Anne decides to sell her house. Emily contacts her on 7 October, to say that she is
Question:
Anne decides to sell her house. Emily contacts her on 7 October, to say that she is interested in buying the house but needs to speak to her bank first, to see if she can borrow 110,000. Anne agrees to give her time to think it over and promises to keep the house for Emily until 14 October. On 10 October, Anne receives a written offer from Jonathan, offering to buy the house for 120,000. Anne responds that she will accept his offer at 125,000. However, Jonathan writes back to Anne that he is not willing to pay more than 122,000 for it. Anne decides to think it over and, on 12 October, she writes to Jonathan accepting his offer to buy her house for 122,000. After she has posted the letter, she phones Emily to tell her that the house has been sold. Later that day, Anne receives a call from Jonathan saying that he is no longer willing to buy her house for 122,000, and she explains that she has just written to him to accept his offer. Jonathan denies that a contract has been formed. Emily is extremely annoyed that Anne has sold before she has had a chance to speak to her bank manager. Advise Anne and Emily.
a. Would it make any difference if Anne had emailed her acceptance to Jonathan on 12 October, instead of posting it?
b. Even if Jonathan has withdrawn his offer to buy at 122,000, is it still open to Anne to accept his original offer to buy at 120,000?
c. What would happen if Anne had accepted a verbal offer from Emily,and had then agreed that Emily could come round and measure the rooms in order to buy some designer Italian furniture, which cost Emily 8,000. Before Anne and Emily could sign the missives (the contract for the sale), however, Anne decided to accept Jonathan's offer instead. Emily would not be able to use this furniture in her present flat.
Would Emily be able to enforce her unwritten agreement with Anne?
Corporate Finance
ISBN: 9781265533199
13th International Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe