Firm Offer Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Firm Offer, written in plain English, along with examples of how it is used.
What is Firm Offer?
(n) A Firm Offer is an offer made to a person or entity agreeing to do any action or non-action on the acceptance of such offer, which cannot be revoked or withdrawn within the period specified in the offer.
History and Meaning of Firm Offer
A Firm Offer is an agreement in which an offeror promises to keep an offer open for a specific amount of time, during which it cannot be revoked. It is a binding and irrevocable offer made by a merchant to buy or sell goods, either now or in the future, that is guaranteed to remain open for a certain period of time. This type of offer is governed by the Uniform Commercial Code (UCC).
The concept of Firm Offer has its roots in contract law, more specifically, in the common law concept of an option contract. An option contract is a promise to keep an offer open for a certain period of time in exchange for consideration. The Uniform Commercial Code modified the common law concept of option contracts and created the concept of Firm Offer.
Examples of Firm Offer
Example 1: A merchant offers to sell 100 units of a product to a buyer at a fixed price of $1000. The offer states that the offer will remain open for five days. If the buyer accepts the offer within five days, the merchant must sell the product at the agreed-upon price.
Example 2: A manufacturer offers to sell raw materials to a company at a fixed price of $10,000. The offer states that the offer will remain open for two weeks. If the company accepts the offer within two weeks, the manufacturer must sell the raw materials at the agreed-upon price.
Example 3: A wholesaler offers to buy a certain quantity of goods from a supplier at a fixed price of $5000. The offer states that the offer will remain open for seven days. If the supplier accepts the offer within seven days, the wholesaler must buy the goods at the agreed-upon price.
Legal Terms Similar to Firm Offer
Option contract: An option contract is a promise to keep an offer open for a certain period of time in exchange for consideration.
Unilateral contract: A unilateral contract is a contract in which only one party makes a promise that must be fulfilled if a certain condition is met.
Bilateral contract: A bilateral contract is an agreement in which both parties make promises to do certain things.