Question

Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's wife that she is willing to pay an amount of sso.000 for the house. Delighted to hear this, John's wife tels him the good news. John immediately calls up Sue and accepts her offer. Is there a binding contract? A. Yes, because there is valid consideration. O B. Yes, because a third party has communicated the terms of Sue's offer to John and that John had accepted the same. O C. No, because the offeror had not communicated the terms of the offer to the offeree. OD. No, because the contract is still not signed by both the parties.

Answer 1

ANSWER (c)

A contract is legally binding is it has a clear offer and acceptance. An offer has to be given to the offerer from the offeree with legal intention. Since the Sue was expressing her willingness to pay 50,000 by confiding in the wife and not John itself, it will be considered as an 'invitation to negotiate', and not a direct offer till Sue and John discuss upon this and directly agree on the price since they were still in the negotiating phase, and not through a third person.