QUESTION 1

On 1^st January, Karl wrote a letter to Edith offering to sell to her his boat for $6,000. On the 5^th January, Edith write to Karl telling him she cannot afford $6,000 but is prepared to pay Karl $5,000 for his boat. On 8^th January, Karl replies to Edith that he will accept $5,500 for the boat. On the 12^th January, Edith write to Karl accepting his offer (of 8^th January) and that same day Karl also write to Edith telling her that he has decided not to sell the boat.

Required

Is there a binding contract between Karl and Edith? You may assume that all letters were posted on the same day they were written and delivered the following day.

Refer to relevant cases where appropriate to support your arguments.