READ THE FOLLOWING SCENARIO AND USE THE ILAC METHOD TO ANALYSE THE SCENARIO.
On April 20 Ming wrote a letter to Lee in which she stated that she was wanting to sell her boat for $10,000 and since Lee had so often admired it, would she be interested in buying it? On receiving the letter the next day, Lee immediately telephoned Ming stating, “It’s exactly the boat I’m after but I would like a few days to think about it. Would you hold the boat for me for a week?” Ming answered “Certainly.” On the evening of April 26, Lee telephoned Ming saying, “I accept your offer and I will bring payment for the boat to your house tomorrow.” Ming replied to Lee “I’m sorry but you are too late. I sold the boat to Cherry earlier today. On hearing this Lee was furious and insisted Ming recover the boat and sell it to her.
Using the ILAC method and relevant contract
law and supporting cases, discuss with reasons whether or not a legally enforceable contract exists between Ming and Lee and explain the subsequent consequences of your answer.
Issue
The issue that needs to be decided in the present case is that an offer was made by Ming to Lee to sell her vote for $10,000. After receiving the offer, Lee made a phone call to Ming in which Lee asked Ming to hold the vote for a week. Ming became ready to hold the boat for a week however when Lee telephoned Ming, accepting the offer, Ming told Lee that she had already sold the boat with Cherry. Therefore, it needs to be decided if Ming was bound by the promise made by her to hold the board for a week.
Law
The law provides in this regard the law provides that are promised to keep the offer open is not valid unless it is not supported by separate consideration. It is required in such a case that there is a separate contract and this contract is for keeping the offer open. Such a contract is also known as an option. This type of contract is most useful in case a person is willing to enter into the major contract but wants to have some more time to make further investigations are evaluations. In case, the commitment of some resource like time or money is involved in such investigations, the person who is conducting these investigations may like to have a guarantee that in case the investigations are successful, such persons should be able to reap the benefit of initial expenses made on the investigation or evaluation. Therefore in such a case, the option is a way to encourage this type of initial involvement before making a major commitment. It is also known as keeping one's options open.
Application
The leading case in this regard is that of Dickinson v Dodds (1876). In this case, Dodds made an offer to sell his house to Dickinson and stated that the offer will remain open until 12 June, 9 AM. However, Dickinson was informed by a third party on 11th June that Dodds has sold the house to someone else. Thereafter, Dickinson purported to accept the offer however Dodds replied that the property has already been sold and it is too late to accept the offer. In this regard the court held that no particular form of revocation is required. The only thing required in such a case is that the offeror somehow conveys to the offeree that he has changed his mind regarding the offer. At the same time, the court also stated that the promise to keep the offer made by the offeree was not binding due to the reason that such a promise was not supported by any consideration.
In the present case also, Ming had accepted to keep the offer for a week however the offer was not supported by any consideration.
Conclusion
on the basis of the above discussion, it can be said that the promise made by Ming to keep the offer open for a week was not supported by any consideration therefore, the promise is not binding on Ming. As a result, early enforceable contract is not present between me Ming and Lee and Ming can sell the boat to Cherry before the expiry of one week.
TYPE YOUR REFERENCE LIST HERE
Turner, Chris (2007). Unlocking contract law (2nd ed. ed.). London
Case Law
Dickinson v Dodds (1876) 2 Ch D 46
