Question

While jogging around his suburb one morning, Pedro sees a speedboat parked outside a house. There is a sign posted on the boat’s windshield saying: “For sale $9,000, Text Andres on 0409876543. Direct buyers only!” A boat lover, Pedro calls the number advertised and leaves a voice message saying that he’s happy to buy the boat for $7,000. He also leaves his return number. Andres is busy all day, and only hears Pedro’s message the next morning. He calls Pedro back; he also leaves a voice message saying that Pedro’s price is too low, but he can get the boat for $8,000. That same day, however, another buyer sees the boat and makes a $9,000 cash offer to Andres on the spot. Andres takes the money, signs over the boat’s registration papers, and the buyer tows the boat away. Pedro passes by Andres’ house and sees that boat is gone. Panicking, he listens to his voice messages and hears Andres’ message for the first time. He calls Andres right away and told him in no uncertain words that he accepts his offer. Pedro now thinks he has accepted Andres’ offer so they now have a contract. When Pedro finds out that the boat has been sold to someone else, he gets very angry. He argues that he had already accepted Andres’ verbal offer, so he had no right to sell the boat to the other buyer. Does Pedro have a valid contract with Andres and he entitled to the boat? Explain with reference to all the elements of a valid contract. (Maximum 350 words) (WITH REFERENCING)

Answer 1

Elements of a valid contract are namely,

1.Offer by one party to the other or others in general, which is committed, precise in monetary terms and intentions ,well communicated.

2. Acceptance by the other party, in letter & spirit , to the offer , or counter-offer after negotiation , in unequivocal terms--which has to be unconditional and without any "subject -to"clause by the acceptor--- to be communicated and understood , in same terms by the offeree.

3. Consideration, ie. The monetary value should be accepted between both the parties very clearly

4. Certainty about all the aforesaid terms

5. Both the parties, should have the capacity to enter into contracts , that can be enforced legally---as entering into contracts with either party being a minor or a person of unstable mind or a person disqualified due to any prior litigation matters, renders the contract , null & void, ab-initio.

That said, in the given case,

there are only offers & counter-offers and it has not reached the acceptance stage at all.

Going through the case,

Andres , first offers the boat for sale , with money terms & contact phone no.---- in reply to which

Pedro also leaves a voice message(after his call not-attended) with his counter-offer of $ 7000 & his contact no.--------- in reply to which

Andres   (negotiates) offers to sell the boat at $ 8000

So, here, even though Andres has initiated the offer/counter offer , the negotiations have not reached any legally-enforceable stage .

Andres can revoke his offer as long as it has not yet been accepted.Pedro has only made a counter-offer with changed money terms,than what was originally offered . If only Andres has accepted to Pedro's counter-offer, can there be a contract , which can-not be gone against.Revocation of an offer must happen before acceptance, by the other party----unless it is agreed between both the parties, to wait till some period of time or some specified event, to happen or not to happen.As long as it is not agreed , atleast verbally or by intent, to wait for a certain period of time /event ---for other party's acceptance/rejection of the offer---- the offeror /acceptor need not wait & there is not said to be any contract ar all.

Even though there was delay on the part of Andres in seeing Pedro's voice message & subsequent delay in his counter-offering $ 8000---reason for Pedro believing that Andres was taking time in processing his counter-offer of $ 7000----but Andres who initiated the latest offer , not waiting for Pedro's response-----

there still is not a valid contract and hence can be revoked at any time , before acceptance---as in any case, there is no certainty that Pedro will accept for $ 8000.

So, the answer is there is no valid contract and Andres is certainly ,not entitled to the boat.