On April 15, Morgan sent a letter to Clark offering to sell her ...

[Arii_bell]

On April 15, Morgan sent a letter to Clark offering to sell her business to Clark for 200,000. The offer stated that it would expire on May 1. On April 30, Morgan sent another letter to Clark that stated that she was withdrawing the offer. Clark received that letter on May 1. Also on April 30, Clark sent a letter to Morgan accepting the offer. Morgan received that letter of acceptance on May 1. Morgan refused to sell the business to Clark, claiming that no contract had been formed. Clark brought suit to enforce the contract against Morgan. Based on what you have learned in this chapter, decide the probable outcome of the case.

Question 2

Bart owned 100 shares of a stock that was actively traded on a national stock exchange. Bart wanted to sell the shares but felt that his profit would be seriously diminished by selling through a broker and paying the customary brokerage commission. Bart offered the 100 shares to any of a group of six people in a conversation at a party. The offered price was 72.50 per share, the price at which the shares had closed that day. No one really responded to the offer at that time. Ten days later when the shares were trading at 76.25, Marie, one of the offerees at the party, appeared at Bart's office saying that she accepted the offer. Bart claimed the offer no longer was available. Evaluate the legal outcome of this dispute.

[6ana001]

Answer to Question 1

Judgment would be for Clark. Per the mailbox rule, a valid contract was formed on April 30 when Clark mailed the letter of acceptance without being aware of Morgan's attempted revocation. The revocation by Morgan was not effective, since it was not received by Clark until the day after the contract was formed

Answer to Question 2

When an offer is made and the offeror does not indicate how long it is to remain open, the offer expires within a reasonable period of time. In the case of an actively-traded stock, a reasonable amount of time would be relatively short. Further, Bart's offer was not a firm offer, nor did Bart extend a right of first refusal to the six (6 ) people at the party, so Bart had the right to sell the stock to another investor before Marie came forward to accept his offer.