September 12th, 2023 | Uncategorized

Irrevocability, Why Does It Matter and Why Should You Care … Or Not?!

The irrevocability period of any Agreement of Purchase and Sale simply refers to the time given by one side (Buyer or Seller) to the other, to review their offer and decide.  The 3 choices are always the same, namely, Accept, Reject or Counter (with your changes).

So, what’s a standard irrevocability period?  

Well, I’d like to say 24 hours, but that’s not so much the standard but rather what is requested.  And for good reason!  Seems reasonable to request one day to allow for proper presentation of an offer and review of the same, no?  

So, why then do we see so many offers with shorter irrevocable periods?  How short?  As short as a few hours even!  And moreover, should we be entertaining such offers or be offended?

So, let’s answer the first question, why do some offers have super short irrevocable periods?  Here are a few reasons in no particular order:

• The offer is strong and wishes to ‘take’ it by eliminating the possibility of any competing offers coming in (i.e. from the time of submission to when the offer expires – i.e. is irrevocable until)
• The party submitting the offers has another decision hinging on the outcome of this offer
• The parties have already discussed much of the offer verbally so the offer on paper is simply a formality at that point

But, the primary reasons tend to be to eliminate the possibility of competing offers being submitted.  

Next question, should we be entertaining such offers or be offended?  Here’s a quick summary:

• In short, you should entertain any and all offers
• If the party submitting/countering etc. is simply unreasonable (aka ‘out to lunch’) – whatever, just say ‘no’ and move on, no harm done
• Should you take offence?  No!  Certainly not if the offer is good … it’s just the name of the game, the timeline of the offer is one of the very few things the submitting party can control … so why wouldn’t they submit it with a strategy in mind, right?
• What if the offer is absolute garage, can I tell them off?  Up to you … but why waste your breath?  There’ll always be tire kickers/opportunists etc.  But, just because they enjoy wasting their own time doesn’t mean you should waste yours … just chuckle and move forward!

Again, the irrevocability period of any Agreement of Purchase and Sale simply refers to the time given by one side to the other, to review their offer and decide.  The 3 choices are always the same, namely, Accept, Reject or Counter.  The duration provided by the submitting party can simply be a strategic decision based on their respective offer – that’s it and that’s all … don’t take offense!