If a firm offer is accepted, what is the effect?

If a firm offer is accepted, what is the effect?

• A. A contract exists
• B. No contract yet
• C. Only a contract if in writing
• D. Binding only for the buyer

Answer: (A)

When a firm offer is accepted, a contract is formed between the parties. A firm offer, under the UCC for the sale of goods, is a merchant’s written, signed promise to keep the offer open for a stated period, making that offer irrevocable during that time. Once the offeree accepts, mutual assent is reached on the same terms, and a binding contract exists for the sale of the goods. This means both sides have enforceable obligations (delivery, payment, etc.) for the duration and terms of the contract. It isn’t about being valid only if written or only binding on the buyer—the contract binds both parties.

When a firm offer is accepted, a contract is formed between the parties. A firm offer, under the UCC for the sale of goods, is a merchant’s written, signed promise to keep the offer open for a stated period, making that offer irrevocable during that time. Once the offeree accepts, mutual assent is reached on the same terms, and a binding contract exists for the sale of the goods. This means both sides have enforceable obligations (delivery, payment, etc.) for the duration and terms of the contract. It isn’t about being valid only if written or only binding on the buyer—the contract binds both parties.