Source: http://www.cisg.law.pace.edu/cisg/biblio/mather2.html
Timestamp: 2016-12-04 08:12:24
Document Index: 544771344

Matched Legal Cases: ['§ 35', '§ 45', '§ 3', '§ 2', '§ 3', '§ 46', '§ 3', '§ 45', '§ 45', '§ 45', '§ 45', '§ 31', '§ 45', '§ 90', '§ 35', '§ 90', '§ 2', '§ 2', '§ 2', '§ 1', '§ 1', '§ 1', '§ 2', '§ 3', '§ 3', '§ 2', '§ 1', '§ 1', '§ 3', '§ 3', '§ 3', '§ 1', '§ 1', '§ 1', '§ 2', '§ 2', '§ 2', '§ 1', '§ 33', 'art. 1', 'art. 10', '§ 4', '§ 148', '§ 145', '§ 145', 'art 16', '§ 142', 'art. 18', 'art. 2', 'art. 7', '§ 143', '§ 143', 'art. 9', 'art. 2', '§ 144', 'art. 2', 'art. 2', 'art. 2', '§ 2', '§ 2', '§ 2', '§ 101', '§ 2', '§ 3', '§\n7', '§ 1', '§ 2', '§ 142', '§ 2', '§ 2', '§ 1', '§ 1']

Go to Database Directory || Go to Bibliography Reproduced with permission of 105 Dickinson Law Review (Fall 2000) 31-56
F.	If the offer does not meet the requirements of section 2-205, might it become irrevocable because of the offeree's reliance?
F.	If the offer does not meet the requirements of article 16(2)(a), might it become irrevocable because of the offeree's reliance?
E.	If the offer does not meet the requirements of proposed section 2-204, might it become irrevocable because of the offeree's reliance?
In the sale of goods context, offerors have usually not chosen to make their offers irrevocable. In some
situations, however, an irrevocable or firm offer makes good sense. If the offeree would have to spend
substantial time and money investigating the proposed deal, he will be unlikely to incur the expense of such
an investigation if the offer can be revoked at any moment; an irrevocable offer makes him more willing to
undertake the investigation and thus enhances the likelihood of acceptance. If the offeror has identified a
particular person as her preferred trading partner or the person most likely to accept her terms, a firm offer
to that person will flatter him with what appears to be a first option; he will thus be more likely to consider
the offer seriously and accept it.
We can expect that in the future, firm offers to buy or sell goods will become ever more frequent. There are
at least two good reasons for such an expectation. First, the increasing technological complexity and product
differentiation of the goods being sold will more often require offerees to undertake costly investigations and
thus lead to a greater number of firm offers. Seconds trade in goods becomes increasingly global, merchants
will more often be searching for trading partners in distant and unfamiliar markets. If an Ohio merchant, for
example, has little information about potential trading partners in such a market, but has been able to identify
one company with a good reputation for competence and dependability, the Ohio merchant will likely have
a strong preference for that company and send it a firm offer, rather than incur the expenses of investigating
This article will examine the firm offer rules in the present Uniform Commercial Code ("UCC"), the proposed
revision of UCC Article 2, and the United Nations Convention on Contracts for the International Sale of
Goods ("CISG"). With respect to each of these rules, we will seek answers to four questions: (1) Must the
[page 31] offer be in writing in order to be irrevocable? (2) What limits are imposed on the period of
irrevocability? (3) What kind of assurance of irrevocability is required? (4) If the offer does not meet the
rule's formal requirements, might the offer nonetheless become irrevocable due to the offeree's reliance? We
will also evaluate the firm offer rule in the proposed revision of UCC Article 2 and consider the propriety of
non-uniform enactments. Finally, we will try to develop some standard terms that could be used in drafting
offers. Throughout this article, we will assume that both parties are merchants.
In the present UCC, the firm offer rule is found in section 2-205. Before looking at this section, however,
we should recall its historical background.
In American contract law, the general rule has been that an offer is revocable until it is accepted.[1] Even
if the offeror promises not to revoke, this promise was traditionally regarded as legally ineffective in the
absence of consideration.[2]
American courts have long recognized that if the offeror promises not to revoke the offer before a specified
time and receives consideration for this promise, an option contract is formed and the offer is irrevocable until
the specified time.[3] Although such option contracts have often been used as preludes to contracts for
the sale of real estate, buyers and sellers of goods have usually not been willing to take the extra step of
forming an option contract before forming a contract for the sale of goods.
Under the Restatement (First) of Contracts, an offer for a unilateral contract becomes irrevocable when the
offeree began the requested performance.[4] This rule applied only if the offer clearly [page 32] invited
acceptance by performance and not by return promise.[5] In the sale of goods context, offers seldom
indicate unequivocally that acceptance can be made only by performance; thus, the Restatement (First) part
performance rule was seldom available. Even when it was applicable it made the offer irrevocable only when
the offeree actually began performance or tendered a beginning of performance, as opposed to merely
preparing to perform.[6]
The Restatement (First) of Contracts also contained a promissory estoppel doctrine stating that the promisee's
reliance on a promise could make the promise enforceable despite the lack of consideration.[7] Could
an offeror's promise not to revoke his offer be enforced under this doctrine? Section 35 provided that an offer
could be terminated by the offeror's revocation, except as stated in sections 45 through 47;[8] the
promissory estoppel doctrine was contained in section 90, however.[9] Further doubts about the
usefulness of promissory estoppel as a device to make offers irrevocable were raised when James Baird Co.
v. Gimbel Bros., Inc.[10] was decided in 1933, one year after the publication of the Restatement (First). In Baird, the court held that the section 90 promissory estoppel doctrine could not be applied to an offer for
a commercial exchange if the offer lacked a promise not to revoke.[11] The court left open the question
of whether a promise not to revoke could be enforced by way of promissory estoppel, but hinted that its
answer would be in the negative.[12]
In the 1940s and 1950s, however, a number of American courts suggested that the offeree's reliance on an
offer could make the offer irrevocable under the promissory estoppel doctrine, but did not make it clear
whether there had to be an express promise not to revoke.[13] This issue was given a rather innovative
resolution in the [page 33] landmark case, Drennan v. Star Paving Co.,[14] decided by the California
Supreme Court in 1958. In Drennan the court held that even if there was no explicit promise not to revoke,
the foreseeability of the offeree's reliance on an offer created an implied promise by the offeror not to revoke:
If this implied promise lacked consideration, it could be enforced under the promissory estoppel doctrine, and
the offer could thus be rendered irrevocable.[15]
The Drennan court indicated, however, that the offeree's reliance on an offer make the offer irrevocable only
if that reliance was detrimental to the offeree, foreseeable to the offeror, and reasonable on the part of the offeree.[16] These requirements are easily met when, as in Drennan, the offeror is a subcontractor who
anticipates that his offer might be relied upon by the offeree general contractor when she makes her own bid
to the owner of the construction site. In many sale of goods cases, however, it would be very difficult for
the offeree to prove that these requirements were satisfied. Promissory estoppel has therefore had somewhat
limited usefulness in the sale of goods context.
