Exercise 3
This exercise is about offer and acceptance.
Mike puts an ad in the newspaper stating that he wants to sell his truck for $500. James goes to Mike’s home and tells him that he is interested in buying the truck. After looking at it, James hands Mike $500 in cash, which Mike puts in his pocket. Just then, Steve drives up and tells Mike that he’ll give him $600 for the truck. Mike hands James back his $500 and sells the truck to Steve. James sues Mike for breach of contract.
How should the judge rule?
- A. For Mike, because there was no offer and acceptance.
- Sorry, but that's not the correct answer. Please select another.
- B. For Mike, because he gave the money back to James.
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- C. For James, because once Mike accepted the money, the deal was closed.
- C is correct. MIke's ad offered to sell the truck for $500 and James accepted the offer by handing Mike the money, which he pocketed. At that time, both Mike and James intended that James would buy the truck. These actions and mutual intention created a contract between Mike and James, which Mike breached by selling his truck to Steve.
- D. For Mike, because he didn’t specifically say why he was taking the money.
- Sorry, but that's not the correct answer. Please select another.