A wholesaler sends a fax offering to sell up to 1,000 units at $7.50 each, a 25% discount off the $10 price, open for 7 days, with a signature that is not fully handwritten but initials are present. The wholesaler revokes on December 4. A retailer orders 1,000 units on December 5 at the discounted price. What is the value of the order placed by the retailer?

• A. $7,000
• B. $7,500
• C. $8,000
• D. $7,250

Answer: (B)

The key idea is the firm offer rule under the UCC: when a merchant makes a written offer to sell goods and signs it, the offer is irrevocable for the time stated (up to three months, but here seven days) even without consideration. The signature can be a signature or initials, as long as it shows intent to be bound.

Here, a merchant sent a fax offering to sell up to 1,000 units at $7.50 each, open for seven days, with initials accompanying the signature. The price reflects a 25% discount off $10, so $7.50 per unit. Because this is a firm offer, the revocation on December 4 does not destroy the offer during the seven-day window. The retailer’s acceptance on December 5 is timely within that period, forming a contract at the discounted price.

Therefore, the value of the retailer’s order is 1,000 units × $7.50 = $7,500.