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1791 words - 8 pages

The following are issues that need to be addressed when advising Amy about Sleepy Hollow Nursing Home’s rights and liabilities.

The first issue is whether or not Ben’s letter is an offer. “An offer is a statement of the terms upon which the offeror is prepared to be bound if acceptance is communicated while the offer remains alive”. If the offeree understands that the offeror intends to be bound by their proposal, if unequivocally accepted by said offeree, there is an offer. Bens letter contained a quote of $50,000 to do the job with all materials and paints included and he had previously visited the nursing home to give Amy advice about the job. These facts suggest that Ben communicated to the offeree effectively that he had the requisite intent to be bound by these terms if Amy accepted. Therefore, Ben’s letter is an offer.

The second issue is whether or not Amy’s withdrawal of acceptance in relation to Ben’s offer was valid. Where an offeree accepts an offer via letter, he/she can withdraw that acceptance through a faster method of communication before the letter is received by the offeror. Amy withdrew her acceptance by telephoning Ben the day before he received the letter. This was a speedier method of communication. In Dunmore v Alexander, an acceptance letter was sent. Later, a letter retracting the acceptance was sent. Both letters reached the destination at the same time. It was found that there was no contract because the retraction letter was quicker. Although this is so, the postal acceptance rule is that the offeree has made a complete acceptance as soon as he/she posts the letter. Due to this, some argue that a later rejection of this offer is ineffective regardless of whether or not the offeror receives it via a faster method of communication before receiving the letter. In advising Amy, her withdrawal was valid and thus the Nursing Home is not liable for breach of contract because Amy’s phone call withdrawing her offer reached Ben before he was made aware of her acceptance letter.

The third and fourth issues are whether or not Danny had to keep his offer to sell the minibus at a particular price open for a week and whether or not he communicated his revocation of this offer sufficiently. An offeror can revoke his/her offer any time before it is accepted as long as an option has not been given. This is even if he/she has stated that the offer will remain open for a particular period of time because the offeree has not presented consideration. The revocation of an offer must be communicated to the offeree, but this does not have to be done by the offeror as long as the information given is reliable. Applying this to the facts, no option was given and no consideration was given as Amy merely informed Danny that the deal was “subject to confirmation from the nursing home’s accountant that funds could be transferred by the time required”. The revocation was communicated to Amy before she made her acceptance as...

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