As this brief historical survey indicates, any legal rule making offers irrevocable when they lack both
consideration and detrimental reliance would be a radical departure from traditional American contact law. The UCC provided just such a rule for sales of goods.
The 1962 Official Text of the UCC, enacted as statutory law in most states, includes a firm offer rule in
section 2-205. "An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed thee months; but any such term of [page 34] assurance on a form supplied by the offeree must be separately signed by the offeror."[17]
Section 2-205 explicitly requires that the offer be in writing.[18] Furthermore, the written offer must be
signed.[19] The official comments indicate that although section 2-205 was intended to modify the
traditional rule requiring consideration, the purpose was to give effect to only deliberate intentions to make
an irrevocable offer, hence the requirement of a signed writing.[20]
Section 2-205 imposes an outside limit of three months on the period of irrevocability. Thus, if an offer
stated that it would be irrevocable for six months, section 2-205 would make it irrevocable for only three
months.[21] To make such an offer irrevocable for six months the offeree would have to furnish
consideration for the offer.[22] Of course, if an offer states that it will be irrevocable for two weeks the
period of irrevocability will last only two weeks.
Section 2-205 requires that the written offer give an "assurance that it will be held open." This probably
means that the offer must contain a written assurance (a promise) not to revoke. But what of language is
sufficient? I am unable to find any judicial decision that provides helpful guidance here. [page 35]
Language stating that "this offer will expire on June 1" would usually not suffice. It would normally be
interpreted as merely establishing an expiration date for the offer, rather than a promise not to revoke. What
about language stating that "this offer will be open until June 1"? This might be interpreted as an assurance
that the offer will remain available for acceptance until June 1 (will not be revoked before June 1), but it
might also be interpreted as merely stating that the offer will not expire until June 1. Language stating that
"this offer will be good until June 1" is equally ambiguous. What if the offer states that it "will be held open
until June 1"? Most offerees could reasonably interpret this as an assurance by the offeror that he will not
revoke before June 1. The phrase "will be held open" suggests that during the stated period, the offeror will
not take positive action to kill the offer, which is not the same thing as merely watching the offer expire. Finally, language stating that "we assure you that we will not revoke this offer before June 1" should certainly
White and Summers suggest that the following language would satisfy the section 2-205 "assurance"
requirement: "This offer is firm and will remain open for three months."[23] What indicates a promise
not to revoke is not the phrase "will remain open for three months" (which is ambiguous), but the word "firm," which is usually interpreted to mean irrevocable. We should exercise caution, however, before
concluding that any given word or phrase will always (or never) satisfy the section 2-205 requirement. A
word or phrase may mean one thing in one trade and something else in another trade.
All we can say is that our courts can be expected to interpret the language of the offer as an "assurance"
under section 2-205 if the offeree could have reasonable interpreted the language as a promise not to revoke. In dealing with problems of contract formation and mutual assent, most American courts take an objective
approach, interpreting one party's words as they would reasonably be interpreted by the other party.[24] We can thus expect [page 36] a court to consider all of the offeree's circumstances (including usages of trade
and any prior course of dealing with the offeror) that shed light on how the offeree could have reasonably
interpreted the language in the offer.
An offer might contain some indication that it is irrevocable and yet not meet the requirements of section 2-205. It might not be in writing. It might be written but not signed. It might not contain an adequate
"assurance" of irrevocability. Does section 2-205 permit a finding that such an offer is nonetheless
irrevocable because of the offeree's reliance? Or does section 2- 205 displace any case law applying
promissory estoppel, so that such case law cannot be used via section 1-103?[25]
The last sentence of comment 2 to section 2-205 states that when oral offers are relied upon they "remain
revocable under this Article since authentication by a writing is the essence of this section.[26] Does this
merely mean that oral offers cannot be made irrevocable by section 2-205, or does it mean that compliance
with [page 37] section 2-205 is the only way to render irrevocable an offer lacking consideration in a
transaction governed by Article 2? The quoted words "under this Article" seem to suggest the latter
interpretation. But in most states, the official comments are not enacted as statutory law and remain merely
persuasive authority. A court could thus reject the last sentence in comment 2, if it could not interpret that
sentence to be consistent with case law approving promissory estoppel as a device to make offers irrevocable.
Certain cases are often cited as authority for the proposition that section 2-205 does not preclude the
application of promissory estoppel. Some of these decisions involved (or may have involved) sale of goods
transactions and approved the use of promissory estoppel. But none of them expressly held that an offer not
complying with section 2-205 can be made irrevocable under promissory estoppel theory.
E.A. Coronis Associates v. M. Gordon Construction Co.[27] involved a subcontractor's bid to supply
and erect structural steel.[28] Although the appellate court remanded the case for a determin-ation of
whether the elements of a promissory estoppel were present,[29] it did not decide whether the bid was
an offer [30]and did not decide whether the transaction was governed by UCC Article 2.[31] The
court noted that the bid did not contain anything resembling the assurance required by section 2- 205 [32]
but expressly declined to decide whether section 2-205 precludes promissory estoppel.[33]
Janke Construction Co. v. Vulcan Materials Co.[34] involved an oral price quotation for the sale of
concrete pipes to a general contractor.[35] The federal district court noted that the price quotation did
not comply with UCC section 2-205,[36] but enforced the supplier's price quotation under the Wisconsin
promissory estoppel doctrine.[37] We might see here an implicit holding that section 2-205 does not
preclude promissory estoppel. But the court did not indicate the promissory estoppel was being used to make
an [page 38] offer irrevocable. The court never characterized the price quotation as an offer, and there does
not appear to have been an attempted revocation. So revocability was not an issue. This was merely a case
in which the court applied the Wisconsin promissory estoppel doctrine, which enforced promises that did not
even rise to the level of a contractual offer.[38]
Jenkins & Boller Co. v. Schmidt Iron Works, Inc.[39] involved a subcontractor's written bid for the sale
and installation of various metals.[40] The appellate court cited a number of UCC Article 2 sections
(including 2-205) [41] and apparently assumes that the transaction was governed by Article 2. The
appellate court upheld the trial court's application of promissory estoppel in awarding judgment to the general
contractor who relied on the bid.[42] But it is not clear that revocability was an issue (acceptance may
have preceded attempted revocation [43]). The opinion never stated that an offer that does not comply
with section 2-205 may nevertheless become irrevocable under promissory estoppel doctrine.
Two decisions involved offers to sell goods and declined to apply promissory estoppel theory. But neither
opinion expressly states that promissory estoppel cannot be used to make irrevocable an offer that does not
comply with section 2-205.
