Question

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. Sam said that he would need some time to think about it. Accordingly, Hank wrote on a sheet of paper as follows: I, R. Hank, agree to sell to F. Sam 1987 Nissan Bluebird for $ 8,000, usual financing terms apply. In exchange for Mr. Sam’s promise to give this offer due consideration, I agree to hold this offer open until Friday, noon, September 24” (signed) R. Hank, (dated) Monday, September 20.

Sam took this document home with him and on Tuesday morning Hank was offered $ 10,000 for the car by Brown which he accepted. He immediately wrote Sam a letter revoking the offer. In the meantime, Sam decided to accept the offer and, in the meantime, sent Hank a letter to that effect on Monday evening. This letter was addressed to hank and stated, “ After due consideration of your offer to sell me a 1987 Nissan Bluebird I hereby accept, delivery to be at my home, Friday, September 24 at 5.00 p.m.” signed, F. Sam. Sam received the letter of revocation on Wednesday morning. Hank received the letter of acceptance on Thursday afternoon. On Thursday morning Hank discovered that Brown was bankrupt and thus could not go through with the deal. He phoned Sam and told him to ignore the letter of revocation. Sam responded that while he had sent his letter of acceptance, he had changed his mind since he had lost his job that morning and could no longer afford to purchase the car. Hank insisted that Sam go through with the deal and hung up. He received the letter of acceptance about three hours after this telephone call.

Hank then took the vehicle on the specified Friday with the intention of delivering to Sam, but on the way, he fell asleep at the wheel and the car was destroyed in the resulting crash. In the meantime, Sam discovered that he could resell the car for $ 10,000 and so was looking forward to the delivery. When the car was not delivered, he sued Hank for breach of contract. Sam comes to you, his lawyer, asking you to explain the legal position of the parties, how would you respond?

Answer 1

As there was a contract between Hank and Sam for Sale/purchase of Car finally, there has to be delivery of car and payment by Sam to Hank to complete the contract.

As a lawyer of SAM, he can sue HANK for his all entitlement due to breach of contract:

- He can demand his CAR, may be other in similar condition as find of earlier one at the time of his visit for the negotiated price of $ 8,000/-.

- Since car is destroyed, it should be very difficult to arrange similar Car. and if it so, SAM can ask HANK to indemnify for his loss due to breach of contact, i.e., $ 2,000/-. (as an option to sale car at $ 10,000/- available at his hand)

This is my personal view. and one may have different view.

Thanking you..