Case Law
Question #1
This case is to determine whether or not there is a valid contract. A contract is
the timely acceptance for consideration of an offer. An offer is made by Eddie
Haskell to sell his computer to Wally for $2,000. This offer was good until May
20. On May 12, Wally sent a letter to Eddie stating that the initial price was too
high for him and that he would be able to spend $1,500 on the computer. Wally
rejected Eddie's offer of sale by making a counter-offer of purchase for $1,500.
Therefore there is no contract because neither party had made an acceptance of
the others offer. This was mere negotiating for a price. The mailbox rule states,
"a letter of acceptance of an offer is effective when it is deposited in the mail. A
revocation of an offer is effective when the mailed letter is received by the
person to whom the offer was made". In these facts, Eddie sent his letter of
revocation to Wally on the 15th of May. Wally does not receive the mailed letter
until the 19th of May at 11:00 a.m. In the meantime, Wally sends a telegram to
Wally on the 19th of May at 10:45 a.m. stating, "Accept your offer for $2,000".
Under the mailbox rule, an acceptance to a contract is effective when it is
mailed. In this case, the acceptance was telegraphed to Eddie 15 minutes
before Eddie's mailed revocation was received. Therefore, there was a valid
binding contract. The issue raised is whether, under the mailbox rule, the form of
acceptance by telegraph is valid when the offer was made by mail. I would
argue that the mailbox rule is a generic name and applies not only to the sending
of letters by mail but also the sending of all forms of communication by any
means that has the speed of mail or faster. In today's electronic era our
communication cannot be slowed down by the snail's pace of postal service.
Therefore the contract should stand as valid. Though the telegraph company
delayed delivery beyond the deadline date of May 20th, the contract was already
formed and receipt by Eddie on May 21st should have no bearing on a claim that
it is not a valid contract. If, however, Wally's acceptance telegram was sent at
11:15 a.m. on May 19th, there would not be a contract. Revocation of an offer is
effective upon receipt. Wally received the mailed revocation 15 minutes before
he telegraphed his acceptance. The acceptance is defective and the mailbox
rule applies to negate any contract.
Question # 2
In this case, Blandings v. Werk, The preexisting duty rule plays a major
role in determining the outcome of the case. The preexisting duty rule states that
either party cannot amend a contract without consideration. If [next page]