In Tatsch v Hamilton-Erickson Mfg. Co.,[44] a supplier made a telegraphic offer in 1963 to sell folding
tables and benches to a general contractor.[45] The New Mexico court held that the offeree's reliance
on the offer could not constitute a promissory estoppel and cited the Baird decision.[46] Although the
UCC had been in effect in New Mexico since 1962, the court did not cite section 2-205 or any other UCC
section and seems to have been unaware of section 2-205.[47]
Ivey's Plumbing & Elec. Co. v. Petrochem Maint., Inc.[48] involved a manufacturer's price quotation,
partly oral and partly [page 39] written for the sale of air compressors.[49] The court held that the price
quotation was at best a revocable offer, because it contained no assurance that it would be held open, as
required by UCC section 2-205.[50] The court did not expressly hold that section 2-205 precludes the
application of promissory estoppel. But the court held that under Mississippi law, promissory estoppel could
not overcome the UCC section 2-201 statute of frauds defense,[51] so the court was obviously aware
of promissory estoppel theory when it discussed section 2-205. Furthermore, the court stated in a footnote
that it rejected the contention that a seller's firm offer "may arise by implication from the mere fact of the
buyer's" detrimental reliance.[52] It is not clear, however, whether the court merely meant to state the
truism that an express promise to hold an offer open cannot be implied from offeree reliance (or the
foreseeability of such reliance), or meant, in addition, that promissory estoppel cannot be used to enforce an
express promise to hold an offer open when the offer fails to satisfy one of the other section 2-205
Although the scholarly commentators are not in agreement on this promissory estoppel issue, they are at least
clear in staking out their positions. White and Summers suggest that when "section 2-205 is not met, this
should not be taken to prevent offerees from invoking promissory estoppel or Restatement doctrine.[53] Robert Nordstrom states that section 2-205 should not be read to preclude the application of promissory
estoppel; he makes the interesting argument that section 2-205 was not intended to deal with the revocability
"of offers from which consideration has been given or for which a substitute for consideration is present."[54] Michael Gibson argues that, on the contrary, Karl Llewellyn, the primary drafter of UCC Article 2,
was opposed to promissory estoppel doctrine because of his desire for formal authentication of firm offers,
and that the courts have improperly used promissory estoppel to bypass UCC sections such as 2-205.[55] [page 40]
The CISG is an international treaty ratified by the United States and most of the other leading trading nations
in the world, with Japan and the United Kingdom being the most notable exceptions. The CISG governs a
sale of goods transaction between a party located in the United States and a party having its place of business
in another country that has ratified the treaty.[56] The CISG does not normally apply, however, to goods
bought by a consumer; nor does it apply to sales of vessels or aircraft.[57]
The treaty was drafted by the United Nations Commission on International Trade Law ("UNCITRAL").[58] In drafting the article dealing with the revocability of offers, UNCITRAL faces a serious challenge:
the various domestic legal systems of the world took widely disparate approaches to revocability. A survey
of English, German, and French contract law illustrates this disparity.
In English contract law, offers are generally revocable until there is an effective acceptance.[59] Even
if the offeror expressly promises not to revoke during a specified time, this promise is not enforceable unless
it is supported by consideration or is under seal.[60] English courts have been reluctant to use the
promissory estoppel doctrine often employed by American courts to make [page 41] subcontractors' offers
irrevocable and thus allow accepting offerees to recover the breach of contract.[61] In England, the
tendency has been to use promissory estoppel only as a shield for defendants and not as a sword enabling
plaintiffs to establish causes of action.[62]
With respect to the revocability of offers, German contract law is at the opposite end of the spectrum. Offers
are generally irrevocable. If the offeror promises not to revoke during a specified period, the offer cannot
be effectively revoked during that period.[63] If the offer states that it must be accepted within a
specified period and thus fixes an expiration date, it is irrevocable throughout that period.[64] If the offer
is silent as to both revocability and expiration, it is irrevocable for a reasonable time (a reasonable time for
a response for the offeree).[65] About the only way the "offeror" can make the "offer" revocable is to
expressly state that it is revocable, using words such as freibleibend or ohne Obligo. In such a case, it is
likely to be treated as an invitation for an offer and not as a true offer.[66]
The French approach to revocability lies somewhere between the English approach and the German approach. Although offers have generally been revocable under French law, there are a number of situations in which
the offeror has an obligation not to revoke.[67] These situations arise when the offeror expressly promises not to revoke during a specified time,[68]
The court decisions and commentators are not in agreement, however, about the legal consequences of a
premature revocation that violates the obligation not to revoke.[71] It has been suggested that the
premature revocation is ineffective and that the offeree's acceptance will thus form a contract for breach of
which the offeror would be liable for expectation damages.[72] The other and more often expressed view
is that he premature revocation effectively precludes the formation of a contract but subjects the offeror to
delictual (tort) liability for the offeree's reliance loss.[73]
The French approach obviously differs from the English approach by imposing on offerors a legal obligation
not to revoke in many situations where there is no promise of irrevocability supported by consideration. Unlike the German approach, however, the French approach does not clearly make a premature revocation
ineffective; it is likely to merely subject the offeror to liability for the offeree's reliance loss, and in many
cases, the offeree will not have suffered any reliance loss.
CIGS article 16 was designed as a compromise of the disparate approaches taken by domestic legal systems.[74] It provides as follows: "Until a contract is concluded an offer may be revoked in the revocation reaches the offeree before he has dispatched an acceptance. "However, an offer cannot be revoked: [page 43]
Unlike UCC section 2-205, CISG article 16(2) does not require that an offer be in writing in order to be firm
and irrevocable. Although it may be difficult for an offeree to prove that an unwritten offer indicated that
it was irrevocable, it is often possible.
CISG article 16(2) also differs from the UCC firm offer rule by not imposing any statutory limit on the period
of irrevocability. Thus an offer will be irrevocable for one year if the offer so stipulates.
