Answer:
Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer:
• Schmidt dies prior to Barry’s acceptance, and at the time he accepts, Barry is unaware of Schmidt’s death.
• The night before Barry accepts, fire destroys the equipment.
• Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt’s death.
• Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry’s estate accepts Schmidt’s offer within the stipulated time period.
Explanation:
A contact is a binding agreement between two or more people.
Schmidt dies prior to Barry’s acceptance, and at the time he accepts, Barry is unaware of Schmidt’s death: Schmidt's death would normally null this offer but because Barry is unaware of his death at the time of acceptance, and the offer is not for a personal service, the offer holds.
The night before Barry accepts, fire destroys the equipment: there is no binding contract before a buyer accepts an offer.
Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt’s death: The option keeps the offer alive regardless of Schmidt’s death as long as Barry paid for the option .
Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry’s estate accepts Schmidt’s offer within the stipulated time period: the death of the offeree, in this case Barry, would normally nullify the offer but due to the option and the acceptance within the stipulated time, the offer holds.
