COML 203 Legal Environment for Business
Trimester One 2025
Tutorial 2: Formation of Parol Contracts: Offer and Acceptance
A. INTRODUCTION
Tutorial 2 forms the basis for Worksheet 1 due on 10 April 2025. The tutor will lead discussion in the Tutorial about how to approach the legal issues. They will not be providing you with an answer. You must form. your own opinion, giving legal reasons (ie applying to the facts legal propositions you have been taught) and recording that opinion in your Worksheet.
Your Worksheet answer should be expressed in well written English in an answer of not more than 500 words. You should do you best to write a coherent argument justifying your conclusion. The way in which you present your Worksheet is important. That is because you are training for a profession. You must use your own words and must submit a Worksheet without using AI. If you use AI, you will receive 0% on the assignment because it is not your work.
B. FACTS AND QUESTIONS FOR DISCUSSION
Read and become familiar with the following facts.
On 11 April 2024 Michael Evans advertises his late model EV car for sale on TradeMe.
On 13 April 2024 Andrew Smith emails Michael and states ‘I am prepared to pay you $50,000 for your car.’
Not having received any other interest Michael calls Andrew by telephone on 20 April 2024, and says ‘I accept your offer, subject to you increasing the purchase price to $70,000’.
Andrew responds to Michael ‘I will get back to you’.
Two weeks pass by, and Michael has not heard from Andrew. Alice Margrave sees the Michael’s advertisement and contacts him by telephone on 4 May 2024. She asks him ‘will you accept $60,000 for your car’.
Michael says ‘Yes, on the condition that settlement occurs on 20 May 2024’.
Alice responds ‘Yes OK’.
The following day Andrew calls Michael by telephone and says to him ‘I accept your offer to sell me the car for $70,000’. Michael responds ‘It is too late, Andrew. I have already sold the car to someone else’.
Andrew is upset and seeks your legal advice.
You should attempt to answer the following questions before the Tutorial so that you can contribute to the discussion:
On the facts, what kind of contract is sought to be formed if any? It is plain no deed of covenant was intended. Hence, the contract must be parol and either unilateral or bilateral.
How does the formation of a unilateral contract differ from the formation of a bilateral contract? Both unilateral and bilateral contracts are formed by offer and acceptance but offer and acceptance mean different things in the context of each type of contract.
Characterise each interaction between Michael and the other two parties viewed from a legal perspective. Think about the legal propositions you have learned relating to offer and acceptance. Try to form. a view about which legal proposition might be applicable to each interaction.