Formation
The contract is governed by the UCC, so both parties must Merchants. The Offeror - the merchant who offers to sell goods - offers to sell goods to the buyer (offeror). This offer remains on the table for either an express or implied period of time. If express, the contract itself contains the amount of time the buyer has to make a decision. In order for the period of time to be implied, certain conditions must be met according to the UCC which will trigger a "gap-filler" provision (more below). There must also be adequate consideration - money - stated between both parties.
Implied Offer
Even if the offeror does not expressly state a period of time during which the offer cannot be revoked, the Firm Offer Rule will be deemed applicable if:
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An offer to buy or sell goods exists,
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There is a signed agreement that the offer will be open, but does not state the time frame during which the offer is open, and
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Both parties are Merchants, and therefore more familiar than the average layperson with buying and selling goods.
If these conditions are met, the UCC mandates that the offer stay open for a period of 3 months (90 days).
Drafting Contracts for Goods
In drafting a contract for the sale of goods, be aware that the Firm Offer Rule could apply. You can use our template for a contract for the sale of goods to help you. Additionally, it is always advisable to have an attorney look over any draft agreement you wish to submit to another party.
Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
