Business Law: using IRAC method to answer the case study

You will need to respond to the case using the IRAC (Issue, Rule, Application and Conclusion) method. As such you will be required to:

• Read and analyse the case
• Identify the issue/s
• Research appropriate relevant law / rules
• Explain the rule pertaining to the case/issue
• Apply the rules to the case
• Provide a brief conclusion of the likely outcome.

Tom is a student at Victoria University who loves sports cars. He owns a number of sports cars and is interested in buying more.

He goes to visit his friend Peter who is a law student at Victoria University. Tom discovers that Peter has a very old Mercedes Benz sports car which has been in the family for many years. It hasn't been driven for a long time and requires some repairs. Peter offers to sell the car to Tom for $300.Tom thinks this is a very good offer and accepts Peter's offer.Peter also seems pleased with the deal.Tom pays Peter the money and arranges to pick up the car the next day.

Soon after, Peter finds out that the car is worth a lot more than $300 as it is a very rare car. He realises he has made a mistake and would like to sell the car for more money. The next day, Peter refuses to hand over the car to Tom. Peter says that he would like to withdraw his offer and also argues that their agreement is void due to insufficient consideration.

Advise Tom as to whether:

(a)Peter can withdraw his offer?

(b)Their contract is void due to insufficient consideration?