Question

ESSAY QUESTION – Treat this like a test essay question and answer using IRAC method.

On December 1, Paul sent Rachel a letter, via overnight delivery, offering to employ Rachel to review Paul's tax situation for the current year for $10,000. In the letter, the company stated that Rachel had ten days to accept. On December 5, Rachel sent an e-mail message that stated, "The price for the tax analysis seems too low. Would you consider paying $15,000?" Paul received the message without responding immediately. The next day, Smith, a competitor of Rachel, offered to Paul to conduct the appraisal for $8,000. On learning of this offer, Rachel immediately e-mailed Paul, agreeing to do the work for $10,000. Paul received this message on December 7. Do Paul and Rachel have a contract? Why or Why not?

Answer 1

Rule:
The Mirror Image Rule An acceptance must be unequivocal or clear.
Any requests made for a change in the original offer should constitute a counteroffer
Analysis:
1. Unequivocal
2. Counteroffer
Conclusion:
Rachel can/cannot accept Paul's offer when Rachel asked for more money before they accepted

Solution to the Agreement: Paul and Rachel don’t have a contract as Rachel tried to accept the original offer within a time of 10 days but it also made a counteroffer which means that both the parties denied the original offer. Rachel cannot decide to accept the offer when it learnt that the other co. (Smith) has made a lower offer.

Result: In this case it is Paul’s discretion to accept the contract or not.