Case study

Gabriele has always admired his Cousin James's dark blue AUDI estate car and often said that he would

love to buy it if James ever wanted to sell it. Gabriele has been a car enthusiast for many years and has

an extensive knowledge of cars particularly high performance European models and is a massive fan of

AUDI's particularly estate models as he feels they are less conspicuous and quite cool as well as

practical for carrying luggage and other gear.

James however considers a car is only a device for transport and has little other interest in them. His

father bought him the car as a present when he completed his undergraduate degree many years ago. As

his car is now almost 17 years old, James decides that he should move on to a more modern car that is

smaller as he no longer needs the extra room of an estate model. He remembered what Gabriele has

often said about buying the AUDI and decides to offer the car to him next time they meet.

The following week James mentions that he would like to sell his car and offers it to Gabriele for $8000

which he thinks is a fair price for a 15 year old European car. Gabriele is rather surprised and tells

James that he will think about it and that he will call him tomorrow morning. Gabriele is happy with

this arrangement as he is well aware that the AUDI may be old but is in fact a rare 'RS4' 6 speed

manual estate model built exclusively for the Australian market in very limited numbers and is easily

worth more than $25000. He often wondered why James's father bought such an expensive car for

James who did not seem even slightly interested in such a special car and is better suited to an

Automatic transmission car anyway.

While on the internet that night James begins to worry whether the price he discussed with Gabriele was

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excessive as they are cousins and he wouldn't want to overcharge him. James decides to have a look

online for help in establishing the value of his car and sees a link to an online car sales website.

Although he couldn't find an example of a car like his in the classifieds, he clicked on the 'research' link

and went through the steps to obtain a value for his car. He is shocked to learn that his car is listed as

having a private sale price range of $25,500-$28,400 with a note that the manual estate model is even

more difficult to locate and more expensive as a result.

He decides to ring Gabriele first thing next morning and tell him that he can't sell the car for $8000

because;

1. He has discovered that it is valued at much, much more.

2. That there is no agreement anyway as they are cousins.

3. He changed his mind about selling the car to Gabriele last night.

However, when James rings Gabriele to give him the bad news, Gabriele interrupts and says they have a

deal and that he would like to collect the car at lunchtime.

Question:

1. Using the 4 step process, consider whether the elements of intention and consideration required for the formation of an enforceable contract between Gabriele and James have been satisfied. and

2. Assume that the elements of intention and consideration required for the formation of a contract exist in the above scenario. Using the 4 step process, also consider whether the element of agreement required for the formation of a contract between Gabriele and James is satisfied.