Memo

To: Salespersons

From: Alexander Walden

CC:

Date: 12/24/99

Re:


Legal Restrictions on Salespractices

It was brought to my attention that many of the salesrepresentatives use firm offers as sale practices. Those firm offers have to be used with caution.

By definition a Firm Offer is an irrevocable offer to sell or buy goods by a merchant in a a signed writing which gives assurance that it will not be rescinded for up to three month.

The firm offer was created to protect the buyer from price changes. It puts a legal restriction on the seller. The seller may not change the terms of sale for a specified period. You, the seller, have to give a specified time period to the customer. The offer has to be written. This law applies to you because you are an merchant. A merchant is a person that regularly deals with the product and that has superior knowledge about the product.

Within that period, you may not change the terms of sale nor may you withdraw from the sale at all. Even if the customer shows no interest in the product, the offer will remain open for that specified period.

The projected customer may choose to buy our product or not. You, however, have to be able to deliver the product until the specified period expired. Therefore, be careful to whom you make that offer. It may be the case that you are not able to deliver under the stated terms, due to a supply shortage. This applies especially if you make that offer to a large number of people.