Firm Offer is a definite offer to buy something at a fixed price. It is a kind of proposal, which is sure to hold firm and performed by the offer provider on the terms and conditions suggested by him. It is a definite and binding proposal, in writing, to enter into a contractual agreement. The offer may be given by any intending buyer or a seller of goods. The offer provider must fulfill his obligation, he cannot refuse it. It is an offer that must be held open for a set period of time. Firm
A firm offer is an offer that will remain open for a certain period or until a certain time or occurrence of a certain event, during which it is incapable of being revoked. If the offeree rejects, fails to accept the terms of the offer, fixed or otherwise, or makes a counter-offer, then the original offer is terminated. As a general rule, all offers are revocable at any time prior to acceptance, even those offers that purport to be irrevocable on their face. Firm offers will only last for the amount of time that is listed in the offer.
A firm offer is an offer in writing where the offer cannot be revoked, withdrawn, or amended for a specific period of time. When goods are sold, a firm offer is considered to have taken place when there has been a signed promise to keep the offer open and the merchant involved in the sale qualifies as a merchant under the Uniform Commercial Code. This brings in a slight variation to the usual principle of contract law. Usually in any contract, an offer is valid when it is being accepted and until then there is no legal consequence even if the offer is later withdrawn. In many cases, customers will request a firm offer so they can be sure of their pricing over a set period of time. By in the case of a firm offer such an offer cannot be revoked for a specific period of time. Many merchants also ask their suppliers for firm offers.
Although there are several advantages to firm offers, the risk is that the circumstances may change, meaning that the original offer would no longer be reasonable. For example, the raw material cost may increase or your inventory may run out, meaning you cannot sustain the price you originally offered. Should the offer not specify a time limit, the offer will remain open for three months maximum. An example of a firm offer in writing might read, “the seller agrees to offer 100 units of furniture for a price of $50 per unit, with this offer good for 60 days.” The time limit for a firm offer can be exceeded by issuing a new firm offer after the first one expires or by entering into an option contract.