What makes an offer irrevocable

What is a reasonable time? Civil Code Article , an irrevocable offer expires if not accepted within the time prescribed. Civil Code Article , if the offer is not an irrevocable offer, then the offer is a revocable one and may be revoked before it is accepted. Finally, according to La. Civil Code Article , a revocable offer expires if not accepted within a reasonable time. Sorting these out requires learning about contracts, options, and waivers. To begin, you need to know some basics of how a contract is formed.

As with anything involved with the law, contracts can be complicated matters. But the process can be simplified by breaking it down into three basic steps:. The central purpose of a contract is to create a binding agreement that can be enforced in court if there is a breach of contract.

Once a contract is formed—by an offer, acceptance, and consideration—it is essentially irrevocable. The term irrevocable does not mean that a party cannot refuse to perform its obligations under the agreement, but rather that it can be held financially liable in a court of law for such refusal. The only exception would be if the terms of the contract specifically state that one or both parties can revoke it in certain situations.

When someone talks about an irrevocable contract, they are often actually referring to an irrevocable offer—or, more precisely, a contract to make an offer irrevocable. As stated above, an offerer has the right to revoke an offer at any time before it is accepted by the offeree. However, the offerer can waive the right to revoke the offer by creating a contract that obligates them to hold the offer open, either for a specified amount of time or until a specified event occurs.

Although just about any contract offer can be made irrevocable, there are certain situations where irrevocable offers are common:. Option contracts. An option contract gives one party the right, or option, to either buy or sell something at some time in the future for a specified price.

With an option to buy, the potential buyer is not obligated to make the purchase, but the potential seller is obligated to sell: it is the buyer's choice. The reverse is true with an option to sell: the potential seller is not required to sell, but the potential buyer is required to buy.

This is common in real estate transactions involving a lease with an option to purchase. The property owner rents the property to the lessee with the option to purchase the property at a future time for a specific price. Such an offer to sell the property to the lessee is irrevocable. Waivers and releases. These are legal documents that give up some type of legal right.

Such documents are commonly used to cede the right to sue for personal injuries or other damages, to permit the use of photographs, to allow the disclosure of certain information such as financial or medical information , or to waive the right to file a lien against property. Waivers and releases typically contain provisions stating that the waiver or release is irrevocable. The aggrieved party's interest Illustration 5.

Timing of cure 6. Proper forms of cure Illustration 7. Suspension of other remedies 8. Effect of a notice of termination 9. Right of aggrieved party to damages Special characteristics of late performance 2. The need for a special rule on exemption clauses 2. Exemption clauses to be distinguished from forfeiture clauses 4. Exemption clauses and agreed payment for non-performance Illustration 5. Cases where exemption clauses may not be relied upon Illustrations 6.

The notion of force majeure Illustration 2. Effects of force majeure on the rights and duties of the parties Illustration 3.

Force majeure and hardship 4. Right to require performance of non-monetary obligations 2. Remedy not discretionary 3. Exceptions to the right to require performance a. Impossibility b. Unreasonable burden Illustration c. Replacement transaction Illustration d. Performance of an exclusively personal character Illustrations e. Right to performance in case of defective performance 2. Cure of defective performance 3. Judicially imposed penalty 2. Imposition of penalty at discretion of the court 3.

Beneficiary 4. Judicial penalties distinguished from damages and from agreed payment for non-performance 5. Form and procedure 6. Penalties imposed by arbitrators 7. Aggrieved party entitled to change of remedy 2. Voluntary change of remedy 3. Unenforceable decision 4. Termination even if non-performance is excused Illustration 2. Right to terminate the contract dependent on fundamental non-performance 3. Circumstances of significance in determining whether non-performance is fundamental a.

Non-performance substantially depriving the other party of its expectations Illustration Illustration b. Strict performance of contract of essence c. Intentional non-performance d. No reliance on future performance Illustration e.

Disproportionate loss Illustration 4. Performance overdue 3. Reasonable expectation of fundamental non-performance 2. Right to withhold performance pending adequate assurance of performance Illustration 3.

Termination extinguishes future obligations 2. Claim for damages not affected Illustration 3. Entitlement of parties to restitution on termination Illustration Illustration 2. Restitution not possible or appropriate Illustration Illustration 3.

Contracts to be performed over a period of time Illustration Illustration 4. Other rules applicable to restitution 5. Right to damages in general 2. Damages may be combined with other remedies 3. Aggrieved party entitled to full compensation 2. Damages cover loss suffered, including loss of profit Illustrations 3. Damages must not enrich the aggrieved party Illustration 4.

Damages in case of changes in the harm 5. Occurrence of harm must be reasonably certain 2. Determination of extent of harm Illustration 3. Amount of harm presumed in case of replacement transaction 2.

Amount of harm presumed when no replacement transaction 2. Determination of "current price" 3. Contribution of the aggrieved party to the harm 2. Ways of contributing to the harm Illustrations 3. Apportionment of contribution to the harm Illustrations 4. Duty of aggrieved party to mitigate harm Illustrations 2. Lump sum compensation for failure to pay a sum of money 2. Both of these scenarios reveal Agents who do not understand what an irrevocable provision means in the agreement and they may have caused their clients to be exposed to liability.

Although Party A is at fault for entering into multiple agreements, it is the agent who is responsible to advise Party A and Party A should have been advised about the effect of the irrevocable offer by the agent. If you have questions about irrevocable dates, or if you are purchasing or selling a home and require legal help, contact real estate lawyer Noah Potechin. Our Real Estate Litigation team is also here to help if you need assistance with real estate related disputes.

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Generally, an offer can be accepted at any time until it […]. The Referred to Law Firm. What is an Irrevocable Date and Why is it Important?