Question

On Monday, Jay See, a vintage car dealer, placed an advertisement in the online motor magazine offering to sell a 1999 Ferrari F355 for $100,000. Jay See left his mobile number for potential buyers to contact him.

On Wednesday, Emil Soh saw the advertisement and immediately called Jay See saying that he would be willing to pay $88,888 cash. Jay See replied that he needed time to consider the price as he received several messages from potential buyers. Jay See further said that he had requested potential buyers to post their cheques to him to show their seriousness in buying the car.

On Thursday, Emil Soh received Jay See’s address and full name through the message. Emil Soh decided to proceed with the purchase based on Jay See’s price of $100,000. He wrote a cheque for $100,000 in Jay See’s full name and posted to Jay See’s address.

Jay See received Emil Soh’s letter with the cheque on Saturday. However, Jay See decided to sell his car to a buyer who offered $120,000. Jay See called Emil Soh and told him that he will be returning his cheque.

Required:

Advise Emil Soh whether there is a legally binding contract with Jay See.

Answer 1

The answer to this question is in the defination of INVITATION TO TREAT-

"It is an expression of willingness to negotiate. A person making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed."

A contract is a legally binding voluntary agreement formed when one person makes an offer, and the other accepts it. There may be some preliminary discussion before an offer is formally made. Such pre-contractual representations are known variously as “invitations to treat”, “requests for information” or “statements of intention”.

In this case when Emil Soh saw the advertisement for a vintage car it wa a INVITATIION TO TREAT. So when he called jay see to say that he would be willing to pay $88,888 cash jay see did not confirm the offer or accept the offer given ny emil soh. Jay see said he needed time to consider the price as he received several messages from potential buyers.

SO THE CONTRACT IS NOT LEGALLY BINDING BETWEEN THEM AS JAY SEE HAS NOT ACCEPTED THE OFFER OF EMIL SOH .

*The request to the potential buyers to post their cheques to him to show their seriousness in buying the car was just the requirements to the invitation to treat.The act of  emil soh writting a cheque for $100,000 in Jay See’s full name and posting it to Jay See’s address dosent mean that the contract is legally binding between them.

*SO ACCORDING TO THE LAW THE CONTRACT IS NOT LEGALLY BINDING BETWEEN THE PARTIES.