Tony and his roommates were looking for a new rental house for their final year at Brock. In response to an

ad posted on the Brock website, Tony met with Wanda, the owner of 215 Glenridge Avenue on January 2.

Wanda told Tony the house was for lease at $2,500.00 per month inclusive of utilities commencing May 1. Tony said he would take it, subject to the approval of his roommates. Wanda asked that he arrange this quickly and said "Due to past experiences I will continue to show the house to prospective tenants until first months rent is received after which I will consider it rented".

The next day Wanda dropped off a lease at Tony's house, which Wanda had already signed, together with a note that read:

"Please initial and sign and return together with first month's rent no later than February 1."

The lease said that the rent included "normal utilities" but that excess consumption would be billed to the

Tenant.

On January 8, two of Tony's four roommates saw the house and approved it. The others said they weregood with the majority decision. Tony called Wanda and left a voice mail message that they had given their approval.

On January 12, after obtaining cheques and signatures from his roommates, Tony mailed the signed lease and cheques to Wanda.

On January 14, Tony's two roommates who hadn't seen the house went for a tour. The existing tenants told them that the Landlord had leased the house to a group of girls. When Tony's roommates told Tony, he told them not to worry, he had already made the deal with Wanda.

On January 15, Wanda received the signed lease and cheques in the mail. She called Tony and during their discussion said that she had leased the property to a group of girls since she had not heard from Tony. Tony claimed there was a binding contract with her, but Wanda disagreed and said:

(i)she had not received Tony's voice mail;

(ii)since she had initially posted the rental on the Brock website, all discussions were simply invitations to do business and there could be no binding lease until it was signed and each party had a copy;

(iii)Tony knew that the property had been leased to another tenant;

(iv)any offer to lease had lapsed or been revoked prior to acceptance so there was no contract.

Tony reviewed his copy of "The Law and Business Administration in Canada" and called Wanda to triumphantly tell her that Wanda was wrong - there was a valid offer and acceptance and binding contract.

Required:

(i)Discuss whether there is a binding agreement between Tony and Wanda. Be certain to explain the applicable principles and how they apply to the facts as part of your answer.

(ii)Would there be a contract if, on January 14, Tony called Wanda and told her that he was not taking the house since the final 2 roommates did not like it?

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