]

COLLAPSE

Philip wants to sell his house and advertises it in the local newspaper at $370,000, giving his telephone number. Jim sees the advertisement and rings Philip and makes an appointment to see the house. Jim likes the house but cannot agree a price with Philip, his highest offer being $367,000, while Philip insists on $370,000. On the following Monday, Jim receives a letter from Philip offering him the house for $368,500 and saying that Jim can have until noon on Friday to think about the offer. On Wednesday evening, Jim meets his brother Garrett in their local bar. Garrett tells him thatPhilip's son-in-law bought the house earlier that day for $367,000. Jim goes straight home and writes a letter to Philip, accepting his offer to sell at $368,500. He posts the letter immediately and Philip receives it on Thursday morning, but replies by return saying:

"You are too late. I have sold the house to my son-in-law."

Advise Jim and discuss the following issues:offer and counter-offer, the status of a promise to keep an offer open, revocation of an offer and the postal rule (mailbox rule). Define the terms first.