Exam 7: Requirement of Consideration

Salem said to Crystal over his cell phone, "Do you want to buy my car for $2,000?" Before she heard him her cell phone dropped the call. Can she accept the offer?

On July 23^rd, Carson, who lived in Bytown, wrote a letter to Henri, offering to sell his (Carson's) vintage car for $18,000. The letter was delivered to Henri in his home in Mount Royal, an hour's drive away, on July 27. On July 24^th, Carson met his friend Jack on the street. Jack expressed an interest in buying Carson's vintage car. He offered Carson $18,000 for the car, but Carson said only that he would "give the offer some thought," and promised to advise Jack of his decision. Carson did not tell Jack of his offer to sell the car to Henri. On July 25^th, while on vacation in York, Jack sent a fax to Carson, offering to buy the car for $18,250 if Carson would deliver the car, on July 30^th, to his farm, located some 20 km west of Bytown. Carson received the fax the same day and, that evening, wrote and mailed a letter to Henri, revoking his offer to sell the vintage car. On July 28^th, Henri wrote a letter to Carson accepting his offer to sell the vintage car and enclosed a cheque for $18,000 as payment in full. On July 29^th, Henri received Carson's letter revoking the offer. Carson had business west of Bytown on July 29^th, and since his trip would take him past Jack's farm, he decided to deliver the vintage car on his way. Carson left the car on a trailer at Jack's farm, but finding no one at home, left the keys to the car and a note in Jack's mailbox. The note stated that he had left the car behind the garage. On July 30^th, Carson received the letter of acceptance Henri had mailed to him on July 28^th. Carson immediately telephoned Henri to tell him he had sold the car to Jack, but Henri was out of town on a business trip. Carson left a message with Henri's wife and, on July 31^st, returned by mail the cheque that Henri had sent him with the letter of acceptance Later on July 31^st, Carson received a telephone call from Jack who had just returned from Toronto requesting delivery of the car. When Carson explained that the car had been delivered on July 29^th, Jack stated that the car was not behind the garage. Carson then requested Jack to call the police to investigate the theft. Later in August, the police located the car in the possession of a minor and an arrest was made. Unfortunately the car had been badly damaged while in the thief's possession. The estimate of damages was $12,000. Discuss the issues raised in this case. Describe the rights of the parties (if any) and the possible outcome of any litigation if legal action should be taken to enforce the rights of the parties.

A computer software company advertised a new organizational program as one of the most "user friendly" programs of its kind on the market. The Smallville police department used the program and, during operation, the program collapsed, losing vital information related to the effectiveness of the department in carrying out its duties. Under the law of contract, what is the software company's position with respect to liability?

Andy offers to sell his car to Bob, but Bob needs to arrange financing, so Andy says he will give Bob three days to do so. Andy can revoke the offer before the three days are up.

Robert has just mailed a letter of acceptance in response to James' letter offering to sell his hardware store to Robert, when he is knocked down by a car and killed. Jane, Robert's wife and sole heir, wants to run the business, since that is what she and Robert had intended, but James does not believe a woman could run a hardware store and tells her that the deal is off. Discuss Jane's legal position.

Mr. Gatlin went into a supermarket where he saw a new kind of toothpaste on a shelf, ticketed at $2.69. He decided to try it, so he took it to the checkout and placed it on the moving counter. The staff member at the checkout ran up the sale, took Mr. Gatlin's money and put the toothpaste in a bag, handing it with the receipt and the change to Mr. Gatlin. A contract was formed when:

There are requirements predetermined by law to make a contract binding and, therefore, legally enforceable. With your knowledge of the process of arriving at a contract, explain how that process relates to the legal solidification of a contract.

Which of the following are NOT presumed to be binding?

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. Rahul and Brown established a binding contract which both parties are obliged to perform.

Skinny You is a brand new "weight loss pill." It is being sold by a new company; Skinny Products Inc. Advertisements were placed in the back of Teen Beauty magazine that provided potential consumers with information about the success rate of the pills-"Weight Loss of 10 pounds in 10 days if used as instructed." Skinny Products Inc. guaranteed the weight loss by saying that if customers did not lose 10 pounds in 10 days then they would receive $100. To increase consumer confidence of the damages being paid Skinny Products Inc. stated that it had put money in trust. Latisha purchased Skinny You and used it for 10 days, as instructed, but only lost 4 pounds. Can she sue Skinny Products Inc for breach of contract?

Mike responds to Flavio's statement that he would like to buy Mike's motorbike for $3,000 by saying that he would want $4,000, given the work he has put into it. Flavio says OK. I'll give you that. Here's $2,000, and I'll give a promissory note for the balance payable at $500 a month for the next 4 months." 1.There is a contract. 2.There is no contract. 3.Flavio's first statement to Mike was an invitation to do business. 4.Mike's response was a counter offer. 5.Flavio's final statement to Mike was an acceptance.

George was an independent salesman, working sales territories in which various manufacturers did not maintain sales agents. Prior to a trip to Northern Manitoba, George informed a manufacturer of small electrical generators he expected to secure an order for fifty generators on this trip. From a more remote community, George was able to send a fax to the manufacturer which, when received, read "Send by air immediately the generators. Must be here by next Thursday." The fax should have read, "three generators" and the mistake was made solely by the fax office. The manufacturer sent fifty generators. Aside from the fact that one of the parties may have a remedy against the fax office, discuss the relevant principles of contract raised here, and determine whether there was no contract, a contract for three generators, or a contract for fifty generators.

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. Brown's acceptance of Rahul's offer was unconditional.

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. The contract between Rahul and Brown automatically rescinded the offer which Rahul had made to Jones.

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. The acceptance by Jones was ineffective because Jones did not reply to Rahul by way of a written acceptance.

Franklin Motors Ltd. makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co. The law presumes that, unless one of them proves otherwise, they intended this agreement to be a legally binding one.

Ian offered to sell his horse to Wanda for $3,500. Wanda wanted to think about it and let Ian know by email. Ian agreed. Wanda emailed Ian at 11:45 that night. What type of contract was formed?