Under article 16(2), an offer will be irrevocable if its express terms indicate irrevocability. The offeror need
not use the words, "I promise not to revoke." An assurance that "I will hold this offer open until June 15"
will make the offer irrevocable until June 15.[76] It has also been suggested that words like "this is a firm
offer" unambiguously indicate irrevocability.[77] [page 44]
Problems arise from the article 16(2)(a) reference to "a fixed time for acceptance." This is undoubtedly a
reference to offer language stating that the offer must be accepted within a specified time or that the offer
will expire at a specified time.[78] Does such language necessarily indicate irrevocability and thus
automatically make the offer irrevocable? An American lawyer would be surprised by this question. She
would assume that fixing a time when the offer expires cannot, by itself, indicate that the offer is irrevocable. But, as we have noted, civil law systems are apt to regard the fixing of an expiration date as a sign of
irrevocability.[79]
The CISG has no official comments. But UNIDROIT Principles of International Commercial Contracts
article 2.4 is identical to CISG article 16. And comment 2(a) to UNIDROIT article 2.4 states that the
"indication of a fixed time for acceptance may, but need not necessarily, amount by itself to an implicit
indication of an irrevocable offer. The answer must be found in each case through a proper interpretation
of the terms of the offer ..."[80] The UNIDROIT Principle and comments were drafted by an international
team of legal experts and were intended to be an unofficial restatement of legal principles for international
commercial contracts. We can expect that many courts and arbitrators will use the comments to UNIDROIT
article 2.4 for guidance in interpreting CISG article 16.[81]
The prevailing view of commentators on the CISG is similar to the UNIDROIT comment insofar as both
deny that an offer that [page 45] fixes a deadline for acceptance (an expiration date) is automatically
irrevocable. In the commentators' view, however, offer language limiting the time for acceptance should be
regarded as creating a presumption that the offer is irrevocable during this time. The presumption could be
rebutted by a showing that the offer would be understood as merely setting an expiration date.[82]
I see no justification for a presumption that tilts the evidentiary playing field in favor of either party. Article
16(2)(a) should be interpreted so that stating a fixed time for acceptance may indicate irrevocability, but
whether it does indicate irrevocability should depend upon an application of CISG article 8, which determines
how the offer should be interpreted and does not support the use of presumptions. Article 8 provides:
Consider a hypothetical case in which the offer stipulated that it could not be accepted after March 15. Assume that the offeree did not ask the offeror whether her offer was irrevocable, and that given what the
offeree knew, he would not have been "aware" of the offeror's subjective intent to make a revocable offer.[84] [page 46] Paragraph (1) is thus inapplicable. The offer must be interpreted under paragraph (2) and
is irrevocable through March 15 if a reasonable person in the offeree's position would understand the
language fixing a March 15 deadline for acceptance as also indicating irrevocability. We will assume that
there are no relevant circumstances of the types listed after the word "including" in paragraph (3). We will
assume, for example, that the parties are transacting business in an international trade that has no regularly
observed usage concerning the irrevocability implications of offer language that fixes an expiration date.[85]
In applying article 8(2), the basic question is whether a reasonable person in the offeree's circumstances
would have assumed that the offer was irrevocable and would not have bothered to contact the offeror and
ask her whether the offer was irrevocable. In some variants of our hypothetical case, the answer to this basic
question should be affirmative, and the offer should be declared irrevocable through March 15. If advice of
counsel or the offeree's own experience in trading with persons in the offeror's country led the offeree to
believe that the practice in the offeror's country was to regard as irrevocable any offer that fixed a deadline
for acceptance, then the offeree could reasonably assume that the offer he received was intended to be
In other variants, however, the answer to the basic question should be negative, and the offer should be
declared revocable. If the offeree's only reason for assuming that the offeror had made an irrevocable offer
was the fact that in the offeree's country, offers fixing a deadline for acceptance are normally regarded as
irrevocable, such an assumption would be unreasonable. A reasonable person engaged in international trade
would not assume that legal and business practices in his country were reflected in the practices of every
other country. A reasonable offeree would therefore make an inquiry as to the offeror's intention, and the
cheapest and most reliable inquiry would be one directed to the offeror herself. The offeror's response to the
reasonable offeree's inquiry would be that the offer was revocable, and the reasonable offeree would thus not
assume that it was irrevocable. [page 47]
Recall that under CISG article 16(2)(b), an offer is irrevocable "if it was reasonable for the offeree to rely
on the offer as being irrevocable and the offeree has acted in reliance on the offer.[86] Even if the words
of the offer do not indicate irrevocability under paragraph (2)(a), the offeree may be able to establish
irrevocability under paragraph (2)(b) if he has reasonably relied on an implied promise not to revoke.
Paragraph (2)(b) looks very much like American promissory estoppel doctrines, although it does not
expressly require that the offeree's reliance must have been foreseeable to the offeror and does not expressly
require that the offeree's reliance be detrimental.[87] Despite these omissions, we can expect that many
tribunals will apply paragraph (2)(b) in much the same fashion as American courts have used promissory
estoppel. If the offeree's reliance was not reasonably foreseeable to the offeror, a court applying paragraph
(2)(b) could usually find that the offeree's reliance on the offer's being irrevocable was unreasonable.[88] And courts could easily assume that "reliance" means detrimental reliance. To rely on a belief (for example,
a belief that the offeror will not revoke) is to act in a way that will impair one's future well-being if the belief
turns out to be false. Cases arise under paragraph (2)(b) because an offeree's belief that the offeror would
not attempt to revoke has turned out to be false.
The critical issue under paragraph (2)(b) is whether the offeree reasonably relies on the offer's being
irrevocable. Presumably, the offeree (1) must have had a good reason for believing that the offer was
irrevocable and (2) must also have acted reasonably in relying on that belief (did not engage in a foolhardy
form of reliance). Both requirements will probably be met when the parties understand that the offeree might
use the offer in preparing his own offer to a third person, as in cases where a supplier of goods makes an offer
to a general contractor who is bidding for a construction contract.[89] It has also been suggested that
the reliance requirements [page 48] met when the parties understood that the offeree would have to
undertake a costly investigation in order to decide whether to accept the offer.[90]
It is not clear whether an offeree can satisfy the requirements of paragraph (2)(b) when his reliance takes the
form of inaction (an omission or forbearance). The English version of paragraph (2)(b) uses the word
"acted." A court might decide that an offeree has not acted in reliance if his only reliance was a failure to act.[91] At least one commentator, however, suggests that the word "acted" means not only a positive act,
but also a failure to act, for example, a demonstrable failure to solicit other offers.[92]
Since 1991, a drafting committee appointed by the Permanent Editorial Board for the UCC has been working
on a revised Article 2. When a final draft has been approved by both the American Law Institute ("ALI")
and the National Conference of Commissioners on Uniform State Laws ("NCCUSL"), the new Article 2 will
be promulgated as a uniform act and presented to the various state legislature for statutory enactment. The
following discussion is based on the April 14, 2000 Decision Draft of the revised Article 2.[93]
In the proposed revision of Article 2, the firm offer rule has been moved from section 2-205 to section 2-204,
which provides: "An offer by a merchant to buy or sell goods is an authenticated record which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; [page 49] but any such term of assurance in a form record supplied by the offeree must be separately authenticated by the offerer."[94]
The proposed firm offer rule does not require that the offer be in "writing." The present requirement of a
"signed writing" would be replaced by the requirement of an "authenticated record." The word "record"
means "information that is inscribed on a tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form."[95] To "authenticate" a record, one must sign or otherwise use
a symbol or sound with intent to adopt or accept the terms of that record.[96]
Thus, the words of an offer are preserved in a "record" if they can be seen on a computer screen or heard
from a tape recording, even if they are never reduced to tangible form.[97] And this record can be
"authenticated" by the offeror through use of any visible symbol or sound intended to indicate her adoption
of the offer terms. Nevertheless, a telephonic or other oral offer is not in an authenticated record if it has not
been recorded in some way. Thus, a primary purpose of the original UCC firm offer rule -- to exclude oral
offers -- is preserved.[98] The proposed revision merely accommodates technological advances in
recording communications.
