A firm offer is an irrevocable offer presented in a verified medium which is good for a specific period of time. The offer may be an offer to buy or sell. If accepted, the firm offer is used to develop a contract which can be signed by all parties involved, thus committing them to the agreement. The laws surrounding firm offers vary from nation to nation, but generally the term “firm offer” is used to describe an offer made by a merchant, with the offer being directed at a consumer or another merchant.
Historically, only written and signed offers were considered firm offers. However, the law has shifted in many areas of the world, and today such an offer must simply be “authenticated,” allowing for the use of other media. For example, a firm offer may be transmitted electronically with a mark which acts as a signature. The language of the offer must also clearly indicate that it is firm.
Unless specified otherwise, a firm offer lasts 30 days. After this period, the offer is considered void. If a party wants to accept the offer after this period, it must request another offer. The set time period is designed to ensure that the offer is not allowed to float eternally, and to create reasonable expectations and limits for both parties. If a caterer submits a firm offer for a job, for example, it wants to know if it will be rejected so that it can submit other offers for the same period of time and avoid missing out on business while waiting to hear back on an offer.
Both goods and services can be included in a firm offer. The offer usually describes in detail what is being offered and at what price, and provides other specifics which will be used to structure a contract. For example, it might state that a caterer is offering to handle a wedding banquet for 100 people, or that a merchant is offering to purchase a set number of units at a given price.
In the United States, the Uniform Commercial Code (UCC) provides guidelines for firm offers, among many others thing. The Code is designed to make sure that commercial transactions are handled consistently and smoothly across the United States, and to confirm that people understand the underlying terms and conditions for contracts, offers, and other activities undertaken by merchants of all sizes.