Question

Answer this using the IRAC writing Format

I-Describe the issue at hand (the question being asked)

R-Describe the rule that is applicable in this situation

A-Apply the rule to the facts of yor situation

C-Draw a conclusion

Offer and Acceptance

Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer:

(a) Schmidt dies prior to Barry’s acceptance, and at the time he accepts, Barry is unaware of Schmidt’s death.

(b) The night before Barry accepts, fire destroys the equipment.

(c) Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt’s death.

(d) Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry’s estate accepts Schmidt’s offer within the stipulated time period.

Answer 1

(a) Answer: Although Barry is unaware of Schmidt’s death, however the contract becomes terminated on Schmidt’s death because the death of either the offeror or the offeree prior to acceptance automatically terminates a revocable offer and in the current scenario Schmidt dies prior to Barry’s acceptance thus no longer capable of carrying out a contract

(b) Answer: The contract becomes terminated at the point when the specific subject matter is destroyed prior to acceptance. In this case because Barry has not yet accepted, thus the contract is automatically terminated

(c) Answer: Although the $100 option causes the contract to become irrevocable, because Schmidt is no longer capable to deny or accept the offer, thus the contract is terminated

(d) Answer: When the offer is irrevocable, under an option contract, death of the offeree also does not terminate the offer. Thus Schmidt is under a legal obligation to sell the equipment to Barry’s estate because they have fulfilled the contract requirements.