What distinguishes a firm offer from an option contract?

A firm offer is defined under the Uniform Commercial Code (UCC), which applies specifically to merchants. It signifies a written and signed offer by a merchant that remains open for a specified time, or if no time is stated, for a reasonable period. Importantly, a firm offer does not require consideration to be binding; this is a critical distinction from option contracts.

In contrast, an option contract is a separate agreement where the offeror is bound to keep an offer open for acceptance by the offeree for a specified time, and this typically requires consideration. Without consideration, the option cannot be enforced.

The correct choice highlights that a merchant's firm offer operates without the necessity of consideration, making it particularly advantageous for those engaging in commercial transactions. This feature of a firm offer allows it to create a reliable expectation for the offeree, enhancing the efficiency of commercial dealings.

In comparison, a firm offer does not inherently last indefinitely; it is bound by either a specified or a reasonable time unless revoked, which is another point that differentiates it from an option contract that may be structured differently. Thus, the characteristics of a firm offer and its independent nature with respect to consideration is what marks the distinction between it and an option contract.