Able is jogging in his neighborhood and as he goes by Baker’s driveway, he sees Baker’s old red Camaro automobile with a “For Sale” sign. He inspects the car and then asks Baker the price. Baker says, “I wouldn’t sell it for less than $500.” Able replies, “I accept your offer,” and attempts to give Baker the cash. Baker refuses and declines to sell. Able sues for breach of agreement. Who wins and why?
DECISION: Able v. (Baker) (circle one)
RULE(s) OF LAW: (Write the generic rule(s) here; do not incorporate the facts of the above case.)
A valid contract requires an agreement (offer and acceptance) between two or more parties, which the court will enforce in the event of a breach.
In order for there to be a valid offer, the offeror must have a present and definite intent to contract. It must be more than preliminary negotiations (“Can we make a deal here?”), sales talk (“This car is a great deal”), invitations for offers (“I would expect to receive at least $500”), or requests for more information (“Does this car come with a CD player?”).
APPLICATION: (Discuss the rule stated above as it applies to the problem/parties, reasoning to a conclusion.)
The issue here is whether Baker’s statement constitutes a valid offer. His comment that he “wouldn’t sell it for less than $500” does not indicate that he has a present and definite intent to sell the car for $500. Rather, it appears to merely set a floor or lowest price he would consider, and to invite further discussions or negotiations with Able to finally agree upon a mutually acceptable price. It was an invitation for an offer, preliminary to an actual offer.
Therefore, since there was no valid offer, there cannot be a legal agreement that would bind Baker. So, Able loses.
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