Question

Mike went with his girlfriend to Bill's Furniture Store to purchase a living room set. When he found one that he liked, he told the salesperson (Jim ) that he required time to check his finances to make the purchase. Jim advised that "these units are going fast” but he would hold the “Royal Prince” living room set for him for ten days at a cost of $2,500 and he wrote the name of the unit, the cost and time frame on his business card and gave it to Mike. Nine days later, Mike returned and discovered that the “Royal Prince" set was sold and no other “Royal Prince” units were available. When Mike demanded that the store honor the previous offer, Jim laughed and said: "what the heck are you talking about; you had your chance to make the purchase and you blew it. Go purchase a comparable model at twice the price from someone else!”

Question: Mike consults you about his rights, if any, under the Universal Comercial Code. Must Mike look elsewhere?

Answer 1

As the contract is for sale of goods and is for a value exceeding $ 500, it falls within the purview of the Universal Commercial Code.

As per Section 2 -204 of the UCC, an offer by a merchant to buy or sell goods is an authenticated record which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months.

It is essential that there must be authenticated record of the firm offer on a tangible medium.

The new proposed UCC firm offer rule applies only if the offer record by its terms gives assurance that it will be held open for a period of time.

In the given situation, there is an assurance by Jim ( authorized representative of the store) on his business card ( tangible medium ) to keep the offer open for 10 days. Hence the offer, as per Section 2-204 is not revocable during the said period of 10 days. But when Mike returns after 9 days, he found that the item had been sold.

As the offer was not revocable during the period of 10 days, Bill's Furniture Store has clearly violated the relevant provisions of UCC.

Therefore, Mike can file a suit against the merchant for specific performance, and he need not look elsewhere for the same product. If Bill's Furniture Store is unable to supply, it has to compensate Mike for his loss.