On May 1, Newtown Motors, a used-car dealer, wrote a letter to O'Reilly,which stated, "We have a 1969 Pontiac Firebird in mint condition that we will sell you for $12,500 at any time before June 1. [Signed] Newtown Motors.". By May 15, having heard
nothing from O'Reilly, Newtown Motorssold the Firebird to another party. On May 25, O'Reilly told Newtown Motorsthat he accepted the offer and tendered $12,500. When Newtown Motorstold O'Reilly it had sold the car to another party, O'Reilly claimed Newtown Motorshad breached their contract. Is Newtown Motorsin breach? Explain.
Yes. Under UCC 2–205, a merchant offeror, who in a signed writing gives as¬surance that an offer will remain open, creates an irrevocable offer (without payment of consideration) for the time period stated in the assurance up to a three-month period.
Newtown Motors, as a merchant, was obliged to hold the offer (which had been made in a signed writing—the letter) open until June 1. O'Reilly's acceptance of the offer beforeJune 1 created a valid contract, which Newtown Motorsbreached when it sold the Firebird to a third party.
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