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15 November, 02:55

12-2. Offer and acceptance. Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer: (See page 249.)

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  1. 15 November, 06:43
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    Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer:

    • Schmidt dies prior to Barry's acceptance, and at the time he accepts, Barry is unaware of Schmidt's death.

    • The night before Barry accepts, fire destroys the equipment.

    • Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt's death.

    • Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry's estate accepts Schmidt's offer within the stipulated time period.

    Explanation:

    A contact is a binding agreement between two or more people.

    Schmidt dies prior to Barry's acceptance, and at the time he accepts, Barry is unaware of Schmidt's death: Schmidt's death would normally null this offer but because Barry is unaware of his death at the time of acceptance, and the offer is not for a personal service, the offer holds.

    The night before Barry accepts, fire destroys the equipment: there is no binding contract before a buyer accepts an offer.

    Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt's death: The option keeps the offer alive regardless of Schmidt's death as long as Barry paid for the option.

    Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry's estate accepts Schmidt's offer within the stipulated time period: the death of the offeree, in this case Barry, would normally nullify the offer but due to the option and the acceptance within the stipulated time, the offer holds.
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