Irrevocable

Irrevocable refers to an action, agreement, or designation that cannot be canceled, changed, or undone once it has been made. In commercial real estate, irrevocable agreements appear in contexts such as irrevocable letters of credit (used as security deposits or performance bonds) and irrevocable offers or options.

Irrevocable instruments provide a high degree of certainty to the receiving party. For example, an irrevocable letter of credit guarantees that the issuing bank will honor a draw regardless of disputes between the landlord and tenant. Understanding when and how irrevocability applies is critical in high-stakes CRE negotiations.