Contracts Law 616, Assignment #7, Feugueng # 8460

Joan is a realtor living and working in California. Bob knows Joan casually through mutual acquaintances. At
9:00 a.m. on Monday, June 30, Joan faxed a letter to Bob at his office stating that she had 100 acres of
undeveloped land, at the intersection of First and Main, which she would sell him for $1,000 per acre. Joan's
letter also stated: "Unless I receive your written acceptance by 5:00 p.m. on Thursday, July 3, my offer will
expire. I will not offer this same acreage to any other prospective buyer until 5:00 p.m. on Thursday, July 3,
2003, or until you reject this offer, whichever occurs first.” Across the bottom of Joan's letter was printed:

"Joan, Realtor 
3700 South Susan Street, Santa Ana, CA 92704
Tel: (562) 555-5555 
Fax: (562) 555-5556 
E-Mail: [email protected]."

At 1:00 p.m. on July 3, just before he rushed out of the house to catch a flight, Bob sent an e-mail to
"[email protected]" stating: "I agree to buy your 100 acres for $1,000 per acre. Have a great Fourth of July!”
Bob's e-mail reached Joan's e-mailbox less than a minute later, but she did not check her e-mail until after 5:00
p.m. on July 3. 

Begin your answers with a Yes or No, then provide support. It is encouraged that you incorporate the essay
exam writing style (define, analyze, conclude) method for your support.

1. Was Joan's fax an offer to sell Bob 100 acres of undeveloped land for $1,000 per acre?

Yes.

An offer is an expression of willingness to contract on certain terms, made with the intention that it shall
become a contract as soon as it is accepted by the person to whom it is addressed.

Joan's June 30th fax expressed an intent to enter into a bargain and contained definite and certain terms.
Joan was not merely advertising the land's availability for sale; she solicited Bob's purchase of the land.
Her fax used the word "offer" at least twice and although that is not dispositive, it is indicative of her
intent and of Bob's understanding. Joan also indicated that she was only offering the land to Bob for a
stated time (whether, in fact, she was or not), further reinforcing the conclusion that Joan's fax was an
offer to sell 100 acres of undeveloped land for $1,000 per acre. The fax also contains the essential
definite and certain terms of parties (Joan and Bob) price($1,000 per acre) subject matter (land at a
certain location) and quantity (100 acres).Although time for performance of the sale is not specified, a
reasonable time can be inferred. Bob could have concluded the agreement by accepting the offer.

Therefore the June 30 fax is an offer.

2. Regardless of your answer to Question 1, if Joan offered to sell Bob 100 acres of undeveloped land for
$1,000 per acre, was she obligated to offer the land exclusively to Bob until 5:00 p.m. on Thursday, July
3, or until he rejected the offer, whichever happened first?

No.
A “firm offer” is one that through an express or implied term is to remain open for a certain amount of
time.

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The general rule is that a revocation of a “firm offer”, prior to its expiration has the same effect as the
revocation of an ordinary offer—that is such a revocation terminates the Offeree’s power of acceptance.
The reason a “firm offer” does not obligated Joan to exclusively offer the land to Bob is based on the
fact that Joan stating a time period for the offer is a promise to which no consideration is given and if
there is no consideration then there is no binding obligation to wait for Bob to accept or reject the land.
Therefore, the offer is just as revocable as it would have been if Joan had not promised to hold the offer
open for a certain period of time.

Therefore, Joan is not obligated to exclusively offer the land to Bob until 5:00 p.m. on Thursday, July 3,
or until he rejected the offer, whichever happened first.

3. Returning to the facts, assuming Joan offered to sell Bob 100 acres of undeveloped land for $1,000
per acre, did Bob accept her offer by the terms of his July 3 e-mail?

Yes.

An acceptance is a promise on the part of an offeree indicating a willingness to be bound by the terms
and conditions contained in the offer and is effective when sent.

Bob sent an e-mail on July 3 at 1pm which was prior to the stated time period lapsing, which would
have been at 5pm, stating that he agrees to the terms Joan set out in her fax notifying him of her intent to
offer him the 100 acres for $1,000 per acre. Also, Joan did not specify the manner in which Bob needed
to respond to the acceptance, another words, Joan did not specifically state that the acceptance must be
made by fax, which left Bob free to accept the offer by email. The fact that Bob sent an acceptance by
email and the email acceptance went into effect the minute it was sent to Joan and Joan did not specify
the manner of acceptance proves that Bob accepted Joan’s offer.

