Question

Clean machines company (clean) makes washing machines. over the phone, clean offers to sell dealers appliance outlet (dealers) one hundred model ez2000 washers at a price of $150 per unit. clean says that it will keep the offer open for ninety days. dealers responds that within two or three weeks it will decide whether to accept. one week later, clean faxes, and dealer receives, notice that the offer is withdrawn. dealer immediately phones clean to accept the $150-per-unit offer. when clean refuses to deliver at that price, dealer files a suit. clean asserts, first, that there is no contract and, second, that if there is a contract, it is unenforceable. please discuss clean’s assertions, is clean correct? 2. during a sales call, tune products, inc., offers to sell to unlimited sales company "one hundred mp3 players at $50 a piece, subject to certain specific delivery dates." unlimited replies with a signed purchase order that reads, "accept your offer for 100 mp3 players at $50 each; delivered to our warehouse." tune does not respond or deliver the goods. unlimited files a suit for breach of contract, to which tune answers that there is no contract because unlimited’s purchase order contained additional terms and is not signed by tune. can unlimited recover? explain.

Answer 1

Clean's assertion that there is no contract and that even if there is, it is unenforceable is incorrect. In the first scenario, a contract was formed when the offer was accepted before the withdrawal notice. In the second scenario, Unlimited's purchase order was a valid acceptance and Tune's failure to respond or deliver the goods constitutes a breach of contract.

Step-by-step explanation:

Clean Machine Company's assertion that there is no contract in this scenario is incorrect. Contract law requires three elements: an offer, acceptance, and consideration. In this case, Clean made an offer to sell 100 model EZ2000 washers to Dealers at a price of $150 per unit, and Dealers responded within a reasonable time period. The fax notification that Clean sent to withdraw the offer was not effective until it was received by Dealers. Thus, a contract was formed when Dealers accepted the offer before receiving the notice of withdrawal.

Regarding the enforceability of the contract, Clean argues that the offer was not supported by consideration because it was revocable anytime before acceptance. However, under the common law rule, an offeror can revoke an offer anytime before acceptance unless the offer is supported by an option contract.

In the second scenario, Tune Products, Inc.'s claim that there is no contract is incorrect. Under the mirror image rule, an acceptance must be unconditional and match all terms of the offer. While Unlimited's purchase order contained additional terms, it was a valid acceptance because it did not materially alter the terms of the offer. Tune's failure to respond or deliver the goods constitutes a breach of contract, and Unlimited can recover damages.