Legal Analysis: Contract Law Issues in a Second-Hand Car Business

This case study examines several contract law issues arising in a second-hand car business owned by Dan. It uses the ILAC method to analyze four distinct scenarios. The first scenario involves a potential unilateral mistake regarding the sale of a car to Mary, where the parties had different cars in mind. The second scenario concerns Michael's attempt to cancel an order, addressing the postal rule of communication. The third scenario discusses the doctrine of promissory estoppel in relation to a contract signed by Dan with Gordon. Finally, the fourth scenario explores the concept of invitation to treat and offer/acceptance with Edgar. In each case, the legal principles are applied to the facts, and a conclusion is reached regarding the parties' obligations. Desklib is a platform where students can find past papers and solved assignments to aid in their studies.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Issue 1.............................................................................................................................2
Issue 2.............................................................................................................................3
Issue 3.............................................................................................................................4
Issue 4.............................................................................................................................4
References......................................................................................................................6

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Issue 1
Issue 1
To decide whether Mary should stick by the deal that she had offered or whether Dan
would be liable to act according to the intention of Mary.
Law 1
One of the basic essential of a contract is that the parties to the contract should agree
to the same matter at the same time. There should be a ‘consensus ad idem’ that is, a meeting
of minds of the parties. If the parties are not agreeing to the same point, then there cannot be
any kind of agreement between the. In case, they have been agreeing to different things
without realising the difference, it would be considered to be a unilateral mistake where the
parties would have the option to consider the agreement void at their own discretion (Turner,
2014). The parties will have the liberty to decide whether to give effect to the contract or to
rescind it.
Application 1
In this case, Mary offered to buy a White 2002 Honda Jazz for $14000 which was
tagged at $14999. Dan agreed to sell the car without confirming the particulars and
specifications of the car. Dan, in this case, was considering to sell a Red 2002 Hondo Jazz.
However, the parties found out later that they had been agreeing on two different things and
thus giving rise to a unilateral mistake. Here, Mary has the right to stick to her offer of buying
the white car; however, she would have the discretion of either agreeing to Dan’s offer if she
wants or rescind the agreement altogether. While, Dan would have the choice to sell the
White car to Mary that she wants or he may rescind the agreement as well.
Conclusion 1
Therefore, in this case, Mary would not be obliged to stick by the deal nor would be
Dan. They have the option to rescind the agreement.

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Issue 2
Issue 2
To decide whether Michael would be liable to accept the car even though he cancelled
the order over phone.
Law 2
Communication of offer and acceptance is another essential element of a valid
contract. The offeror must communicate his offer to the offeree and in return, the offeree
must communicate his acceptance or rejection of the offer to the offeror. Contractual
obligation begins only when both the parties have exchange their intention of offer and
acceptance. The postal rule of communication states that the letter of acceptance would be
valid only when it reaches the other party to whom it was sent. While, when a party to the
contract puts forward an offer to another over telephonic conversation and the other party
accepts or rejects such offer, then the effect is immediate (Willmott et al., 2013).
Application 2
In this case, Michael cancelled his offer of buying the 2015 Toyota CX truck over a
telephonic conversation with Dan; however by then, Dan had sent his letter of acceptance to
Michael for selling the truck which did not reach him though. The postal rule of
communication of offer and acceptance stands by Michael and gives him the liberty to
rescind the offer as per his wish, as he had not received the letter of acceptance sent by Dan.
Therefore, not having received the letter acceptance from Dan on 8 January, Michael have the
liberty to rescind the agreement on that day.
Conclusion 2
Therefore, Michael would not be held liable to carry out the agreement.

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Issue 3
Issue 3
Whether Dan would be liable to comply with the contract with Gordon.
Law 3
The doctrine of promissory estoppel stops a party to the contract from changing his
decision once he has committed to act as he had promised to the other party to the contract
(Gan, 2013). Once a party has committed to execute a contract, he cannot deny executing the
same at any excuse. This hampers the essence of a binding contract where the parties
promises to do or not to do a particular act, under the law of contract.
Application 3
In this case, Dan had signed the contract with Gordon, without reading the contract
form. The contract form clearly stated that Dan was agreeing to sell a truck to Gordon in
exchange of a certain consideration, thereby meeting the essential elements of a valid
contract. On a later occasion, Dan cannot deny selling the truck to Gordon by saying that he
had signed the contract by accident and has no intention of agreeing to it. He is obliged to
abide by the provisions of the contract that he signed, even though by accident with Gordon.
Conclusion 3
Therefore, Dan would be liable to execute the contract with Gordon by selling the
truck to him.
Issue 4
Issue 4
To decide whether Dan is liable to sell the car for $10,000 to Edgar.
Law 4
Offer and acceptance is the most basic element to form a valid contract. When a
person showcase certain products publicly to the world, it is to be considered as an invitation

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to treat. In such case, a person who wants to buy such product is to be regarded as the offeror
and the person who is showcasing the products is to be considered as the offeree, for he has
been offered to buy the product (Cartwright, 2016). When the offeree directly rejects the offer
of the offeror, there is no contract, for an invitation to treat cannot be considered as an
agreement.
Application 4
In this case, Dan was offered to buy a car by Edgar for $10,000. Dan clearly
mentioned to Edgar that the price was written wrongly and it costs much higher. Dan’s
rejection was clear and direct to Edgar on the very moment when Edgar proposed to buy the
car for $10,000. Dan was clear about the higher price of the car, that is $15,000 and if
interested, Edgar could make an offer to buy the car for $15,000, which he did not. Therefore,
Edgar cannot force Dan or make him liable to sell the car at a lesser price.
Conclusion 4
Therefore, Dan is not liable to sell the car for $10,000 to Edgar.

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References
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the
civil lawyer. Bloomsbury Publishing.
Gan, O. (2013). Promissory Estoppel: A Call for a More Inclusive Contract Law. J. Gender
Race & Just., 16, 47.
Stone, R., & Devenney, J. (2017). The modern law of contract. Routledge.
Turner, C. (2014). Unlocking contract law. Routledge.
Willmott, L., Christensen, S., Butler, D., & Dixon, B. (2013). Contract law.