Question

Stelwire LLC, a vintage car dealer, advertises the sale of a 1964 Ford Thunderbolt. Ralph

responds to the advertisement with an offer of $80,000 for the car. Stelwire signs a written

assurance to keep that offer open to Ralph for a fortnight. Five days before the fortnight is up,

Stelwire sells the car to another buyer. At the end of the fortnight period, Ralph tenders $80,000

for the car, but the car has already been sold. Ralph then buys the same model car from another

dealer for $90,000 and sues Stelwire for breach of contract. The court rules that Stelwire is liable

to Ralph for breach of contract and orders Stelwire to pay Ralph the difference of $10,000 he

paid extra to the second dealer for the car. Which of the following rules governs the execution of

this contract?

A) firm offer rule

B) mirror image rule

C) battle of the forms rule

D) gap-filling rule

Answer 1

A) firm offer rule

Step-by-step explanation:

The firm offer rule states that an offer shall remain open and firm until its expiration date (in this case a fortnight). Stelwire LLC can revoke an offer (anyone can) but in order to do so, it must notify the other party about the revocation. If Stelwire LLC didn't properly revoke the offer before Ralph accepted it, then they are liable for it.