Contract law as to offers is applicable to a sales contract, with the following exception. A firm offer by a merchant cannot be revoked if the offer:
- expresses an intention that it will not be revoked,
- is in a writing, and
- is signed by the merchant.
For example, on May 15, Smith, a dealer, offered in a signed instrument to sell a stereo set to Bill for $500. By the terms of the offer, Bill was given until June 25 to accept the offer. On June 15, Bill received a writing from Smith revoking the offer. On June 20, Bill wrote Smith, “I hereby accept your offer of May 15.” Since Smith’s offer was a firm offer, which could not be revoked before June 25, there was an enforceable contract.
An express period of irrevocability in the offer cannot exceed three months. If nothing is said as to the duration of the offer, the offer can be revoked after a reasonable time. A firm offer is effective regardless of whether the merchant received any consideration to keep the offer open.