It may be argued that the revised firm offer rule should not even require an authenticated record, that it
should apply to purely oral offers, as CISG article 16(2) does.[99] I see no compelling objective,
however, to the authenticated record requirement, so long as the new section 2-205 makes it clear that an
authenticated [page 50] record containing the offeror's assurance of irrevocability is not the exclusive way
to make an offer irrevocable, and allows some means of making a purely oral offer irrevocable.
Note that the proposed section 2-205 preserves the present three-month limit on the period of irrevocability. A three-month limit on "reasonable time" (the period of irrevocability when no period is specified in the offer)
is probably justified. It enhances the predictability of legal outcomes and is arguably consistent with the
A three-month limit or irrevocability when the offerer specifies a longer period is a different matter, however. It is difficult to see why an offer that states a six-month period of irrevocability should be treated differently
than an offer stating a two-month period. The outside limit of three-month should be eliminated in order to
respect party autonomy and makes the UCC consistent with the GISG.
The new proposed UCC firm offer rule applies only if the offer record "by its terms gives assurance that it
will be held open."[100] This is essential the language of the present rule.
We noted above that our courts have not made it clear what counts as an adequate "assurance."[101] One might therefore argue that the revised firm offer rule should clear up some of the confusion. The new
rule could at least provide that merely fixing an expiration date is not an adequate assurance that the offer
It seems preferable, however, to accept the statutory language in the proposed revision. As offer should be
interpreted as a reasonable person in the offeree's circumstances would interpret it. Language that would
note be interpreted as an assurance of irrevocability in one trade might be interpreted as such an assurance
in another trade. This might even be true of language fixing an expiration date. It would therefore be unwise
to revise the firm offer rule by identifying particular language as always inadequate or always adequate. [page 51]
E. If the offer does not meet the requirements of proposed section 2-204, might it become irrevocable
because of the offeree's reliance?
We noted above that it is not clear whether the present UCC section 2-205 firm offer rule precludes courts
from using promissory estoppel to make an offer irrevocable.[102] This is an important issue that needs
to be resolved. A small step in this direction was taken in the comments to a previous draft of the revised
Article 2: "[Section 2-205] supplements rather than displaces other methods by which [offers are made
irrevocable], such as with consideration or by reliance."[103] This is a clear statement that the firm offer
rule in proposed section 2-205 does not preclude the application of promissory estoppel to offers that fail to
meet that section's formal requirements.
Even if the comment is restored in the final version of the new Article 2, however, it would be only a
persuasive comment and not statutory law. The comment would still leave it up to the courts of each state
to decide whether promissory estoppel can be applied. We cannot expect the case law to be uniform from
state to state. We can expect that the case law of many states will be difficult to research and comprehend.
It would be preferable that the statutory text of the new section 2- 205 explicitly provide that an offeror's
express or implied assurance of irrevocability makes the offer irrevocable if it is supported by consideration
or the offeree reasonably relies on it. This is the position that a probable majority of courts would take.
If the proposed section 2-205 is promulgated by the ALI and NCCUSL as part of a uniform act, it would not
be improper for state legislatures to enact non-uniform versions setting forth their positions on promissory
estoppel. I would hope that many legislatures would enact provisions similar to that proposed in the
preceding paragraph. Even if some legislatures provide that offeree reliance cannot make an offer
irrevocable, that would at least be a welcome clarification of the law in those states.
One of the purposes of the UCC is to make uniform the law among the various jurisdictions.[104] Another important purpose is to [page 52] simplify, clarify and modernize the law governing commercial
transactions.[105] If state legislatures enact disparate non-uniform versions of the new section 2- 205,
adding provisions dealing with promissory estoppel, this obviously will not enhance uniformity, but neither
will it make the law less uniform than it would be if all states were to enact section 2-205 in its proposed
uniform version and then go their separate ways by means of case law. The statutory enactment of such non-uniform versions would at least make it easier for lawyers to ascertain each state's position on promissory
estoppel in the revocation context and would thus promote simplicity and clarity.
It may be objected that state legislatures should not attempt to codify a promissory estoppel doctrine because
this would deprive courts of the flexibility needed in developing and applying a doctrine that is equitable in
nature. But the statutory reference to offeree reliance need not present a detailed and inflexible promissory
estoppel doctrine with an exhaustive enumeration of all the required elements. A non-uniform version of the
new section 2-205 could paint its position on reliance with broad strokes.
CISG article 16(2)(b) provides a good model. It expresses the crucial requirement that the offeree's reliance
be reasonable. As I have already suggested, the CISG's failure to expressly require that the reliance be reasonably foreseeable to the offeror and detrimental to the offeree is not a serious defect.[106] If
necessary, such details can be filled in by case law. If a strong majority of states were to incorporate the
language of CISG article 16(2)(b) into non-uniform versions of the new UCC section 2-205, this would
actually enhance legal uniformity, not only throughout the United States, but throughout the global
marketplace.[107] [page 53]
During the next few years, the various states of the United States will enact the revised UCC Article 2 at
different times, and the CISG will be ratified by additional counties at different times. Many offerors
negotiating contracts for sales of goods will thus face an especially complex legal environment. Some of their
offers will be governed by the present UCC Article 2, some will be governed by the revised Article 2, some
will be governed by the CISG, and some will be governed by the domestic law of a state or country that has
not adhered to any UCC Article 2 or to the CISG. As we have seen, these different bodies of law contain
different rules concerning revocability.
Despite these differences, it will be possible for offerors and their lawyers to develop standard revocability
terms that can be routinely used (with a high probability of success) in most transactions likely to be governed
by either the UCC or the CISG. In other words, a New York offeror should be able to use the same
revocability term for Texas offerees and French offerees. The offeror will, of course, need two different
standard terms: one for situations in which he wants his offer to be revocable, and another for situations in
which he wants his offer to be irrevocable.
If a New York offeror wants his offer to be revocable, he should use a standard term similar to the following: "This offer will expire at 5:00 p.m. New York time on __________, 20__ and cannot be accepted after that time. This is not a firm offer, and we reserve the right to revoke it at any time. Therefore, you should not rely on this offer until we have formed a contract."
This first sentence established a very specific expiration time. There are good reasons for specifying a time
of expiration. First, it avoids the uncertainty that arises when the offer states no expiration time and is thus
deemed to have a "reasonable" duration. Second, if the market price of the goods is apt to fluctuate rapidly,
the offeror will want an early expiration date that curtails the offeree's opportunity to speculate at the offeror's
expense (and does so automatically, without any need for offeror revocation).[108] Fixing an expiration
date would not make the offer [page 54] irrevocable under the present or revised UCC rule, and should not
make the offer irrevocable under CISG article 16(2)(a), because the offer clearly indicates that it is revocable.
