BUSINESS LAW - CONTRACT
On February 7, Derrick posted two separate letters to Bert and Andy and informed
them that he was selling his 50 inches Surround Sound television set for $300,000.
He stated that they should respond by post and that the offer would remain open
until the 14thof February. Both persons received the letters in the post on the
Andy on receiving the letter thought it was a good price. He immediately called
Derrick stating that he was interested in buying the television set but he wanted to
see it first. However, he was too busy with work and on February 10, he posted a
cheque for $500,000.00 to Derrick. He also informed him in the letter that he would
come and collect the television set on February 16.
Immediately Bert received the letter, he telephoned Derrick, but he was not around
to take the call, so he left a message on Derrick’s answering machine stating that in
his opinion the television set was overpriced and he would pay $200,000 for it.
Derrick retrieved the message on February 11 from his answering machine. He
received a call one hour later from Bert stating that he would purchase the television
set for the $300,000 as he just realized that it had surround sound and picture in
picture. Derrick told him that he would not sell it to him. Bert is insiting that he has
made a valid acceptance and will sue him.
Meanwhile not hearing from Andy on the 12 the day of February, Derrick advertised the television set for sale in the newspaper to see if he could get a higher price. Derrick was visited by John on the 13th February, who responded to the Ad. John
told him that he was the famous actor “Johnny B”, showed him his identification
and gave him a cheque for $400,000 and left with the television set. On lodging the
cheque, later that day, Derrick discovered that there was no such account and that
Johnny B was a wanted crook. Derrick was embarrassed and did not report the
matter to the police. The next day, after getting a tip from one of his friends who he
had told what had happened, he went to a pawn shop located near his home and
saw the television set on a stand. The owner of the Pawn shop, Paul, told him that
on the 13th February, a man came in and sold it to him for $200,000.
Derrick received the letter with the cheque from Andy on the 15th February and
Andy visited him as he stated he would, on February 16. He told Andy that he did
not have a valid acceptance as he should have received the letter by the 14th
February. Andy is quite upset and has informed Derrick that he will sue him.
Derrick also informed you that he sold a 17 year old University student Crissy a12
inch Samsung notebook for $50,000.00 on credit of $10,000 per month but she has
only made one payment. Her best friend Mary who had accompanied her to
Derrick’s store did mention to Derrick that Chrissy had a brand new laptop and a
one year old notebook so she did not need it, however he decided to still sell her.
Derrick wants to know if he can sue Paul to recover the television set and if Andy
or Bert will be successful if they sue him. He also wants to recover the outstanding
payments from Chrissy as these are all overdue.
1). Advise Derrick on all issues arising.