Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, \
ID: 2648571 • Letter: M
Question
Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, "Koji, I think your 2003 Ford SUV is worth $20,000. I will give you $20,000 cash for it." Koji receives the letter, but believes his car isn't worth more than $14,000 due to the manner in which he drives the vehicle and due to the weather in Florida where he resides.
Maria's letter was mailed on Monday. When she didn't hear from Koji by Wednesday, she sent an e-mail on Wednesday afternoon with the same message, and asked whether he received her letter. Koji received Maria's letter on Wednesday, but did not receive the e-mail until Friday afternoon, due to server problems. In the meantime, Koji sent a fax late on Friday stating, "Are you sure you still want to buy my car for $20,000? I accept your offer."
On Saturday, after some research, Maria decided the Ford SUV was not worth what she thought. To make certain Koji would know this fact, she sent Koji a letter via Federal Express stating, "Your SUV is not really worth $20,000." On Monday morning, Koji received the Federal Express letter from Maria. Also on Monday morning, an hour later, Maria received Koji's fax at work.
Has a contract been formed here? Why or why not? Identify and explain the stages of contract formation as they occurred in this scenario and analyze them in this context from a contract formation standpoint.
Explanation / Answer
The events took place in the following order:
Stage 1- Maria (buyer) sent Koji a letter expressing her willingness to buy the car. No response for Koji
Stage 2- Maria sent an email with the same message and confirmimng if the letter was received. Email could not be received until Friday.
Stage 3- Koji responded to Maria's letter via fax and expressed his acceptance to the offer. The wasn' t received by Maria.
Stage 4- Maria sent another letter stating the price qouted by her initially isn't FMV. The same day Maria also receives the fax of Koji accepting the offer of $ 20,000.
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Analysis of events:
At a very basic level, a contract is entered into when an offer is made, offer is accepted and communicated.
In the given case, Maria made an offer to Koji for $20,000 through a letter and then email. It is to be noted that contracts negotiated by 'electronic message' are formed when acceptance is received.
However, Koji responded to Maria's letter accepting the offer but also made another offer by stating if she was sure to buy. This is a counter offer which kills the original offer. Thus, at this stage the contract has not been formed.
After research when Maria sent another letter stating the worth is not as expressed earlier could be taken as rejection to Koji's offer now which also received by Maria the very same day of sending her rejection.
Accordingly, no contract has actually been formed.