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a. Rejection or Counteroffer Normally, an offer terminates if the offeree rejects it. A counteroffer is at once (1) a rejection of the original offer and (2) a new offer by the former offeree, who is now the offeror. At common law, any purported acceptance that does not mirror the offer’s terms exactly is a counteroffer. Under Article 2, a purported acceptance that does not precisely mirror the offer’s terms may nonetheless be an acceptance, and Article 2 sets forth detailed rules to determine just what the operative contractual terms are in this case. [ See The Battle of the Forms, infra .] b. Lapse of Time An offer terminates by lapse if the offeree does not timely respond to the offer. The offer itself may set the deadline. If it does not, then the deadline is a reasonable time, considering the overall circumstances surrounding the negotiation. c. Revocation With very few exceptions, the offeror may revoke the offer at any time before acceptance, even if the offeror has promised to keep the offer open for a specified time. Once the offeree learns that the offer has been revoked, the offer immediately terminates. Revocation may be direct or indirect. Direct revocation means that the offeror notifies the offeree directly that the offer has been revoked. Indirect revocation occurs if the offeree learns of the revocation from a reasonably reliable source other than the offeror ( e.g. , the offeree learns that the offeror has sold the subject of the offer). Options An option is a distinct contract unto itself. In a basic option, the offeree furnishes consideration to the offeror. In exchange, the offeror agrees to keep an offer open for a specified time. If there is a valid option, then for the specified time, the offer is irrevocable. [ See Restatement (Second) of Contracts §§ 25, 37, 87.] A Merchant’s Firm Offer under UCC Article 2 UCC Article 2 introduced the doctrine of a merchant’s firm offer. This doctrine applies if a merchant offers, in a signed writing, to buy or sell goods, provided that the writing’s terms give assurance that the offer will be held open. Here, even without consideration , the merchant’s offer is irrevocable for the lesser of (1) the time stated in the writing or (2) if no time is stated, a reasonable time. However, in no event will the offer remain irrevocable for longer than three months after the offeree’s receipt of the offer. If the term of assurance appears on any writing supplied by the offeree, the offeror must separately sign the term ( e.g. , by initialing it). Of course, if a promise to keep an offer
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