This is accomplished in the second sentence, which, in order to minimize the risk of misunderstanding, says
the same thing in two different ways: "This is not a firm offer," and "we reserve the right to revoke it at any
time." Such language should make the offer revocable even under the domestic law of a country that follows
the German approach to revocability.
The third sentence is a warning to the offeree that she should not rely on the offer. Such a warning will tend
to make any offeree reliance unreasonable and thus help the offeror overcome an argument based on
American promissory estoppel doctrine or on GISG article 16(2)(b).
If a New York offeror wants his offer to be irrevocable, he should use a standard term similar to the following (and offerees should be advised by their counsel to request such language): "This offer will expire at 5:00 p.m. New York time on __________, 20__ and cannot be accepted after that time. This is a firm offer, and we assure you that we will not revoke it prior to the above-stated time of expiration."
The first sentence is identical to the first sentence in the standard term for revocable offers. The reasons for
fixing an expiration time in revocable offer apply to irrevocable offers as well.
So long as the offer appears in a "signed writing," the second sentence would make the offer irrevocable
under the present UCC section 2-205.[109] But for no more than three months! If an American offeree
requests an offer that is firm for a longer period, the offeror could suggest an option contract with
consideration. [page 55]
So long as the offer appears in an "authenticated record," the second sentence would make the offer
irrevocable (for up to three months) under the proposed revised UCC section 2-205. (An American offeree
who wants more than three months of irrevocability could purchase an option contract.) So long as the terms
of the offer are provable in any way, the second sentence would also make the offer irrevocable (throughout
its duration) under CISG article 16(2)(a).
The second sentence would make the offer irrevocable under the domestic law of many countries, but not
countries (such as the United Kingdom) that follow the English approach to revocability and have not yet
ratified the CISG. An offeree located in such a country should be advised to consult her own lawyer.[110]
In summary, the proposed standard terms could be routinely used when an American offeror wants to make
a revocable offer, and could be routinely used for most situations in which an American offeror wants to
make an irrevocable offer to an offeree located in the United States or some other country that has ratified
the CISG. If an American offeree requests an offer that is firm for more than three months, however, the
offeror should suggest an option contract. And if the offeree is located in a country that has not yet ratified
the CISG, the offeror should advise her to ask her own lawyer how the offer could be made irrevocable under
the law of her own country. [page 56]
1. See, e.g., Restatement (First) of Contracts § 35(1) (1932) (stating that an offer may be terminated
by the offeror's revocation, except as stated in §§ 45-47); E. Allan Farnsworth, Contracts § 3.17, at 158 (3d
2. See, e.g., John D. Calamari & Joseph M. Perillo, The Law of Contracts § 2.25(b), at 113 (4th ed.
1998); Farnsworth, supra note 1, § 3.23, at 180.
3. See, e.g., Restatement (First) of Contracts § 46 (1932); Farnsworth, supra note 1, § 3.23, at 180-82. In this article, the term "option contract" refers to the contract formed when consideration is exchanged for
a promise not to revoke an offer.
4. See, e.g., Restatement (First) of Contracts § 45, § 45 cmts. a, b (1932).
5. See id § 45, § 45 cmt. c, § 31.
6. See id § 45 cmt. a.
7. See id § 90.
8. See id § 35(1).
9. See Restatement (First) of Contracts § 90.
10. 64 F.2d 344 (2d Cir. 1993) (involving subcontractor's offer to sell linoleum to a potential general
13. See Robert Gordon, Inc. v. Ingersoll-Rand Co., 117 F.2d 654, 661 (7th Cir. 1941) (dictum)
(rejecting Baird and indicating that the fact that a transaction would be a commercial sale of goods would
not preclude the use of promissory estoppel); Kucera v. Kavan, 84 N.W.2d 207, 210 (Neb. 1957) (dictum)
(indicating that an option contract offer to sell an interest in land would also be irrevocable under section 90
of the Restatement (First); Northwestern Eng'g Co. v. Ellerman, 10 N.W.2d 879, 884 (S.D. 1943) (rejecting
Baird reasoning and holding that a subcontractor's offer to construct a sewer system was irrevocable under
section 90 the offeror did not explicitly promise not to revoke).
14. 333 P.2d 757 (Cal. 1958) (involving subcontractor's bid offer to do paving work for a general
17. U.C.C. § 2-205 (2000). The term "merchant" is defined in id. § 2-104(1). In applying section
2.205, we should regard as a merchant any person acting within the scope of her business. See id. § 2-104
cmt. 2.
18. The term "writing" is defined in id. § 1-201(46).
19. The term "signed" is defined in id. § 1-201(39) and further explained in § 1-201 cmt. 39.
20. See id. § 2-205 cmts. 1-2.
21. When does the three-month period of irrevocability begin to run? When the offer is sent or when
it is received? Presumably, when it is received. American case law generally regards an offer as not
becoming effective until it is received by the offeree. See, e.g., E. Allan Farnsworth, Contracts § 3.10, at 134
(3d ed. 1999). Until an offer has become effective, it can be "withdrawn" but cannot be "revoked." For the
distinction between withdrawal and revocation, see id. § 3.17, at 157.
22. If the promise not to revoke is supported by consideration, the period of irrevocability may continue
for as long as the parties specify; the section 2-205 rule deals only with offers that are not supported by
consideration. See U.C.C. § 2.205 cmt. 3 (2000).
23. James J. White & Robert S. Summers, Uniform Commercial Code § 1- 4, at 49 (5th ed. 2000)
(student hornbook edition); James J. White & Robert S. Summers, Uniform Commercial Code § 1-4, at 33
(4th ed 1995) (practitioners' edition).
24. See, e.g., Farnsworth, supra note 21, § 3.6, at 116-18 (discussing subjective and objective theories
of assent), § 3.10, at 132-34 (discussing which communications are offers), § 3.17, at 159 (discussing what
counts as a revocation). Unless it is somehow inconsistent with the UCC rules, case law espousing the
objective approach to interpretation can be applied by the court. See U.C.C. § 1-103 (2000).
25. A case law doctrine does not supplement the UCC provisions if it has been "displaced" by a
particular UCC provision. See U.C.C. § 1-103 (2000). The official comments to section 1-103 use the phrase
"explicitly displaced." See id. § 1-103 cmt. 1.
