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Business law

03/09/2020 Client: ericsermon1000 Deadline: 24 Hours

  At the end of the assignment you should be able to understand and explain the principles relating to contract law.


  


YOUR ANSWER SHOULD CONSIST OF A MINIMUM OF 1500 WORDS.


ALL ANSWERS MUST BE TYPE-WRITTEN WITH DOUBLE-SPACING. 


  


ASSIGNMENT


Andrew runs a business dealing in the import of high end machine parts. He is keen to capture the market on the drilling machines that allow drilling for crude oil in the fastest possible time.


He is anxious to get this part of his business to expand and hires an advertising company to do this.


As part of the advertising campaign, huge posters are placed at selected bus interchanges.


As part of the advertising campaign, Andrew states that there will be a 50% discount on all its drilling machines for the first 5 customers. 


Unfortunately, there is a typographical error in the advertisement. The words “offer only valid to the first 5 customers” is accidentally omitted from the posters.


Bob is a customer who sees the posters. He writes to Andrew saying that he wants to buy one drilling machine. He posts this letter to Andrew on the 1st of January but it only reaches Andrew on the 8th January.


Meanwhile, Choi, another customer, had contacted Andrew and enquired on the price. Andrew said that the original retail price was $100,000.00. Choi had immediately sent an email on the 30th December to Andrew stating that he will buy one drilling machine for the sum of $50,000.00, which is half the original price.


Andrew does not retrieve his email regularly and only sees the email on the 7th January.


In the meantime, Andrew realizes that the drilling machine is very popular and sells 5 of these machines to the first 5 customers at $50,000.00 by the 4th January.


Drew is yet another customer who is excited at the prospect of getting the drilling machine. He is told that the first 5 drilling machines have already been sold to the first 5 customers. Andrew tells Drew that if he wants the drilling machine then he has to pay the full price.


Drew is upset. He insists that as per the advertisement, he is entitled to the drilling machine at $50,000.00. He says that he will buy it at $50,000.00 from Andrew and that if he hears nothing further from Andrew over the next 7 days, he will consider the machine sold to him at the discounted price. 


Earl is another buyer keen to purchase the drilling machine. Upon learning that he is not one of the first 5 customers, he is very upset. He informs Andrew that he is prepared to buy the drilling machine at $70,000.00 and that he hopes to hear from him soon.


At this point in time, Andrew is left with his very last drilling machine in the warehouse and he does not mind selling it at $70,000.00. He calls Earl on his mobile but no one answers the phone. He leaves a voicemail requesting Earl to return his call.


Meanwhile, Freddie who is a good friend of Andrew is prepared to buy the last drilling machine. He easily persuades Andrew to sell it to him at $70,000.00 instead. Just as Andrew agrees, Earl suddenly returns his phone call. Earl had not retrieved his voice mail and does not know Andrew is prepared to sell the drilling machine at $70,000.00. Earl then tells Andrew that he really needs the drilling machine and so he will accept the original price of $100,000.00.


Advise parties. 

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