Sara, a wholesale fruit dealer, sent the following letter to Bud, a fruit merchant: “Feb. 1, offer 1,000 boxes of Los Angeles, San Gabriel oranges, at $10.60 per box, F.O.B. Los Angeles: March delivery. Unless I receive your acceptance by 2 P.M. on Feb. 4, I will dispose of them elsewhere. (Signed Sara).” Sara’s letter was received by Bud on Feb. 2, at 3 P.M. At 1 P.M. on Feb. 2, Sara mailed Bud the following letter. “I regret to inform you that I am compelled to withdraw my offer dated Feb. 1.” Sara’s second letter was not received by Bud until Feb. 3. Meanwhile at 5 P.M. on Feb. 2, Bud mailed the following letter to Sara: “I accept your offer dated Feb. 1.
(Signed Bud).” Because of a severe snowstorm, which disrupted all means of communication, Bud’s letter was not delivered to Sara until 4 P.M. on Feb. 4.
(a) Is there a contract between Sara and Bud?Explain.
(b) Assume that the words “Unless I receive your acceptance by 2 P.M. on Feb 4, I will dispose of them elsewhere” were not included in Sara’s Feb. 1 letter to Bud. Is there a contract between Sara and Bud? Explain.
a. This does not make a contract between Sara and Bud as Sara had withdrawn the offer at 1 P.M. on 2 Feb which was before Bud had accepted it which was 5 P.M. on 2 Feb. So when the offer is withdrawn before the acceptance for the same then it isn't a valid contract. As per the mailbox rule of a contract the withdrawal of the offer is done before the acceptance is dispatched hence this does not form a contract. If the withdrawal was done after Bud would have accepted the offer then withdrawal would not have been considered and the contract would have been valid.
b. It still does not form a contract because the offer was withdrawn before the limit given for last day to end the offer. the offer, withdrawal of offer and acceptance of the offer, all took place before 4 Feb hence the presence of this date does not make a difference on the forming of the contract or not.
Sara, a wholesale fruit dealer, sent the following letter to Bud, a fruit merchant: “Feb. 1,...
Hank, a car dealer owned a 1987 Nissan Bluebird and put the following ad in the newspaper: “1987 Nissan Bluebird, good shape, $ 10,000, “accompanied by his phone number. Sam, a regular customer of Hank, saw the ad and went to Hank’s car lot to see the car. After some discussion, Sam said that he would pay $5,000 for it, but Hank said that it was not enough. He said that he would sell it for $ 8,000 including financing....