If the offer is not written and signed, the offeree who tries to use promissory estoppel to enforce a promise
not to revoke is also likely to have a problem under the statute of frauds in section 2-201. Subsection (1)
states that "[e]xcept as otherwise provided in this section a contract for the sale of goods for the price of
$500 or more is not enforceable...unless there is some writing... signed by the party against whom
enforcement is sought." U.C.C. § 2-201(1) (1999). This rather clearly indicates that the exceptions in
subsections (2) and (3) are the only exceptions. The exceptions in subsection (3) cover some acts of reliance,
but only when those acts involve part performance or preparations for performance. See id. § 2-201(3)(a),
(c). Nevertheless, a court might hold that the statute of frauds is not a defense to a promissory estoppel claim. One court, for example, reasoned that the section 2-201 statute of frauds applies only to contractual claims,
and a promissory estoppel claim is a noncontractual claim. See Janke Constr. Co. v. Vulcan Materials Co.,
386 F. Supp. 687, 697 (W.D. Wis. 1974) (applying Wisconsin law), aff'd, 527 F.2d 772 (7th Cir. 1976).
Other courts, however, hold that promissory estoppel cannot be used to avoid the statute of frauds, see,
e.g., Ivey's Plumbing & Elec. Co. v. Petrochem Maintenance, Inc., 463 F. Supp. 543, 552-54 (N.D. Miss.
1978) (applying Mississippi law), or that promissory estoppel can overcome the statute of frauds only when
the promisor had promised to produce a writing, see, e.g., Tiffany Inc. v. W.M.K. Transit Mix, Inc., 493 P.2d
1220, 1225-26 (Ariz. App. 1972).
26. U.C.C. § 2-205 cmt. 2 (2000).
47. See id. at 190 (stating that an offer not under seal or given for a consideration may be withdrawn
at any time prior to acceptance).
53. James J. White & Robert S. Summers, Uniform Commercial Code § 1- 4, at 49 (5th ed. 200)
(4th ed. 1995) (practitioners' edition).
54. Robert J. Nordstrom, Handbook of the Law of Sales § 33, at 86 (1970) (emphasis added).
55. See Michael Gibson, Promissory Estoppel, Article 2 of the U.C.C., and the Restatement (Third) of
Contracts, 73 Iowa L. Rev. 659, 661, 662, 701-03 (1988).
56. See United Nations Convention on Contracts for the International Sale of Goods, opened for
signature April 11, 1980, art. 1, S. Treaty Doc. No. 98-9 (1980), 19 I.L.M. 668 [hereinafter "CISG" ]. If
a party has places of business in more than one country, the one that counts is the one that has the closest
relationship to the contract and its performance. See id. art. 10(a). Article 1(1)(b) provides that the CISG also applies when the parties are located in different countries and
conflict of laws rules lead to the application of the law of any country that has ratified the treaty. This
provision is not United States law, however, because the United States has declared, pursuant to article 95,
that it will not be bound by article 1(1)(b). See message from the President of the United States Senate,
Appendix IB, S. Treaty Doc. No. 98-9 (1980).
58. For a brief history of the drafting of the CISG and the 1980 Vienna diplomatic conference at which
it was approved, see John O. Honnold, Uniform Law for International Sales Under the 1980 United Nations
Convention §§ 4-10 (3d ed. 1999).
59. See J. Beatson, Anson's Law of Contract 52 (27th ed. 1998); Hein Kötz, 1 European Contract Law
22 (Tony Weir trans., 1997).
60. See Beatson supra note 59, at 54-55; Kötz, supra note 59, at 22; P.D.V. Marsh, Comparative
Contract Law England, France, Germany 58 (1994); Iswar C. Saxena Report on English Law, in 1 Formation
of Contracts 766, 766 (Rudolf B. Schlesinger ed., 1968).
62. See Beatson, supra note 59, at 117-18 (citing Combe v. Combe, 2 K.B. 215 (1951), and other
64. See Karl H Neumayer, Report on German and Swiss Law, in 1 Formation of Contracts 780, 782
(Rudolf B. Schlesinger, ed., 1968) (citing § 148 BGB [the German Civil Code]).
65. See Kötz, supra note 59, at 23 (citing § 145 BGB); Marsh, supra note 60, at 63; Konrad Sweigert
& Hein Kötz, Introduction to Comparative Law 361 (3d rev. ed. Tony Weir trans., 1998).
66. See Kötz, supra note 59, at 23; Marsh, supra note 60, at 63; Zweigert & Kötz, supra note 65, at 362;
Neumayer, supra note 64, at 781 (citing § 145 BGB).
68. See Cass. Civ., Dec. 17, 1958, D. Jur. 1959, 33 (declaring that if the offeror has expressly or
implicitly undertaken not to revoke before a certain time, he cannot revoke before that time without incurring
liability); Marsh, supra note 60, at 59, Barry Nicholas, French Law of Contract 64 (1982); Pierre Bonassies,
Report of French Law, in 1 Formation of Contracts 769, 769-70 (Rudolf B. Schlesinger ed., 1968).
69. See Kötz, supra note 59, at 22-23; Zweigert & Kötz, supra note 65, at 359; Bonassies, supra note
68, at 772 n.17.
70. See Kötz, supra note 59, at 22-23; Marsh, supra note 60, at 59-60; Nicholas, supra note 68 at 64;
Zweigert & Kötz, supra note 65, at 359; Bonassies, supra note 68, at 772 n.17.
73. See Kötz, supra note 59, at 22-23; Nicholas, supra note 68, at 64- 66 (discussing two court decisions
that favored a delictual remedy and observing that there seems to be no case in which a clearly contractual
remedy has been given); Zweigert & Kötz, supra note 65, at 359-60.
74. See Kötz, supra note 59, at 24; G. Eörsi, Article 16 -- Revocability of Offer in Commentary on the
International Sales Law 150, 150-54 (C.M. Bianca & M.J. Bonell eds., 1987). For a contrary view that the
CISG rule is not a compromise between civil legal systems and common law legal systems, but instead is
based on fundamental ideas shared by both types of legal system, see Kazuaki Sono, Restoration of the Rule
of Reason in Contract Formation: Has There Been Civil and Common Law Disparity?, 21 Cornell Int'l L.J.
477, 478-84 (1988).
75. CISG art 16. Under the CISG, "revocation" of an offer is distinguished from "withdrawal" of an
offer. Under article 15(2), an offer (even one that is irrevocable) may be withdrawn if the withdrawal reaches
the offeree before, or at the same as, the offer. Since an offer cannot become effective until it reaches the
offeree (article 15(1)), a withdrawal complying with article 15(2) prevents the offer from ever becoming
effective. Revocation, on the other hand, is a way of terminating an offer that has become effective. In assuming that article 16 governs a revocability issue in our American client's transaction, we assume that
the other party's state has not made an article 92(1) declaration excluding the CISG Part II contract formation
rules (the United States has not made such a declaration). We also assume that the parties have not somehow
opted out of article 16 by way of article 6, which allows the parties to exclude the application of the CISG
altogether or exclude any of its provisions except article 12. We also assume that the non-American party's
state has not made an article 96 declaration that, pursuant to article 12, eliminates the article 16 provision
indicating that a firm offer need not be in writing in order to be effective. (The United States has not made
an article 96 declaration).
76. John O. Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention
§ 142, at 160 (3d ed. 1999).
