Debco Corporation Contract with TMI – Business 100 Essay
Debco’s first claim, that its October 25 correspondence prevented the formation of a contract between Debco and TMI, is incorrect. Under the Sales Article of the UCC, a firm offer cannot be revoked for a specified time of up to 3 months, regardless of a lack of consideration. A firm offer must be made by a merchant in a signed writing. In this case, Debco’s October 12 order was a
firm offer because Debco, who made the offer, was a merchant and the order was in a signed writing. Therefore, Debco’s October 25 correspondence to revoke the offer was ineffective.
Debco’s second claim, that TMI’s October 31 corresponence was not an effective acceptance because it was not received by Debco until November 3, is incorrect. Generally, acceptance is effective when sent, unless
– offer specifies it is effective when received
– offer indicates date by which it must be received
– acceptance is sent by unauthorized means
– acceptance is sent by means not equal to or better than that used to communicate the offer.
In this case, Debco’s offer didn’t indicate date by which it must be received, and TMI’s acceptance was sent by mail, the same means that used to communicate the offer. Therefore, TMI’s acceptance was effective when mailed on October 31.
Debco’s third claim, that TMI’s October 31 correspondence was not an effective acceptance because it added payment terms to Debco’s purchase order, is incorrect. Under the Sales Article of the UCC, acceptance of a sale contract does not have to mirror the offer. Therefore, TMI’s October 31 acceptance was effective even though it added payment terms.