Two common exceptions are the option and the uccs

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: epted. It may not be very nice of Emily, but it is legal, and the offer has terminated. But there are some exceptions to this general rule—in other words, some situations where the offeror cannot terminate, even though the offer has not yet been accepted. Two common exceptions are the option and the UCC’s firm offer. Options exist when the offeree has given the offeror consideration to keep that offer open for a period. Suppose in the example above, Terrell wants to make sure he has until Friday noon to accept. He can pay Emily $10 for an option. This means in exchange for the money, Emily is giving up her right to revoke. If she now changes her mind on Thursday, Terrell can just ignore the phone call. If he accepts by calling Emily on Friday morning and saying “I’ll take that bike!” they will have a contract. Note that Emily is not getting a down payment with that $10. Terrell still has to pay the full $100 for the bike if he accepts, and if he declines he will not get the $10 back. In a down payment situation, a contract has already been made. rog80328_04_c04_062-088.indd 71 10/26/12 5:42 PM CHAPTER 4 Section 4.2 The Offer The UCC has a special rule when merchants are offering to sell goods. Under Section 2-205, if a merchant makes an offer in a signed writing, giving assurance that the offer will stay open, it is a firm offer that she cannot revoke. However, the time period cannot exceed three months (if the offer states it is open for six months, the UCC automatically shrinks it down to three months). Some examples: Example 4.12. ABC Inc. sends the following letter to Courtney: “We will sell you the Futura laptop with premium software loaded for $450. This offer is good until January 15.” The letter is signed by Andy Andrews, VicePresident. This is a firm offer. Example 4.13. ABC Inc. calls Courtney with the same offer. This is not a firm offer, because it was oral. Example 4.14. ABC Inc. offers in a signed letter to service Courtney’s company’s computers on...
View Full Document

This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

Ask a homework question - tutors are online