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Offer and Acceptance

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Thomas Cascade retired from his law enforcement job and began painting portraits. He loved to paint and expanded his painting into landscapes. The Festival of Arts was coming to his hometown and Thomas was invited to exhibit his paintings. On Wednesday, September 1, Thomas went to the festival and displayed several of his landscape paintings. Darla observed his mountain landscape painting and fell in love with it. She loved how Thomas captured the look of the sunset resting upon the mountains. She told Thomas that she will buy his painting for $2,500. Thomas told Darla that he has never sold one of his paintings and that he did not know what a fair price would be to charge for his painting. Thomas told Darla that he would take her phone number and call her back with a price.

Bobby, another art buff saw Thomas' work and offered to pay Thomas $4,500 for the same painting that Darla had wanted to buy. Thomas accepted Bobby's offer. Bobby asked Thomas to deliver the painting to his home by Friday and Bobby would pay him the money then. Thomas immediately took the painting out of his display, wrapped it in bubble wrap to protect it and put a sold sticker on it.

Thomas then had an art expert look at his work. The expert determined that his painting, based on his skill and talent, would sell from anywhere around $1,500 to $3,500 per painting.

Meanwhile, when Thomas tried to deliver the painting to Bobby on Friday, Bobby said that he had changed his mind and was no longer interested.

On October 1, Thomas then called Darla and left a message on her answering machine saying that he accepted her offer and would sell her the painting for the $2,500 she had offered. Darla has never returned Thomas' telephone call.

What are Thomas' rights against:


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Legally, in a case of this nature Thomas has the right to collect the $4500 offered by Bobby for the painting. In essence, Thomas would win a civil suit against Bobby for the $4500 offered by Bobby for the painting, due to the fact that a legally binding contract, existed between ...

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Offer, Acceptance and Contract Formation

Help with this problem:

1. Analysis and applicable rules as applied to the seller/advertiser.
2. Analysis and applicable rules as they apply to the purchaser.


A store ran a sales promotion to boost sales of a product. The promotion included both free gifts for purchases and low interest financing. It was supported by a print advertising campaign in several states.

The advertisements ran in major daily newspapers, and stated as follows:

Buy this product at a low price of $14,599.00. We will finance it an incredible 7.5% interest rate** and let you pick the term of the loan: 6, 12, or 18 months. No monthly payments. At the end of the term you pay:

6 months: $14, 781.49
12 months: $14, 963.98
18 months: $15, 146.46 ** Annual Percentage Rate: Subject to credit qualification.

Plus we will help you get started with a gift certificate that can be redeemed for products worth $300.00.

The promotion was successful, with 68 of the products sold in 2 weeks. All 68 gift certificates were issued and have been fully redeemed by all the customers. Unfortunately the advertisements contained a serious error. A financial analyst calculated the financing figures for the ad using a 2.5% interest rate, not a 7.7% interest rate. The numbers is the advertisements were incorrect. The correct numbers based on a 7.5% interest rate are:

6 months: $15,146.46
12 months: $15,693,93
18 months: $16,241.39

Total Loss on all Contracts: $65,695.50

Customers who bought the product during the promotion signed standard plain language promissory notes that clearly stated the 7.5% interest rate. Only one person selected the 6 month term, 22 selected the 12 month term , and 45 selected the 18 month term. The customer with the 6 month term came forward and a dispute arose over the correct amount due. The seller believes they are entitled to the higher amount, but the customer refused to pay more than the advertised amount. To resolve the matter, the smaller amount was accepted for this one case with a six month term, but do not wish to accept the advertised amount on the remaining 67 contracts with 12 or 18 month contracts.

Help determining if the seller is contractually bound by the terms of the advertisement, or whether they can enforce the contract terms of the promissory notes for the higher amount.

Help with all legal arguments for the seller and purchaser. This does not involve the law of mistakes.

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