional option contract.

The approach to revocation of an offer after the specified time period is dependent on jurisdictional law. It's advisable to integrate terms in the offer clarifying the status after expiration.