Rajiv runs an eatery, Raj's Indian Curry, in Parklands, which he wishes to sell. He puts an advertisement in the Parklands Daily News, to the effect:

'Indian food restaurant for quick sale. Asking price, Ksh 1 500 000, o.n.o. E-mail r..v@... or drop letter at the Parklands Dropping Zone, Box No 000001 or come to my premises, No. XYZ Parklands Road, on Monday, at noon.'

Pradeep sees the advertisement and attempts to send an e-mail to Rajiv on Friday, but as her internet connection is down, the message is not sent. She decides to respond by sending a letter through the Dropping Zone. Her letter is to the following effect:

'I am willing to buy the restaurant for Ksh 1 300 000. I will come in on Monday at noon to close the deal.'

On Saturday, while playing a round of golf, Rajiv runs into Patel, his friend and they begin discussing the sale of the restaurant. Patel offers to buy the restaurant for Ksh 1 100 000, and they agree to meet on Monday 'between 11 a.m. and noon.' On Monday at noon, Pradeep goes into Rajiv's office with a cheque for Ksh 1 300 000, where she meets Patel as well, and she insists that the business is hers; Patel disputes this, arguing that he and Rajiv had reached an agreement on Saturday. With reference to the legal rules governing offer and acceptancein contract, analyse whether there is a valid contract, and on what terms. (15 marks)

CAT Two

Barrack owned a painting which he believed to be a reproduction of a work by Joe, a famous painter. He sold the painting to Donald, who also believed it to be a reproduction. Donald consulted an expert and discovered that the painting was in fact the genuine original work by Joe. Donald intended to sell it to George, an art dealer. Unfortunately, Donald's secretary wrongly wrote the price as Ksh 8,000, rather than its true value of Ksh 800,000. George sent a cheque of Ksh 8,000 and took possession of the painting. Donald has sent back the cheque insisting that George either pays the full purchase price of KSh 800,000 or returns the painting. George has refused to return the painting. Barrack later discovered that the painting was the original by Joe and wishes to recover it.

Applying the rules governing mistake in contract, examine the parties' legal positions. You may assume any such facts as will be necessary to explain your answer, but do so without changing the basic facts as presented herein