ACTY 5320: Law of Business Obligations - Law Assignment Help

Assignment Task:

Question 1 (Learning Outcome Three)10 Marks
Contract – offer and acceptance Application Question (ILAC)

Jean had often admired the house on the corner of her street.  It was a very grand house, having been built in the 1920s.  Of particular interest to Jean was that the house had, many years ago, been owned by her grandparents.  Jean spent a lot of time at the house as a child, so it was a significant place to her.

While walking her dog one day, Jean saw and got chatting with the current owner of the house, Diane.  Diane mentioned that she had, a few days ago, been in initial discussions with a local real estate agent to put the house on the market.  Excitedly, Jean said that she would be very interested in buying the house and asked Diane what sort of price she wanted for it.  Diane said that she really did not want to sell it for any less than $1.4 million.  Jean immediately knew (although she did not say out loud to Diane) that she could not afford that sort of price.  However, Jean was aware that her cousin, Sophie, would also be interested in buying the property, as Jean and Sophie had often discussed that if the opportunity arose they could buy the property jointly and live there together, as it was a spacious house.  So, Jean said to Diane that she could consider that sort of price but would need to check a few things first.

Diane said that her lawyer had prepared for her a form of agreement to use for negotiations, with the purchase price left blank.  She went into the house to get it and she brought it out for Jean with the sum of $1.4 million which Diane had inserted for the price.  Diane signed the document and gave it to Jean and explained that she would happily accept $1.4 million from Jean, because Diane would likea quick sale with no agent’s commission or marketing fees to pay.

Jean told Diane that she would have to take the document away for consideration and that she would let Diane have a response by no later than 5pm the following day.

When Jean got home she made a lot of phone calls, including to Sophie and her lawyer.  Jean’s lawyer and Sophie were both happy with the proposal and by the next morning Jean was confident she could sign and return the agreement to Diane.

However, during the course of Jean’s phone discussions, she had spoken to a real estate agent (Janice) to try and ascertain local values.  Janice very quickly worked out which house was being sold and went to see Diane late in the afternoon with an offer of $1.6 million on behalf of a very important client who had been looking for a property like this one for some time.  Janice told Diane that the offer of $1.6 million needed to be accepted no later than 10am the next day.  

By 10am the next day, Diane had accepted the offer of $1.6 million that Janice had put forward.  Diane asked Janice to let Jean know that the house had been sold.

Janice did not want to speak to Jean personally, as she knew Jean would be upset, so Janice asked her personal assistant to deliver the news to Jean by telephone.

Once she heard the news, Jean immediately went to Diane’s house to deliver the signed agreement for $1.4 million.  Diane was embarrassed when she saw Jean but explained to Jean that Janice had made her an offer she simply could not refuse.Jean was very upset as she believed that Diane was obliged to sell the house to Jean.

Question

Is there a valid contract between Jean and Diane?
State the relevant legal rules with case law.
 

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