Terminating an Offer and Irrevocable Offers

Question 1

How may an offer be terminated?

Answer 1

1) Through express communication to the offeree
2) Constructive Revocation - offeror takes action inconsistent with ability to contract.
3) Offeree rejects the contract
4) Offeree makes a counteroffer
5) Offeror dies (if there is already a contract it won’t usually terminate a contract)
6) Reasonable amount of time passes.

Question 2

What are irrevocable offers?

Answer 2

1) Options
2) Firm offers
3) Unilateral contract where offeree has started performance
4) Detrimental Reliance

Question 3

Who is a merchant?

Answer 3

A person who regularly deals in the type of good at issue.

Question 4

What are the requirements for a firm offer?

Answer 4

1) Made by a merchant
2) Written
3) Contain an explicit promise not to revoke
4) Be signed by the merchant

Question 5

How long does a firm offer last?

Answer 5

Either as long as stated or for a reasonable time period not to exceed 90 days.

Question 6

What is a unilateral contract?

Answer 6

When acceptance of a contract occurs through action of the promisee instead of a return action.

Question 7

When does detrimental reliance occur?

Answer 7

When the offeree reasonably and detrimentally relied on the offer in a foreseeable manner.

• Very common in general contractor/subcontractor situations.
• Promissory estoppel is a variant on detrimental reliance.