Question

While jogging around his suburb one morning, Pedro sees a speedboat parked outside a house. There is a sign posted on the boat’s windshield saying: “For sale $9,000, Text Andres on 0409876543. Direct buyers only!” A boat lover, Pedro calls the number advertised and leaves a voice message saying that he’s happy to buy the boat for $7,000. He also leaves his return number. Andres is busy all day, and only hears Pedro’s message the next morning. He calls Pedro back; he also leaves a voice message saying that Pedro’s price is too low, but he can get the boat for $8,000. That same day, however, another buyer sees the boat and makes a $9,000 cash offer to Andres on the spot. Andres takes the money, signs over the boat’s registration papers, and the buyer tows the boat away. Pedro passes by Andres’ house and sees that boat is gone. Panicking, he listens to his voice messages and hears Andres’ message for the first time. He calls Andres right away and told him in no uncertain words that he accepts his offer. Pedro now thinks he has accepted Andres’ offer so they now have a contract. When Pedro finds out that the boat has been sold to someone else, he gets very angry. He argues that he had already accepted Andres’ verbal offer, so he had no right to sell the boat to the other buyer. Does Pedro have a valid contract with Andres and he entitled to the boat? Explain with reference to all the elements of a valid contract. (Maximum 350 words)

Answer 1

Mr. Pedro does not have a valid contract with Andres .

We can understand this by referring to the elements for the valid contract.

1) Offer and Acceptance:- Contract unfolds when offer made by one party is accepted by the another party. The final offer should be clear, definite, complete and should be communicated to the offeree. Offer and acceptance should be ‘consensus ad idem’, i.e, it should be mutually agreed by both the parties . Here, Andres has given invitation to the offer for his boat. Pedro has given the offer which was counter offered by Andres but in return Pedro has never communicated the final acceptance to the Andres and hence acceptance has never happened in this case.

2) Consideration:- Consideration in a contract is again another important element. In the given case, definite amount of consideration has never been fixed and agreed upon.

3) Certainty:- The terms and condition being made in the contract should be stated and clear and understood by the parties of the contract. If the conditions of the agreement is not clear , then contract is not the valid contract. Here , the terms and condition of the contract has never been agreed upon like time of delivery, payment terms, delivery terms , hence certainity is questionable.

4) Capacity to contract:- The parties intended to contract must have legal capacity to contract. Here, we are assuming that both the parties are in capacity to make a legal contract.

5) Intention to create legal relation:- Parties involved in the contract must have an intention to create a valid enforceable contract. Here, Andres has not created any legal agreement with the pedro and hence intention to create legal relation has not been matched.

Thus, Pedro has not made a valid contract and he cannot question Andres on the sale transaction made by him.