Therefore, Bob did accept Joan's offer.

4. Assuming Joan offered to sell Bob 100 acres of undeveloped land for $1,000 per acre, if Bob died
before 5:00 p.m. on July 3d, and before responding to Joan's offer, could his son, Rochester, have
accepted Joan's offer, provided he did so according to its terms?

No.
The general understanding is that death of the offeree will prevent the offeree’s representative from
accepting the offer as well as the offer may only be accepted by the person(s) to whom it was made.
The offeror is master of the offer and so controls who has the power of acceptance and so the offer can
only be accepted by the offeree. This is because the power of acceptance is personal to the offeree and
so it is understood that the power of acceptance may not be transferred to another unless it follows an
exception when the Offeree is living, but no such exceptions are present upon the death of the Offeree.
Clearly showing that Rochester, since he is not Bob and the offer was not made to him, cannot accept
the offer even if he proceeds to do so according to the terms Joan has specified.

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Therefore, Rochester is not a party to the offer and so cannot accept the offer.

Suppose, Joan started working the phones, anxious to sell the property before she left town for the July 4th
holiday weekend. Before noon, she exchanged faxes with Sam, who agreed to purchase the land for $1,050 per
acre. At 12:00 p.m., by which time Bob had already left the office and his staff had gone home early for the
holiday weekend, Joan sent a fax to Bob's office revoking her offer. No one returned to Bob's office (and,
therefore, no one saw the fax) until 8 a.m. on Monday, July 7th.

5. Was Joan's revocation effective?

Yes,

A revocation is effective when the offeror deposits it in some place that the offeree has authorized as a
place to deposit such communications. R2 §§42 & 68; see also UETA § 15(b), unless state statute
provides otherwise.

As explained in the answer to Question 2, Joan was free to revoke her offer to Bob at anytime prior to
Bob's acceptance. A further and more pressing consideration in this fact scenario is that Joan is operating
out of California which has a statute that states a revocation is effective when it is dispatched. So, the
minute that Joan dispatched the fax to Bob that the offer was revoked it cancelled Bob’s power to accept
the offer Joan made earlies.

Even without the state statute there are other considerations to see if Joan is able to revoke her offer the
land to Bod for the specified amount of time, these are: (1) has the offer been properly accepted; (2) is
there a demonstration of consideration on the part of the Offeree; (3) has performance began or is there
tender of performance under an offer to a unilateral contract; (4) is there an indication of reliance on the
part of the Offeree; (5) was the offer for a sale of goods made in writing and signed by a merchant that
provided assurance the offer would remain open. Bob had not communicated acceptance of Joan’s offer to
her yet so under this circumstance there is no obligation for Joan to exclusively offer the land to Bob. Bob
demonstrated no consideration such as placing a down payment on the land and so Joan is not obligated
under this circumstance. There was no performance being bargained for and the offer is not a unilateral
contract so Joan is not obligated under this circumstance. Bob cannot show any type of reliance connected
with the purchase of the land so Joan is not obligated under this circumstance. Finally the UCC guidelines
applies to all contracts involving the sale of goods and under the UCC “goods” are defined as “all things
that are moveable.” This includes any natural resources from lumber to man-made items such as
computers and clothing and things that were once attached to land but can now be removed from it such as
crops, but excludes all land and real estate as well as anything attached to the land. The term “goods” also
excludes services as well as intangible objects such as stocks. Joan’s offer to Bob does not fall under the
UCC and so she is not obligated to exclusively offer the land to Bob for the specified period of time. Also,
if Bob's office is an authorized place to receive this type of correspondence, Bob may be deemed to have
"received" Joan's revocation as soon as the fax was "deposited" at his office - probably within seconds of
when Joan sent it by fax at 12:00 p.m. on July 3d. Given that Bob received Joan's initial offer by fax at his
office, and that he did not tell Joan to direct future correspondence elsewhere, there is no reason to believe
that Bob's office was not an authorized place to receive Joan's fax. Because Bob received Joan's revocation
before he dispatched his acceptance (albeit from a different location) at 1:00 p.m. the same day, Joan's
revocation would have terminated Bob's power to accept. Joan's revocation would have been effective.

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Therefore, Joan’s revocation is effective.