Case Scenario

Due to petrol prices increasing dramatically in recent months, Morgan decides to sell his Mercedes Benz G- Wagon, and is considering taking the Public Transit on a regular basis as an alternative. Morgan places an advertisement in his car window on 27th July stating:

'Mercedes Benz G-Wagon excellent condition, one owner $90,000 or nearest offer. Please contact Morgan on 647 xxx xxxx (evenings) or 416 xxx xxxx (during office hours 8.30-4.30pm).'

Mica (Morgan's neighbor) on seeing the advert earlier that day, decides to contact Morgan that evening, and arranges to inspect the vehicle. After inspecting the vehicle Mica states that he will contact him, if he's still interested.

On July 30th, Suzan calls Morgan's mobile number after inspecting the vehicle (the previous day), and offers $89,500. Morgan is delighted and says 'how about $89, 800?' Suzan states that she will need to discuss this with her husband, Morgan tells her to call back at 6 p.m.

Suzan contacts Morgan on his mobile phone at 7.30 p.m; however the phone is switched off. As there is no facility to leave a message, Suzan tries his work number the following day, however Morgan is at a conference so she leaves a message on his answering machine, stating that she definitely wants the G-Wagon Range Rover for $89,800. Morgan doesn't return to his desk until late that afternoon and fails to listen to his answering machine that day. Suzan then tries his mobile in the evening but it's still switched off.

Vishnu, a dedicated car dealer, contacts Morgan the next day (August 1st), on his mobile phone, stating that he's really interested in the vehicle, and arranges to meet Morgan during his lunch break to inspect the vehicle. Morgan meets Vishnu, and accepts an offer of $90,500 from Vishnu.

Morgan is delighted with the sale and decides to purchase a pair of Gucci shoes. When he enters the shop, he sees a price tag by a pair of Gucci shoes for $189. He's always wanted a pair but could never afford them, so thinking that the shoes are on sale, attempts to purchase them. When he gets to the till point, the cashier scans the bar-code on the box and informs Morgan that shoes are $280. Morgan refuses to pay $280, and demands he should have the shoes for $189.

Mica and Suzan contact Morgan the next day (August 2nd), demanding the vehicle for the advertised price.

Advise Morgan.

Tips:

Think about the issues we discussed in class. E.g. Negotiation of contracts, invitation to treat, counter offer, acceptance (whether either Mica or Suzan gave a proper acceptance). Remember: Acceptance should not be conditional. Your advice will centered on the fact whether there was a valid offers, acceptance et.c.