Restatement (Second) of Contracts · Section § 87
Overview of the doctrine of offer and acceptance under the Second Restatement of Contracts, focusing on irrevocable offers.
Source: Restatement Restatement (Second) of Contracts § § 87
An offer is binding as an option contract if it: (a) is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or (b) is made irrevocable by statute.
Section 87 outlines that an offer can become binding if it meets specific criteria, such as being in writing and signed, or if it is made irrevocable by law. This helps ensure that certain offers can be trusted and enforced in legal agreements.
The section emphasizes the enforceability of option contracts, which provide a form of security for offerees.
It highlights the importance of written and signed offers in establishing binding agreements.
Illustration 1
If an offeror promises to hold an offer for a set period of time in writing and receives consideration, the offer cannot be revoked during that time.
Illustration 2
A statutory provision may also make an offer irrevocable, ensuring that the offeree has a set time to respond.
This case illustrated the application of § 87 in relation to irrevocable offers, demonstrating that a subcontractor's offer could not be revoked after the general contractor relied on it for their bid.
Understanding § 87 is crucial for parties engaged in contract negotiations, as it clarifies the conditions under which offers become binding. It helps protect offerees from sudden revocation and provides a framework for the enforceability of offers in commercial transactions.