Peter who lived in Wagga Wagga saw an advertisement posted by Daniel on the Harley Davidson website that said "Wanted: a 62 Harley Davidson Roadster". Peter telephoned Daniel, an academic at the University of Canberra, on 3 November and after some discussions about the bike and its condition, Peter offered to sell his 1962 Roadster (the kind made famous in the film Easy Rider) to Daniel for $30,000. Photos of the bike were on the classified advertisements page. Daniel was thrilled (only a few genuine originals are to be found in Australia) but said he needed time to arrange the finances. Peter said that he understood and promised to keep the offer open for a week. They exchanged phone numbers and home addresses. "Just let me know by 5.00 pm November 10", were Peter's final words.

Daniel arranged a loan on November 5 and decided to accept Peter's offer. He rang him repeatedly throughout the day but could not reach him. The following day he tried and failed again. He, therefore, sent a letter of acceptance on the same day, in which he included a cheque for $3000 "as deposit with the balance payable on delivery". In the letter he enquired whether Peter would arrange delivery - ("could you arrange for it to be sent by rail (I'll pay!) or are you ready to ride it to Canberra?").

In fact, Daniel could not reach Peter by telephone on November 5 because Peter had left on a five-day business trip to Los Angeles. After visiting a "movie museum" in LA that contained the original bike from Easy Rider he grew nostalgic about his own bike and decided not to sell it. He looked up Daniel on University of Canberra's website and found his email address. He sent him an email on November 9 withdrawing the offer. Daniel opened up his email late on November 9 and read Peter's email. Peter returned home from Los Angeles and read Daniel's letter on the morning of November 10. He still did not want to sell and returned the cheque.

Daniel seeks your advice as to whether he has a legally binding contract with Peter. Support the analysis in your advice with relevant cases.

Answer rating: 100% (QA)

In this scenario the issue revolves around whether a legally binding contract was formed between Peter and Daniel for the sale of Peters 1962 Roadster ... View the full answer