Question

I. (a) On October 1, Sam wrote to Byron, “I offer to sell you my pickup truck for $10,000 all cash payable on November 15, and will have it ready for delivery to you on November 15. This offer expires on October 20. [signed] Sam.” Byron received the letter on October 2. On October 17, Byron sent the following letter to Sam: “I am very much interested in your offer, but I am a little short of cash. I accept your offer to buy your truck for $10,000, and I will pay $5,000 cash on November 15 and the balance of $5,000 on December 15.” Because of a delay in mail delivery, Sam did not receive Byron’s letter of October 17 until October 21. On November 15, Byron came to take delivery of the pickup truck and tendered $5,000 to Sam. Sam refused to let Byron have the pickup truck. Does Byron have the legal right to receive the pickup truck? If so, what should Byron do to receive it? Explain fully.

(b) Assume that the facts in part (a) are the same, except that there was no delay in mail delivery and Sam received Byron’s letter of October 17 on October 19. Now does Byron have the legal right to receive the pickup truck? Explain whether the different date on which Sam received the letter of October 17 changes the situation and, if so, why.

II. (a) Owen owned a wooden house and hired Camila, a carpenter, to do carpentry repair work on the house. The agreed price was $5,000, to be paid on completion of the work. After Camila finished the work and sent Owen her invoice, Owen discovered Camila had not replaced some rotten wooden siding on the house that had been there since before she started working on the house. An estimate from another contractor showed that replacing the rotten siding would cost an additional $1,250. Owen told Camila that she (Camila) was supposed to have replaced the rotten siding as part of her contract and refused to pay her the $5,000. Camila told Owen that her contract did not cover this work and demanded payment of the $5,000. Owen then sent a check for $4,000 to Camila with an letter that said, “I don’t like to get into this kind of a dispute. I am enclosing my check for $4,000 in full payment for your carpentry and painting.” Camila receives the letter and the check. What should Camila do if she wants to try to recover the $1,000 balance she believes that Owen still owes? Explain fully.

(b) In part (a), assume that there was no rotten siding and no dispute over the amount owed, but Owen did not pay. Two months after payment was due, Owen wrote to Camila, “I am facing some financial problems. I’ll pay you $4,000 if you will accept it in full payment.” Camila wrote back, “Since I have given up hope of getting the full amount out of you, I’ll take the $4,000 in full payment.” Owen paid the $4,000. Later, Camila sues Owen for the $1,000 balance. May she recover? Explain fully.

III. On March 1, Susan, a self-employed investment advisor and Certified Financial Planner, sent a signed written letter to Jill, “I have decided to buy a new and faster computer for my business. I offer to sell you my two-year-old Lenovo computer for $500. This offer is good for four months.” Jill received Susan’s letter on March 3. On June 10, Susan sent a second signed written letter to Jill: “I haven’t heard from you about buying my computer. I guess you are not interested, so I am withdrawing my offer of March 1.” Jill received Susan’s second letter on June 12. On June 15, Jill wrote to Susan, “I accept your offer of March 1.” Susan tells Jill that they do not have a contract and she refuses to give Jill the two-year-old computer when Jill tenders $500. Jill sues Susan for breach of contract. Judgment for whom (who wins the lawsuit)? Explain fully.

Answer 1

Answer : 1 (A)

The general principle is that a contract is formed when acceptance is actually communicated to the offeror. The postal rule is an exception to the general principle. The postal provides that the contract is formed when a properly prepaid and properly addressed letter of acceptance is posted. In other words, where acceptance by post has been requested or where it is an appropriate and reasonable means of communication between the parties, then acceptance is complete as soon as the letter is posted, even if the letter is delayed .And the contract as general rule to be formed must be accepted by the offeree without modification in terms and condition sent by offeror as whole without any condition to be effective from offeree side.

In the Present Situation The letter of acceptance posted on 17 october forms contract on 17 october itself no matter it is actually received on 21 october hence acceptance is considered on 17 october to form validly contract But Since the one of condition of offeror as to the payment of full price on november 15 lump sum is modified by Sam hence this will not form the contract .The offer had to be accepted in terms condition same as whole to be effective ,

Hence Byron Does not have legal right to receive Truck pick up on 15 Nov in installment .He should pay the wole amount at once on 15 to be able to receive the truck Because this was the offer which cant be modified as to accptance ..

(B) Different dates of receiving the acceptance by the Sam does not change the situation as in postal case the acceptance is complete when the letter of acceptance is posted and which is 17 october no matter it is received late by the offerree . Hence situation does not change .So Byrano has no legal right to buy in installement modified Terms .

II (a) Camilla should file a suit of recovery of money through the court of law for balance 1000 .

(B)

Camilla in present situation has accepted the full and final payment of 4000 for contract on owen request of not able to pay full 5000 and hence the contract is modified here by waiving 1000 rs by the camilla .Later on camilla cant recover 1000 .

III .

Judgement will be in the favour of sushan as he had rescinded the first offer before the actually acceptance of the contract by the jiji .Hence will not be successfull .

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