77. See Peter Schlechtriem, Formation of the Contract, in Commentary on the UN Convention on the
International Sale of Goods (CISG) 97, 120-21 (Peter Schlechtriem ed., 2d ed. 1998).
78. In a sentence that obviously deals with expiration, article 18(2) provides that an "acceptance is not
effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is
fixed, within a reasonable time." CISG art. 18(2) (emphasis added).
Note, by the way, that under article 18(2) (first sentence), an acceptance does not become effective and
form a contract until the acceptance reaches the offeror. Although the offeree's dispatch of his acceptance
cuts off the offeror's power to revoke under article 16(1), it does not yet form a contract.
80. INIDROIT Principle of International Commercial Contracts art. 2.4 cmt. 2(a) (1994) [hereinafter
"UNIDROIT Principles" ].
81. CISG article 7(1) provides that in interpreting the CISG, a tribunal must have regard for the
international character of the CISG and the need to promote uniformity in its application, COSG art. 7(1). Using the UNIDROIT articles and comments in interpreting the CISG would seem to be a good way to apply
international rules, rather than domestic rules, and thus enhance uniformity and predictability in the legal
treatment of international sales. See Alejandro M. Garro, The Gap-filling Role of the UNIDROIT Principles
in International Sales Law: Some Comments on the Interplay Between the Principles and the CISG, 69 Tul.
L. Rev. 1149, 1154, 1189, 1190 (1995).
82. See, e.g., Honnold, supra note 76, § 143.1 at 163; Schlechtriem, supra note 77, at 121; Sono, supra
note 74, at 479. Honnold suggests that this rebuttable presumption is the best way to give effect to both (1) the fact that the
1978 UNCITRAL draft (which was ultimately adopted) rejected a Working Group draft providing that an
offer cannot be revoked if it states a fixed time of acceptance, and (2) the fact that the final version retained
a reference to "a fixed time for acceptance." See Honnold, supra note 76, § 143.1 at 163.
84. Disputes are likely to arise when the offeror believes that her offer is revocable and the offeree
assumes that it is irrevocable. Disputes are unlikely if both parties regard the offer as revocable, or both
parties regard the offer as irrevocable, or the offeror believes her offer is irrevocable and the offeree assumes
that it is revocable.
85. CISG article 9 determines when the parties are bound by a usage of trade. Unless a usage was
agreed to by the parties, it is not binding if it was not a regularly observed usage in an international trade. See CISG art. 9.
88. The comments to UNIDROIT Principles article 2.4 suggest that the offeree's acts of reliance do not
make the offer irrevocable unless they should have been foreseen by the offeror. See UNIDROIT Principles
art. 2.4 cmt. 2(b).
89. See Honnold, supra note 76, § 144, at 164, see also UNIDROIT Principles art. 2.4 cmt. 2(b), illus.
90. See Albert H. Kritzer, Guide to Practical Applications of the United Nations Convention on
Contracts for the International Sale of Goods 167-68 (1989) (quoting various authorities); see also
UNIDROIT Principles art. 2.4 cmt. 2(b).
91. The UNIDROIT comments refer to acts which the offeree must have "performed" in reliance and
provide a series of examples, all of which involve positive actions. See UNIDROIT Principles art. 2.4 cmt.
93. Uniform Commercial Code, [New] Revised Article 2, Sales: Discussion Draft (April 14, 2000)
(American Law Institute 2000) [hereinafter "P. Rev. U.C.C." ].
94. Id. § 2-205.
95. Id. § 2-103(a)(34).
96. Id. § 2-103(a)(1). Even if the proposed firm offer rule is not enacted, a new federal statute (effective
October 1, 2000) provides that the respect to any transaction in or affecting interstate or foreign commerce,
a record or signature cannot be denied legal effect solely because it is in electronic form. See Electronic
Signatures in Global and National Commerce Act, Pub. L. No. 106-229, §§ 101(a), 103(a)(3), 106, 114 Stat.
464, 464, 468, 472 (2000). See also Uniform Electronic Transactions Act § 2, § 3(b)(2) and cmts. 4, 7, §
7 (2000) (containing provisions similar to those of the federal statute).
97. The present UCC defines "writing" to include any intentional reduction to tangible form. See U.C.C.
§ 1-201(46) (2000).
98. The purpose to exclude oral offers is expressed in id. § 2-205 cmt. 2.
99. See Honnold supra note 76 at 161 n.6 § 142, at 161 n.6 (3d ed. 1999) (merely noting, without
taking a position on the issue, that law revision bodies in other common law countries have proposed the
elimination of formal writing requirements for firm offers).
100. P. Rev. U.C.C. § 2-205.
103. Uniform Commercial Code, Revised Article 2, Sales: Proposed Final Draft (May 1, 1999) § 2-204
cmt. 2 (American Law Institute 1999). In this May 1, 1999 draft, the firm offer rule was in section 2-204,
rather than 2-205. The draft of April 14, 2000 omits the comments to its firm offer section (section 2-205).
104. See U.C.C. § 1-102(2)(c) (200).
105. See id. § 1-102(2((a).
107. In the absence of structural reasons or strong policy reasons for deviating from the CISG, the UCC
should be in harmony with the CISG. All other things being equal, it is advantageous (for both merchants
and lawyers) to have the same rules govern domestic and international sales. See Linda J. Rusch, The
Relevance of Evolving Domestic and International Law on Contracts in the Classroom: Assumptions About
Assent, 72 Tul. L. Rev. 2043, 2062 (1998) (suggesting that any revision of UCC Article 2 that does not take
into account legal developments in the international sphere risks adopting idiosyncratic rules that will not be
serviceable under the demands of the global economy); Peter Winship, Domesticating International
Commercial Law: Revising U.C.C. Article 2 in Light of the United Nations Sales Convention, 37 Loy. L.
Rev. 43, 47, 92 (1991) (arguing the eliminating differences between UCC Article 2 and CISG reduces legal
108. Assume that the offeree is a buyer. If she is allowed a long time in which to make up her mind, she
can wait until the market price reaches a point well above the price stipulated in the seller's offer, and then
accept the offer, buy the goods from the offeror at the offer price, and resell the goods at the new and higher
market price. If the market price does not rise but instead declines after the offeree receives the offer, she
can reject or simply ignore the offer and purchase similar goods at the new and lower market price. Unless
it is curtailed by an early expiration date, opportunistic speculation may also be possible when the offeree is
110. How would a New York offeror know whether the offeree is located in such a country? If it is not
practical for the offeror to consult his attorney on each international transaction, the attorney could give him
a (continually updated) list of the countries that have ratified the CISG, along with effective dates. If his
offeree is located in a country in which the CISG is not yet effective, the offeror should simply assume that
the transaction might be governed by the domestic law of the offeree's country and advise the offeree to ask
her own lawyer how irrevocability could be achieved under the law.
Institute of International Commercial Law - Last updated March 26, 2004