Question 1

Kienda advertises his BMW car in a local newspaper. The price is stated as 15,000. He receives a telephone call from Roshi, who says, "I will give you 13,500 for the car." Kienda replies, "You can have it for 14,000". Roshi asks for time to think about it and Kienda agrees.

The next day he receives a letter from Jyoti. The letter reads, "I enclose a cheque for 14,000 in payment for your BMW motor vehicle. If I don't hear from you tomorrow, I will come to collect the car."

Later that day he is visited by Hank, who offers to pay 14,500 in cash. Kienda accepts the offer. As Hank and Kienda are exchanging the money for the car keys and logbook, Roshi arrives and purports to accept Kienda's offer to sell for 14,000, and Jyoti arrives, expecting to collect the car.

a)Explain the rules relating to offer and acceptance in the formation of a contract.

a)Advise Kienda of his legal position in contract.

(33 marks)