## Facts

- Beulah Friedman sponsored an offering plan to convert a 360-unit residential apartment building to cooperative ownership.
- Under the plan, tenants could acquire their apartments by purchasing shares (securities) in the cooperative corporation and receiving proprietary leases.
- On April 14, 1981, Friedman issued the sixteenth amendment to the offering plan, increasing the purchase prices for unsold apartments.
- The same amendment stated: “each tenant is granted the nonexclusive right to purchase his or her apartment at the [former] price . . . for a period of thirty (30) days from the presentation of this Sixteenth Amendment.”
- Before the 30-day period expired and before Viola Sommer (a tenant) accepted, Friedman orally told Sommer that the offer for Sommer’s apartment was withdrawn.
- On May 12, 1981—still within 30 days—Sommer sent a letter attempting to accept the amendment’s offer at the former price.
- Friedman refused to sell at the former price, and Sommer sued for specific performance or damages for breach of contract.
- The trial court granted summary judgment to Sommer, and the Appellate Division affirmed.
- Friedman appealed to the New York Court of Appeals.

## Issues

1. Whether the sponsor’s signed, 30-day “nonexclusive right to purchase” was an irrevocable firm offer under U.C.C. § 2-205, despite no consideration.
2. Whether an agreement to purchase a cooperative apartment is governed by the Uniform Commercial Code (as a sale of securities) rather than traditional real property contract rules.
3. Whether the sponsor’s revocation, communicated before the tenant’s acceptance, terminated the tenant’s power of acceptance so that no contract was formed.

## Decision

- The Court of Appeals reversed the Appellate Division, with costs.
- The court granted summary judgment to Friedman and dismissed Sommer’s complaint.
- The court held that the sponsor’s April 14 offer was revocable and was effectively withdrawn before Sommer’s attempted acceptance.
- The court concluded the amendment did not give the statutory “assurance” required for a U.C.C. § 2-205 firm offer because it expressly made the tenant’s right “nonexclusive.”

## Legal Principles

- A contract to purchase a cooperative apartment is treated as a sale of securities in a cooperative corporation and is governed by the Uniform Commercial Code.
- At common law, an option to keep an offer open requires consideration; the parties conceded there was no consideration here, so the offer was revocable unless made irrevocable by statute.
- Under U.C.C. § 2-205, an offer by a merchant in a signed writing is not revocable for lack of consideration only if the writing “by its terms gives assurance that it will be held open” for the stated time.
- Language granting a “nonexclusive” right to purchase is inconsistent with the assurance required by U.C.C. § 2-205 because it reserves to the offeror the ability to sell to others during the stated period.
- A communicated revocation made before acceptance terminates the offeree’s power of acceptance; a later attempted acceptance does not form a contract.
- Even where merchant status is not disputed, the firm-offer rule does not apply unless the writing clearly states that the offer will be held open.

## Conclusion

The New York Court of Appeals held that the sponsor’s 30-day “nonexclusive” tenant right to buy at the former price was a revocable offer, not an irrevocable firm offer under U.C.C. § 2-205, and because the sponsor withdrew the offer before the tenant accepted, no enforceable contract was created.


Friedman v. Sommer, 471 N.E.2d 139 (1984)