On January 1, 2025, Juan, an office supply dealer, mailed a written and signed offer to sell 5,000 pens at $1 per pen to Pat’s Corporation. The offer stated that it would “remain open for 15 days” and that it would “not be withdrawn prior to that date.” Five days later, Juan noted an increase in the market price of pens to $2 per pen and immediately mailed Pat’s a letter revoking his offer which was received by Pat’s two days after mailing.

Pat’s ignored Juan’s letter revoking the offer and sent Juan a letter accepting the original offer on January 14, 2025. The letter was not received by Juan until January 20th due to a delay in the mail. Pat’s demanded delivery of the pens according to the terms of the January 1st offer but Juan has refused. Assume Juan and Pat are merchants. Can Juan revoke his offer?

Question

On January 1, 2025, Juan, an office supply dealer, mailed a written and signed offer to sell 5,000 pens at $1 per pen to Pat’s Corporation. The offer stated that it would “remain open for 15 days” and that it would “not be withdrawn prior to that date.” Five days later, Juan noted an increase in the market price of pens to $2 per pen and immediately mailed Pat’s a letter revoking his offer which was received by Pat’s two days after mailing.

Pat’s ignored Juan’s letter revoking the offer and sent Juan a letter accepting the original offer on January 14, 2025. The letter was not received by Juan until January 20th due to a delay in the mail. Pat’s demanded delivery of the pens according to the terms of the January 1st offer but Juan has refused. Assume Juan and Pat are merchants.  Can Juan revoke his offer?

BlackTom AI · Accepted Answer

First, let’s restate the scenario to ensure clarity: Juan, a merchant, sent a written and signed offer on January 1 to sell 5,000 pens at $1 each, promising to keep it open for 15 days and not withdraw it before that date. Five days later, Juan attempted to revoke by mail, which Pat received later. Pat, a merchant, accepted the offer on January 14, even though Juan’s revocation had been sent earlier. The acceptance was delayed in transit and reached Juan on January 20. The question asks whether Juan can revoke the offer.

Option 1: "No, because Juan and Pat are both merchants." While the fact that both parties are merchants matters for the timing and enforceability of certain contracts under the UCC, this choice is incomplete and potentially misleading. The core issue is whether the offer was a firm offer and whether it could be revoked within the 15-day period, not merely the merchant status of the parties. Therefore, stating this as the sole reason for irrevocability is not fully correct.

Option 2: "Yes, Pat's did not pay consideration to keep the offer open." Under traditional contract law, an option contract requires separate consideration to keep an offer open. However, under the UCC’s firm offer rule for the sale of goods, a written and signed promise by a merchant to keep an offer open can be irrevocable for a stated period (not to exceed three months) without additional consideration. Since the offer here was a signed, written firm offer by a merchant to keep the offer open for 15 days, this option’s emphasis on consideration is not controlling in this context. Consequently, this statement is incorrect.

Option 3: "No, Juan made a firm offer by a merchant promising to keep the offer open and Pat accepted within the time period of the offer on January 14.." This matches the UCC 2-205 firm offer rule. A signed, written promise by a merchant to hold an offer open is irrevocable for the time stated (here 15 days), and Pat’s acceptance on January 14 occurred within that window. Under the mailbox rule, acceptance is effective upon dispatch, i.e., when Pat mailed the acceptance, which was January 14, before the revocation was effectively received. Therefore, a contract was formed, and Juan cannot revoke the offer.

Option 4: "Yes, Pat's acceptance was received too late." This option misreads the timing rules. Even if Pat’s acceptance was delayed in transit and arrived after the revocation was sent, the contract can still be formed if acceptance was communicated within the offer period and under the mailbox rule, acceptance is effective on dispatch. Since the acceptance was mailed within the 15-day open period, and the revocation’s effect as of receipt differs from the moment of acceptance, the late receipt does not invalidate the formation of the contract as long as the acceptance occurred within the open period. Thus this statement is incorrect.

In summary, the correct line of reasoning hinges on the UCC firm-offer rule: a signed, written promise by a merchant to keep an offer open for a stated period is irrevocable during that period, and acceptance dispatched within that period creates a binding contract. The abandoned emphasis on consideration or on the mere fact that the acceptance was received late does not defeat contract formation in this scenario. The result is that Juan cannot revoke the offer, because there was a firm offer open for 15 days and Pat’s acceptance was made within that window and effectively formed the contract upon dispatch.

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