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3 Cards in this Set
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UCC-205 (Firm Offers)
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An offer by a merchant to buy or sale goods in a signed record that 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 the period of irrevocability exceed three months. Any such term of assurance in a form supplied by the offeree must be separately signed by the offeror (this is to make sure the offeror is aware of it)
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Reva, a farmer wrote and signed a note that stated: "It is recorded that Reva Cation is willing to sell her tractor to Harv Ester for $5,000 cash. If Harv wishes to buy it, he must notify Reva in writing by 5pm on May 3, 2003. Reva undertakes not to sell the property to anyone else or to withdraw this offer before that date."
On May 2, Reva sold the tractor to someone else and notified Harv that she withdrew her offer. Can Harv refuse to recognize the revocation and accept the offer, thereby creating a binding contract? |
At common law, Reva's promise not to revoke would not bind her, and her revocation would be effective. However, this is a sale of goods, so if the requirements of UCC § 2-205 are satisfied, the promise is binding as a firm offer despite the lack of consideration.
§2-205 only applies if the offer is a merchant. (it is not necessary for the offeree to be a merchant as well) If Reva does satisfy the definition of a merchant (by her occupation she hold herself out as having knowledge or skill in relation to the goods or the transaction), the offer is binding on her as a firm offer until its stated expiry time of 5pm on May 3, because it meets other requirements of § 2-205: It is in writing (a record) signed by her, and it gives assurance that it will be held open for a stated time, not exceeding three months. (see p. 122, E&E) |
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§ 2-207(2)
(p.135, E&E) |
1) Additional terms do not become part of the contract unless both parties are merchants. (if either of them is not a merchant, the proposals do not become part of the K).
2) The terms does not enter the K if it materially alters it. (a proposed alteration in an acceptance is material and does not enter the K if it would result in "surprise or hardship" to the other party. 3) The term does not enter the K if the offer limits acceptance to its terms. (even if the parties are merchants ans the term is not material, it does not become part of the K if there is language in the offer expressly limiting acceptance to its terms. 4) The terms does not enter the K if the offeror objects. |
