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important elements in the formation of a contract

a) The two important elements in the formation of a contract are offer and acceptance. There are rules and exceptions to these two closely connected elements. Set out the LAW regarding these two elements.


b) Kevin advertised the sale of his 2 months’ old “iAM” smart-phone in the “All Things Phoney” on-line magazine on 3rd February. Bob was interested in buying the “iAM” smart-phone for his brother, Stuart. Bob contacted Kevin on 6th February to ask about the price. Kevin said that he would sell his “iAM” smart-phone for $288.00. Bob responded that he would like to check with his brother first. Kevin said that he would give the phone to his sister as a gift if Bob does wish to buy it. Bob requested for a few days to consider the purchase and get back to Kevin. Kevin told Bob to respond to him soon.

Bob met Stuart on 14th February at 9.00 p.m. to catch the movie “Respectable Me 4”. Bob told Stuart about his intentions to buy “iAM” smart-phone for him. Stuart who is a fan of “iAM” brand of smart-phones said that $288.00 was a very good deal. Bod quickly contacted Kevin but directed to a voice recording. Bob left a message that he would buy the “iAM” smart-phone for $288.00.

On the morning of 15th February, Kevin retrieved the message from Bob. However, Kevin did not respond as he had already put up a notice on 12th February in the “All Things Phoney” on-line magazine withdrawing the sale of his “iAM” smart-phone. Bob did not see the notice even though he read the on-line magazine dated 12th February.

On the morning of 16th February, there was an announcement that “iAM2” smart-phone would be launched on 18th February at the price of $388.00. Soon after this announcement, fans of “iAM” smart-phones who wished to upgrade their existing smart-phones started to sell their existing “iAM” smart-phones at $188.00 and below. When Kevin saw this, he quickly contacted Bob at 1 p.m. and requested Bob to meet him at “Catay” cinema with $288.00 cash for the smart-phone. Stuart had contacted Bob at 11.00 a.m. soon after hearing the announcement and told him not to waste his money buying “iAM” smartphone.

Kevin was furious when Bob told him that he was not proceeding with the purchase. Kevin said that he would bring the matter to court and use the voice recording as evidence of a contract. Advise Bob.

Discuss the APPLICATION of the rules and exceptions in relation of the above scenario and CONCLUDE on the formation of a contract. You may include a time-line chart or Flow-chart to help you in your analysis of the facts and the identification and application of the relevant legal concepts / exceptions / case law / statutes to the facts.

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