Question

Grace saw an advertisement posted by Apari on a car sales website that said “For Sale: 2015 Hyundai hatchback”. Grace telephoned Apari on 3 April and after some discussions about the car and its condition, Grace said to Apari “I’m interested in the car and could pay $12,000 for it”. Apari replied “Thanks, but I won’t accept less than $15,000 for it. You’ve seen the photos, it’s in immaculate condition”. Grace said “Yes, it is in lovely condition, you’ve kept it well. I can pay $14,000”. Apari said “I’m only getting rid of the car as I don’t really need it. I just catch the train or walk everywhere. My work is only 5 minutes from Central station. It’s not an urgent sale, but I’ll take $14,500”. Grace was thrilled, but explained to Apari that she would need time to arrange the finances. Apari said that he understood and said to Grace “Just let me know by 5:00pm April 10”. Grace and Apari exchanged phone details and home addresses. Grace arranged a loan on 5 April. Grace then rang Apari repeatedly throughout the day but could not reach him. There was no voice mail service so she could not leave a message for Apari to return her call. The following day Grace tried and failed again. So, Grace decided to send a letter to Apari’s postal address that day, with a cheque for $1450 “as a 10% deposit for the car, with the balance payable on collection”. Grace could not reach Apari by telephone on April 5 because Apari had left on a five day business trip to Brisbane during which he was offered a new job. After Apari accepted the new job, he realised he would need a car as his new workplace was not near a train station and it would require him to do some driving. Apari sent Grace a text message on April 8, letting her know that he wanted to keep the car after all. Grace read the text message on April 9. Upon his return from Brisbane on April 10, Apari collected his post and read Grace’s letter. He still did not want to sell and returned the cheque to Grace.

Advise Grace as to her legal position. Does an agreement exist?

Answer 1

There is a clear distinction between and agreement and offer of agreement. An agreement results in a contract between two or more parties and gives right to the parties to ask for performance from the other party. It also raise obligations for both the parties to the agreement. An offer to agreement on the other hand is not an agreement and does not give any right or raise any obligations to the parties.

Issue in this case:

Whether there was any agreement between Grace and Apari.

Application:

In this case there was no agreement between Grace and Apari as both agreed on a time to decide as to the future course of action, the formation of the agreement would be decided on or before that time, i.e. April 10 in this case.

With change in circumstances Apari decided to not sale his car and hence, could not accept the proposal of Grace despite giving his words. However, since there was no agreement between Grace and Apari Grace would not be able to prosecute Apari for his inability to keep his word of keeping the offer open till April 10 as it was an offer of agreement and not an agreement itself.   

Decision:

Thus, there was no agreement between Grace and Apari and hence, Grace has no right to prosecute Apari.