Question

Larson Lexus, a new car dealer, runs the following newspaper ad during the Fall of 1994. "Three '94 Lexus LS-400s must go! $45,500 each! The first three customers who arrive at our dealership on Saturday, October 8 with this ad can buy one of these cars for $45,500!" Knowing that $45,500 is a very good price for an LS-400, Mike is the first customer to appear at the Larson lot on Saturday, October 8. He hands the ad to the Larson salesman and says that he'd like to buy one of the LS-400s for $45,500. Is the dealership contractually bound to sell Mike the car at that price?

Answer 1

The advertisement might be seen as a unilateral offer to sell a limited number of cars to the first customers responding, potentially leaving Larson Lexus contractually obligated to sell the car at the advertised price to Mike, who complied with the offer's conditions.

Step-by-step explanation:

The question concerns whether Larson Lexus is contractually bound to sell Mike a car at the advertised price. In similar cases, an advertisement like the one described can be seen as an 'invitation to treat', which invites customers to make an offer to buy. It is not an offer in itself. However, because the ad specifies a limited number of items (three '94 Lexus LS-400s) for a limited number of customers at a specific price, it may potentially be seen as a unilateral offer to the first three customers who comply with the conditions stated. When Mike presented the ad on the specific date and expressed his wish to buy the car for the advertised price, he was accepting the offer, which could make the dealership contractually obligated to sell him the car at that price, barring any other conditions or exceptions not disclosed in the question.