Question

Jones is a caterer; Smith is a florist. Jones won a contract to provide a banquet for a convention of florists. He wanted to decorate the hall with flowers. He sent a letter to Smith describing what he wanted and asked for a price quote. Smith responded in a letter dated January 5, offering to supply the flowers for $5000. Jones received the letter on January 10 and responded on the same date, saying Smith's price was too high and that he would pay $4500. While that letter was in the mail, but before it had been received by Smith, Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display. On January 13, Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time. This letter of January 13 was received on January 18. Smith had received the letter of January 10 on January 15 and had sent his letter of acceptance on the same day, and had placed orders with his suppliers for the flowers. The letter of acceptance was received by Jones on January 20. Which of the following is true?

A) If the post-box rule does apply, there is a binding contract.
B) If the post-box rule applies, there is no contract because the letter of revocation was mailed before the letter of acceptance.
C) If the post-box rule does not apply, there is a binding contract.
D) Jones's offer in the letter of January 10 lapsed before acceptance.
E) The post-box rule is irrelevant; there is no contract simply because Jones cannot use the fresh flowers.

Answer 1

The correct statement is A) If the post-box rule does apply, there is a binding contract. This is because under the post-box rule, the acceptance is effective when sent, which in this case occurred before the revocation was received.

Step-by-step explanation:

The scenario presented revolves around the post-box rule, which is a principle in contract law that determines the moment at which an offer is considered accepted. Typically, the rule states that an acceptance of an offer becomes effective when it is posted, not when it is received by the offeror. In this instance, Jones sends a letter attempting to renegotiate the price for Smith's florist services, followed by a letter of revocation, while Smith sends a letter of acceptance after the first letter but before he could reasonably have received the letter of revocation.

Under the post-box rule, if it applies, then there is a binding contract as soon as Smith posted his acceptance on January 15, which happened before he could have received Jones's revocation. Therefore, the correct statement is:

A) If the post-box rule does apply, there is a binding contract.

However, it is important to consider that if the post-box rule does not apply, and acceptances are only effective upon receipt, then the revocation would take precedence since it was sent before Smith posted his acceptance, making there no contract.