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Firm Offer: A Comprehensive Guide to Its Legal Definition and Significance
Definition & Meaning
A firm offer is a written proposal made by a merchant that cannot be revoked, withdrawn, or changed for a specified period. This concept introduces a slight variation to the standard principles of contract law, where an offer is typically valid only until it is accepted. In the case of a firm offer, the offer remains binding for the time stated, ensuring that the offeree can rely on it without fear of sudden withdrawal.
Table of content
Legal Use & context
Firm offers are primarily used in commercial transactions involving the sale of goods. They are particularly relevant in contract law and business law, where merchants may want to assure buyers that their offer will remain open for a certain period. Users can utilize legal templates from US Legal Forms to create firm offers that comply with state laws and ensure they meet the necessary legal requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A local bakery offers to sell 100 custom cakes to a wedding planner for a price of $2,000. The bakery provides a signed written document stating that the offer will remain valid for 30 days. During this time, the wedding planner can accept the offer without worrying about the bakery changing the terms or withdrawing the offer.
Relevant laws & statutes
The definition of a firm offer is outlined in the Uniform Commercial Code (UCC), specifically under A.C.A. § 4-2-205 in Arkansas. This statute states that a firm offer made by a merchant in a signed writing is not revocable for lack of consideration during the stated time or a reasonable time, not exceeding three months.
State-by-state differences
State
Key Differences
Arkansas
Firm offers must be in writing and signed, with a maximum irrevocability period of three months.
California
Similar to Arkansas, but may have additional consumer protection laws affecting firm offers.
New York
Firm offers are recognized, but the interpretation may differ based on specific contract terms.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Firm Offer
An irrevocable offer made by a merchant for a specified time.
Cannot be revoked during the specified period.
Revocable Offer
An offer that can be withdrawn at any time before acceptance.
Can be revoked without notice until accepted.
Option Contract
A contract that gives one party the right to buy or sell an asset at a specified price within a certain period.
Requires consideration to keep the offer open.
Common misunderstandings
What to do if this term applies to you
If you receive or wish to make a firm offer, ensure it is documented in writing and signed. Clearly state the time period for which the offer is valid. Consider using templates from US Legal Forms to ensure compliance with legal standards. If the situation is complex, consulting a legal professional may be beneficial.
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