Question

Xena is a distributor of air conditioners, operating under the trade name of Kool R.U. Xena supplies conditioners to retailers mostly during the Spring. On July 1, Xena stumbled across three air conditioners she wished to sell so she sent the following memo to Electra, a business which uses this type of air conditioner.

July 3, 2018

I have three air conditioners remaining in this year's supply. I will sell them to you for $2,000 each if you want them. Think it over. I will hold this offer open for you for 30 days.

Signed X

On July 27, a representative of Sullivan Corporation came to Xena's facility and asked if Xena had any air conditioners. Xena said; "yes". The representative then offered to purchase the three air remaining air conditioners at a price better than the price offered to Electra. Xena agreed to the sale to Sullivan.

(a)      On July 28, Xena informed Electra of the sale. That same day, Electra sent a letter by Fed-Ex overnight mail accepting Xena’s offer and demanding delivery of the air conditioners. When Xena responds that she already sold them, Electra brings suit. Who wins? Explain fully.

(b)      Would your answer to (a) be different if Xena did not notify Electra of the sale? Explain fully.

Answer 1

a- The party who wins the case depend on the timing of information xena provided to electrac about the sale and timing of letter sent by electra by fedex overnight mail.

In case if Xena informed electra first that Xena has sold the AC to Sullivan then original offer was revoked. Offers which are open for a particular period of time and signed by offeror that is xena are irrevocable but there is exception. if Xena take back the offer before the acceptance of another party then offer can be revoked. Then there is no offer and valid contract. so in this case, xena will win the case.

In case if Electra send the letter of acceptance before the timinng of information communicated by Xena the under mail box rule accepatance was communicated and created valid contract between xena and electra then Electra will win the case.

we can see thar mail or letter was sent by fedex overnight which means on mid night of july 28th so Xena informed first electra about the sale so we can conclude that acceptance from side of electra was late and Xena notified first by revoking the offer.

Yes, my answer would be different if Xena did not notify Electra of the sale because when a offer is hold for a period of time become irrevocable unless before acceptance of another party seller must notify that they has sold the goods to another party.

Notification before acceptance helps to prove that original offer was revoked legally. If xena would not have notified electra then offer will be open to electra binding Xena to sell those three AC or pay for damages for breach of contract.