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Contract Law: Offer, Acceptance, and Revocation

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Joan is a realtor living and working in California. Bob knows Joan casually through mutual acquaintances. At 9:00 a.m. on Monday, June 30, Joan faxed Bob a letter stating that she had 100 acres of undeveloped land, at the intersection of First and Main, which she would sell him for $1,000 per acre. Joan's letter also stated: "Unless I receive your written acceptance by 5:00 p.m. on Thursday, July 3, my offer will expire. I will not offer this same acreage to any other prospective buyer until 5:00 p.m. on Thursday, July 3, 2003, or until you reject this offer, whichever occurs first." Across the bottom of Joan's letter was printed:

"Joan, Realtor
3700 South Susan Street, Santa Ana, CA 92704
Tel: (562) 555-5555
Fax: (562) 555-5556
E-Mail: joan@home.com."

At 1:00 p.m. on July 3, just before he rushed out of the house to catch a flight, Bob sent an e-mail to "joan@home.com" stating: "I agree to buy your 100 acres for $1,000 per acre. Have a great Fourth of July!" Bob's e-mail reached Joan's e-mailbox less than a minute later, but she did not check her e-mail until after 5:00 p.m. on July 3.

Begin your answers with a Yes or No, then provide support. It is encouraged that you incorporate the essay exam writing style (define, analyze, conclude) method for your support.
Was Joan's fax an offer to sell Bob 100 acres of undeveloped land for $1,000 per acre?

Regardless of your answer to Question 1, if Joan offered to sell Bob 100 acres of undeveloped land for $1,000 per acre, was she obligated to offer the land exclusively to Bob until 5:00 p.m. on Thursday, July 3, or until he rejected the offer, whichever happened first?

Returning to the facts, assuming Joan offered to sell Bob 100 acres of undeveloped land for $1,000 per acre, did Bob accept her offer by the terms of his July 3 e-mail?

Assuming Joan offered to sell Bob 100 acres of undeveloped land for $1,000 per acre, if Bob died before 5:00 p.m. on July 3d, and before responding to Joan's offer, could his son, Rochester, have accepted Joan's offer, provided he did so according to its terms?

Suppose, Joan started working the phones, anxious to sell the property before she left town for the July 4th holiday weekend. Before noon, she exchanged faxes with Sam, who agreed to purchase the land for $1,050 per acre. At 12:00 p.m., by which time Bob had already left the office and his staff had gone home early for the holiday weekend, Joan sent a fax to Bob's office revoking her offer. No one returned to Bob's office (and, therefore, no one saw the fax) until 8 a.m. on Monday, July 7th.

Was Joan's revocation effective?

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Step 1
Joan's fax: Yes. An offer is an expression of willingness to contract on certain terms, made with the intention that it shall become a contract as soon as it is accepted by the person to whom it is addressed. Joan's letter has clearly stated that she would sell him 100 acres for $1,000 per acre. She has also provided a clear time limit for Bob. Since, the fax is an expression of willingness to enter into a contract and the terms are explicitly mentioned, Joan's fax is an offer.

Step 2
Joan Obligated? No. The terms of the offer are those that the offeror is willing to be ...

Solution Summary

This solution explains offer, acceptance, and revocation in contract law. The sources used are also included in the solution.

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Laws relating to offer and acceptance are summarized.

David manufactures office equipment. Earlier this year he developed a revolutionary new scanner. On 20th May he wrote to Robert and Jenny, both wholesalers whom he had dealt with previously, asking each of them whether they would be interested in becoming the sole distributor for the scanner. On 22nd May Robert and Jenny each wrote to David independently stating that they were interested in becoming the sole distributor for the scanner and would like further information.

On 24th May David wrote to Robert stating â??I offer you the post of sole distributor of the scanner at a basic 10% commission. If I hear nothing from you by 31st May, I will assume that this is acceptable to you.â?

On receiving Davidâ??s letter Robert immediately posted a letter to David in which he accepted Davidâ??s offer, however he incorrectly addressed the letter and consequently the letter did not arrive until 2nd June.

Meanwhile on 31st May, Jenny, having heard nothing from David since the letter of 20th May, posted a letter to David in which she offered to become Davidâ??s sole distributor for a 5% commission.

David received Jennyâ??s letter on 1st June and immediately posted a letter to her accepting her offer. David then telephoned Robert and told him that the post of sole distributor was no longer available. Robert insists that there is a binding contract to appoint him.

Advise the parties with regard to the law relating to offer and acceptance.

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