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27. Did the lawyer's April 15 fax constitute an effective acceptance of the retailer's offer at the prices specified in the catalog?
Assume that no other correspondence passed between the retailer and the lawyer until the following April 15 (four months later), when the retailer received from the lawyer a faxed order for «100 reams of your paper, catalog item #101.»
On December 15, a lawyer received from a retailer of supplies an offer consisting of its catalog and a signed letter stating, «We will supply you with as many of the items in the enclosed catalog as you order during the next calendar year. We assure you that this offer and the prices in the catalog will remain firm throughout the coming year.»
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The UCC allows for an offer to become irrevocable under certain circumstances even if no recitation of the payment of consideration is made under § 2-205, if the offer: (i) is made by a merchant (a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction); (ii) is in a signed writing; and (iii) gives explicit assurance that the offer will be held open. When an offer meets all these criteria, it will be held irrevocable even though there is no consideration given for keeping it open.
If a firm offer under the UCC states a time period for how long the offer will remain open and irrevocable, that time period governs how long the offer remains irrevocable. If the firm offer did not state a period of time, it will be held irrevocable for a reasonable time. A firm offer cannot be made irrevocable for more than three months, even if contracted to remain open for longer. If the three-month period lapses and no consideration is given to support an option, then the offer can be revoked at any time before acceptance (or before it lapses).
A is correct. Because the retailer's firm offer was not supported by consideration, it became revocable as of March 15. However, the lawyer accepted the offer before the retailer revoked it and before the offer lapsed (because the offer stated that it would be open for the entire year); therefore, the retailer is bound to a contract to supply the paper.
B is incorrect. A firm offer cannot be made irrevocable for more than three months, even if contracted to remain open for longer. A firm offer becomes revocable after three months unless consideration is given to support an option to continue the irrevocability of the offer.
C is incorrect. An offer does not automatically revoke after it becomes revocable. Notwithstanding the three-month limit on irrevocability, the lawyer accepted before the retailer revoked the offer.
D is incorrect. Because the offeror is master of his offer, he can set a time limit for acceptance. At the end of this time limit, the offeree's power of acceptance automatically terminates by lapse. If the offer does not set a time limit for acceptance, the power acceptance terminates at the end of a reasonable time period. Here, however, the terms of the offer stated that it would be open for a year.