Question

1. Sarah's studio apartment was unfurnished. While on "Doug's List", an online classified ad service (for nonmerchants), she saw an ad, which read: "Moving - For sale: a very nice brown leather couch. Almost new. $600." There was a photo with the ad and contact information. Sarah emailed the contact stating: "I would like to buy your couch- please reply." Does Sarah have a contract - yes or no and tell me WHY.

2. Johnson purchased construction equipment from Wilson Equipment Co., Inc. for $10,500.00. However, after some of the equipment proved to be defective, Johnson sent Wilson a check for $7,000.00 marked "by endorsement this check is accepted as payment in full." Wilson endorsed and deposited the check. May Wilson force Johnson to pay the remaining $3,500.00 - why or why not? What additional facts might you need to know to come to a definitive answer?

3.

When can emails, instant messages, tweets, etc. create a contract - especially when you did not think you were creating a contract.

In a case out of Florida from 2011, this issue was litigated between CX Digital Media an online marketing service, and Smoking Everywhere, Inc., a retailer of electronic cigarettes. CX Digital charges a fee to its clients of which Smoking Everywhere was one for providing sales referrals. The two companies were in the process of negotiating changes to their contract via instant messaging. The parties were "discussing" the issue of the maximum number of referrals per day (more referrals means a higher fee to CX). A CX employee sent a message to a Smoking Everywhere executive asking about the maximum number of referrals. The Smoking Everywhere executive replied "No Limit". The CX employee replied "Awesome"

After. CX referred a higher volume of sales leads than it had done previously. Smoking Everywhere refused to pay the additional fee for the extra referrals, claiming that the instant messaging chat was not an enforceable contract modification of the initial contract.

Who do you think won at trial? What can a company do to avoid "accidental" contracts via email, text, tweet, etc.?

Answer 1

Sarah does not have a contract. This is because, to constitute a legal contract, an agreement must have all of the following characteristics:

• Legal purpose: A contract must have a legal purpose to be enforceable.
• Mutual Agreement All parties to the contract must have reached a mutual agreement.
• Competent Parties: The parties in a contract must be of sound mind, of legal age, and not in the influence of drugs or alcohol.
• Genuine Assent: All parties must engage in the agreement freely.

Since, Sarah has just mailed the advertiser expressing her interest. The above example does not depict a contract.