Question

Mr. Liu, who works as in-house counsel at Louis Vuitton in New York and lives on Manhattan, is fairly rich. His childhood friend Josh, who likes to hang out in New York City, (NYC) often comes to visit Liu in New York from his home in Kentucky. Liu likes Josh but he does not like that Josh is becoming a "free rider.” Whenever Josh comes to NYC, he expects Liu to take him to the fancy restaurants, hot clubs, expensive concerts and exclusive comedy shows. On top of that, Liu feels that Josh is overly comfortable in Liu's house. It does not bother him that Josh eats whatever he finds in the fridge but it does bother him that Josh always orders expensive pay-per-view movies and calls his friends in London. Liu is shocked just how greedy and inconsiderate Josh is. Liu decided to play a little game to see how low Josh could go. Among other things, Liu owns a Bentley vehicle worth $200,000. Every single time Liu and Josh get together and they cruise around Manhattan in Liu's Bentley, Josh says: "Liu, I love your car. I wish I had a car like that." Next time Josh came to visit Liu, Liu told him: "Because you were such a good friend to me all these years I promise to offer you my car if you promise you will not expect me to pay for everything when you come to NYC, you will not order pay-per-view movies and call long distance from my apartment, and you will pay me back $10,000 that you owe me since last year. So what do you think? Do you accept my proposal?" I will have documents to transfer the title of the vehicle ready for your signature tomorrow. Josh seemed shocked and overly excited. He did not say a word. He just ran out and called his dad on the cellular phone. He said: "Dad, you can sell that car you wanted to give me. I do not need it anymore. I am about to get Liu's Bentley just like that. For real!" Dad called Liu to thank him but Liu was in the shower so he just left him a message. Liu heard the message 5 minutes later. Meanwhile, Josh went on the Internet and ordered new rims for the Bentley. Liu actually did not plan to give his Bentley away. He just wanted to see just how far Josh is ready to go with his greed and whether Josh even remembered that he owed Liu money. He told that to Josh about an hour later, but Josh did not want to hear it. Josh said: "Whatever dude, we got a deal.” Is Josh right? Who gets the Bentley? Please address all relevant issues and relevant legal rules related to formation of contracts.

Answer 1

There is no contract between Josh and his friend Liu. For the formulation of a valid contract, it is important to have the following elements

Offer and acceptance= In the contract there was an offer made by Liu to sell his can in return of $10000 and some conditions applied to Josh but there was no acceptance by Josh.

Intend to make a legal obligation= For any contract to be valid, it is important that all the parties to the contract must have an intent to form the legal obligation As in case of Lui, he was only trying Josh and checking him thus there was a missing intent to form the legal relationship between Liu and Josh.

If we look at the above two conditions that are offer and acceptance, and intent to form the legal obligations, both are missing in the stated case. Thus there was no legal contract between two friends and the actual owner will still be Liu.