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ALVIN contract law mtq

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › ALVIN contract law mtq

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by MikeLittle.
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  • July 25, 2023 at 10:38 pm #688887
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    Alvin runs a business selling expensive cars. Last Monday he mistakenly placed a notice on one car indicating that it was for sale for £5,000 when in fact its real price was £25,000. Bert later noticed the sign and, recognising what a bargain it was, immediately indicated to Alvin that he accepted the offer and would take the car for the indicated amount. Alvin, however, told Bert that there had been a mistake and that the true price of the car was £25,000, and he could buy it at that price. Bert insisted that he was entitled to get the car at the lower price, and when Alvin would not give it to him at that price Bert said that he would sue Alvin.
    After Bert had left, Cat came in to the showroom and Alvin offered to sell her the same car for £25,000. Cat told Alvin that she would like to buy the car, subject to arranging finance, and she would be in touch soon to confirm.
    On Tuesday Del came by and offered Alvin the full £25,000 asking price, which Alvin accepted.
    They agreed Del would return on Friday to pay for the car and take it away

    Question:
    In relation to Alvin and Del, which TWO of the following statements are correct?

    • A binding contract between Alvin and Del was created on Tuesday
    • There is no binding contract until Del pays for the car
    •There is no binding contract because Alvin’s acceptance was conditional on Del returning on Friday to pay for the car
    • If Del does not return on Friday to pay for the car, he is in breach of contract

    I know the answer is A and D, but there’s offer and acceptance for contract.
    But my question is What is consideration by both parties? And intention to create legal relation is presumed Bcz it’s a commercial agreement?

    July 26, 2023 at 4:02 pm #688946
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    What is consideration by both parties? A car, and £25,000.

    What more do you need?

    July 26, 2023 at 5:18 pm #688960
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    But it’s not given yet. So it’s executory consideration right? It’s a promise to give the car in return for the promise to pay for it?

    July 27, 2023 at 7:33 am #688992
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    That’s correct. Do you have a problem with that?

    Think of your employment. At that interview that led to you being offered a job, the interviewer (on behalf of the company / firm) promised that you would be paid $X per annum.

    In exchange, you promised that you would work for the company / firm.

    There’s an example of a promise for a promise.

    OK?

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