Question

At 9.00 am on Thursday 13 Aug, Mary, a car dealer sends a telex to Austin offering to sell him a rare vintage car for $50,000. Austin receives the telex at 9.15am and telexes his acceptance at 1.00pm.

Austin is aware that Mary's office is closed for lunch between 1.00 and 2.00pm.

On her return to the office, Mary does not bother to check if she received a telex from Austin and at 2.30pm receives an offer for the car from Ford, which she accepts.

At 4.00pm Austin hears from another car dealer that Mary has sold the car to Ford.

he is advised that it will cost him an additional $2,000 to buy a similar car and he immediately sends Mary another telex demanding that the original car be sold to him. Mary receives this telex at 5.00pm, at the same time as she read the acceptance telex.

Advise Austin of his legal position and what remedies, if any are open for him.

Answer 1

Mary, the offeror had made an offer to Austin, the offeree, which was unconditionally accepted by the offeree. The acceptance was communicated to the offeror so as to be outside the control of the offeree, and a valid contract had culminated at the point where the acceptance of the offer was put in course of transit to the proposer, i.e at 1 pm before the subsequent sale had been made at 2.30 pm.The agreement was supported by consideration and mutual consent, and it is assumed that both parties were competent to contract.

In view of the above, Austin had entered into a valid written contract with Mary, and by selling the same car to Ford, Mary had very clearly committed breach of contract. Therefore, Austin is in a position to sue Mary for damages of $ 2,000, being the difference between the contract price and market price of the car. If the same or similar car was not available in the market, Austin could move the court to enforce specific performance of the contract.