Which of the following is NOT an exception to the rule that an offer may be revoked before acceptance?

• A. An option contract
• B. A signed, written firm offer by a merchant
• C. Starting to perform in a unilateral contract
• D. An advertisement inviting negotiations

Answer: (D)

The main idea is that an offer can be revoked before acceptance, but certain situations make an offer irrevocable. An option contract keeps the offer open in exchange for consideration, so the offeror cannot revoke during that period. A signed, written firm offer by a merchant under the UCC 2-205 also binds the offer open for the stated time (or for up to three months if no time is stated). In a unilateral contract, starting performance operates as acceptance, so the offer cannot be revoked once the offeree has begun performing. An advertisement inviting negotiations, however, is generally just an invitation to negotiate and not an offer itself, so it isn’t an exception to the revocation rule.