Question

Does at UCC § 2-205: Firm offer need to definite the price of the goods?

Answer 1

A ifirm ioffer iis ian ioffer ithat ihas ibeen ipromised ito ibe ileft iopen iin iwriting iand icannot ibe irevoked

When igoods iare isold, ia ifirm ioffer iis iconsidered ito ihave itaken iplace iwhen ithere ihas ibeen ia isigned ipromise ito ikeep ithe ioffer iopen iand ithe imerchant iinvolved iin ithe isale iqualifies ias ia imerchant iunder ithe iUniform iCommercial iCode. iIn imany icases, icustomers iwill irequest ia ifirm ioffer iso ithey ican ibe isure iof itheir ipricing iover ia iset iperiod iof itime. iMany imerchants ialso iask itheir isuppliers ifor ifirm ioffers.

Although ithere iare iseveral iadvantages ito ifirm ioffers, ithe irisk iis ithat ithe icircumstances imay ichange, imeaning ithat ithe ioriginal ioffer iwould ino ilonger ibe ireasonable. iFor iexample, ithe iraw imaterial icost imay iincrease ior iyour iinventory imay irun iout, imeaning iyou icannot isustain ithe iprice iyou ioriginally ioffered.

Firm ioffers iwill ionly ilast ifor ithe iamount iof itime ithat iis ilisted iin ithe ioffer. iShould ithe ioffer inot ispecify ia itime ilimit, ithe ioffer iwill iremain iopen ifor ithree imonths imaximum.

The iperson ireceiving ithe ioffer ihas ithe iright ito irequest ia ifirm iquotation, iand ithey imay ialso iask ithat ithe iperson imaking ithe ioffers isigns iconfirmation.

The iFirm iOffer iRule iin ithe iUniform iCommercial iCode ionly iapplies ito imerchants ithat isell igoods. iIf iyou iare ia imerchant ithat iis igoverned iby ithe iUCC, iit's iimportant ithat iyou iunderstand ithis irule. iMake isure iyou igain ia ifamiliarity iwith ithe ifine idetails iof ithis irule.

The iFirm iOffer iRule iapplies iin ia ivariety iof icircumstances iwhere ia itime iperiod ihas inot ibeen iexpressly istated:

1. There iis ian iexisting ioffer ito isell ior ipurchase igoods.

2. A isigned iagreement ikeeping ithe ioffer iopen iexists, ibut ithere iis ino istated itimeframe.

3. Both iparties iinvolved iin ithe ioffer iare imerchants iwho iare ifamiliar iwith ithe iprocess iof iselling iand ibuying igoods.

Any itime ia icontract iis idrafted ifor ithe ipurpose iof iselling igoods, ithe iFirm iOffer iRule imay ibe iapplicable. iAn iexample iof ithe ifirm ioffer irule icould ibe ia imerchant iagreeing ito isell ione ihundred iunits iof ia icertain igood iat ia ifixed iprice iof i$50 ifor ia iperiod iof i60 idays. iTime ilimits ion ifirm ioffers ican ibe iextended iby ioffering ia inew ioffer ior iagreeing ito ian ioption icontract.

Rules ifor iWriting ia iFirm iOffer

In icontracts ithat iare iregulated iby ithe iUCC, iall iparties iare irequired ito ibe imerchants. iThe imerchant ithat iis iselling ithe igoods iis iknown ias ithe ioffer ior. iOffers iwill iremain ivalid ifor ia iset iperiod iof itime. iThis itime iperiod ican ibe ieither iimplied ior iexpressly istated. iFor iexpress itime ilimits, ithe icontract ishould ilist ithe iamount iof itime iso ithe ibuyer iwill ihave ithe iinformation ithey ineed ito idecide iif ithey iwill iagree ito ithe icontract

You imust imeet ia ivariety iof iUCC irequirements iif iyou iwish ito iuse ian iimplied itime iperiod. iBoth iparties ialso ineed ito iconsider ihow imuch imoney iwill ibe iinvolved iin ithe ideal.

An ioffer iby ia imerchant ito ibuy ior isell igoods iin ia isigned iwriting iwhich iby iits iterms igives iassurance ithat iit iwill ibe iheld iopen iis inot irevocable, ifor ilack iof iconsideration, iduring ithe itime istated ior iif ino itime iis istated ifor ia ireasonable itime, ibut iin ino ievent imay isuch iperiod iof iirrevocability iexceed ithree imonths; ibut iany isuch iterm iof iassurance ion ia iform isupplied iby ithe iofferee imust ibe iseparately isigned iby ithe iofferor.

In ithe iUnited iStates, ian iexception iis ithe imerchant ifirm ioffer irule iset iout iin iUniform iCommercial iCode i- i§ i2-205, iwhich istates ithat ian ioffer iis ifirm iand iirrevocable iif iit iis ian ioffer ito ibuy ior isell igoods imade iby ia imerchant iand iit iis iin iwriting iand isigned iby ithe iofferor. iSuch ian ioffer iis iirrevocable ieven iin ithe iabsence iof iconsideration. iIf ino itime iis istated, iit iis iirrevocable ifor ia ireasonable itime, ibut iin ino ievent imay ia iperiod iof iirrevocability iexceed ithree imonths. iAny isuch iterm iof iassurance iin ia iform isupplied iby ithe iofferee imust ibe iseparately isigned iby ithe iofferor.

However, ieven iwhen ithe iperiod iof iirrevocability iexpires, ithe ioffer imay istill iremain iopen iuntil irevoked ior irejected iaccording ito ithe igeneral irules iregarding itermination iof ian ioffer.

The iUniform iCommercial iCode i(UCC), ifirst ipublished iin i1952, iis ione iof ia inumber iof iUniform iActs ithat ihave ibeen iestablished ias ilaw iwith ithe igoal iof iharmonizing ithe ilaws iof isales iand iother icommercial itransactions iacross ithe iUnited iStates ithrough iUCC iadoption iby iall i50 istates, ithe iDistrict iof iColumbia, iand ithe iTerritories iof ithe iUnited iStates.

While ilargely isuccessful iat iachieving ithis iambitious igoal, isome iU.S. ijurisdictions i(e.g., iLouisiana iand iPuerto iRico) ihave inot iadopted iall iof ithe iarticles icontained iin ithe iUCC, iwhile iother iU.S. ijurisdictions i(e.g., iAmerican iSamoa) ihave inot iadopted iany iarticles iin ithe iUCC. iAlso, iadoption iof ithe iUCC ioften ivaries ifrom ione iU.S. ijurisdiction ito ianother. iSometimes ithis ivariation iis idue ito ialternative ilanguage ifound iin ithe iofficial iUCC iitself. iAt iother itimes, iadoption iof idifferent irevisions ito ithe iofficial iUCC icontributes ito ifurther ivariation. iAdditionally, isome ijurisdictions ideviate ifrom ithe iofficial iUCC iby itailoring ithe ilanguage ito imeet itheir iunique ineeds iand ipreferences. iLastly, ieven iidentical ilanguage iadopted iby iany itwo iU.S. ijurisdictions imay inonetheless ibe isubject ito idifferent istatutory iinterpretations iby ieach ijurisdiction's icourts.