Question

Chip Monk has been in the business of supplying commercial carpet to companies for several years. On 11/1 Polly Ester’s Supplies calls to purchase 100 yards of “Heather Blue, Industrial Grade” carpet. Chip offers the carpet at $37 per yard, with delivery on or before 12/31, payment on delivery. Polly accepts. On 11/3 Polly sends the following letter confirming the deal: “As discussed and agreed, we hereby accept your offer for 100 yards of “Heather Blue, Industrial Grade” carpet at a price of $37 per yard, delivery on 12/31 or earlier, payment on delivery. We also reserve the right to purchase up to 500 yards more at the same price for a period of six months from this date (signed) Polly Ester (owner of Polly Ester’s Supplies.) As of 11/21 Chip has not responded to Polly. You have been asked by Chip to draft a memo indicating the following: Is there a contract? If so, for what? What law applies here and why?

Answer 1

MEMORANDUM

DATE: November 21,2019

TO: Polly Ester's Supplies

FROM: Chip Monk

SUBJECT: Order for 500 yards

Ref: Letter dated 11/3

I am writing to inform you about the order for 500 yards you requested (letter dated 11/3). The said order needs confirmation and a contract has to be signed for the same.

The order for 100 yards "Heather Blue, Industrial Grade", will be delivered as agreed. We are happy to accept your new order with certain minor alterations. There might be a delay of about two months for the delivery of the new order. If you have any queries or concerns regarding the same, kindly let us know.

Thank you,

Chip Monk

Theory of contract applies here, because there is conditions put forth by both the parties in the contract. And in order to avoid a breach of contract in a later stage, it is always better to sign a contract which can even act as a legal proof. Also, signing a contract would be a better and safe deal for both the parties.