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Valparaiso Univ. Law School

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Monday, December 9, 2013

FIRM OFFERS or firm offers

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Like others writing or reading this blog, my students are currently toiling away on their final exam. This means the last several days have been filled with questions. Sometimes the questions are so good I think the questioner should be teaching the course and not me. On the other hand, sometimes the questions are so worrisome that I wonder whether or not I have actually been teaching anything at all. One of my favorite sources of questions is 2-205 of the Code. In the context of essay questions I have presented all manner of issues based on 2-205. Are initials sufficient as a signature? (The Comments say yes.) What constitutes an assurance? What is a reasonable time? When I enter "2-205" into westlaw I am surprised at how few cases seem to turn on a 2-205 question.

Most of us have probably asked a question based on something like this. "Please let me know whether you accept within 7 days." Is that an assurance? If not, it's not a firm offer. Or is it? Suppose it is "I will hold the offer open for you. Please led my know your answer within seven days." How long is the offer open? Seven days or even longer if that is reasonable? And what does reasonable depend on? Should the reasonable offeree [btw is there an official correct spelling of offeree?] really expect the offer to be available on day 10.

And there are the questions dealing with a firm offer that is rejected or when there is a counter offer. Does it matter if the offeree has relied on the rejection? After all, the firm offer is a very thin concept and mere limits the rationale for a revocation. Which raises the question what are the other rationales for revocation?

If we fall back to common law answers what we know, or seem to know, is that firm offers can be open for longer than the time stated, although they become "soft" after that time, and if rejected or met with a counteroffer, can end before the time stated.

On the other hand, if the drafters only meant to take the consideration requirement out of option contracts (which the Restatement almost does), are these answers right?

2-205 is like a box of choclates.

Jeff "Jake" Harrison

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