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6. Oskar Co wrote to Franz Co, an overseas car manufacturer, asking for the lowest price that it would charge for a specific car model. Franz Co replied that it would expect no less than $30,000. Oskar Co then wrote to Franz Co with a remittance of $30,000, asking for the car to be delivered within seven days.
In relation to the UN Convention on Contracts for the International Sale of Goods, which of the following statements is correct?
A.Franz Co’s reply to Oskar Co was an offer
B.The remittance from Oskar Co can only be regarded as an invitation to treat
C.If Franz Co delivers the car on time, this will be regarded as acceptance
D.Oskar Co’s letter with the remittance was an acceptanceStudy hub answer: “The correct answer is B.
The remittance from Oskar Co can only be regarded as an invitation to treat.”
My questions, why option C is not correct? why Oskar’s remittance is an invitation and not an offer? Wasn’t Franz’s reply of no less than $30,000 was an invitation to Oskar to make an offer.
Hm! On first sight, I can see why you might think that there is an offer somewhere in there, and that therefore there ought to be an acceptance.
Can we, straight away, get rid of options A and D? A response to a request for information (option A) is not an offer (the Bumper Hall Pen case) and, if it is isn’t an offer, then option D cannot be acceptance.
Now, option C. IF (and it’s a big IF) Franz’s reply of ‘Not less than $30,000’ is an invitation, and Oskar’s payment was an offer, again, we have a problem? Acceptance must be complete and unconditional and the introduction of ‘delivery within 7 days’ by Oskar is a material alteration to the original offer … if there, in fact, is an original offer. So, if you want to view Oskar’s remittance as an offer and not as an invitation, that’s OK. But, if that’s the case and it is an offer, it must be in a final form that is capable of valid acceptance … and the delivery deadline introduction replaces any original offer and makes this now into a counter-offer
Let’s go back to basics! Request for information, invitation, offer, acceptance.
‘asking for the lowest price that it would charge for a specific car model’ – clearly, a request for information and no legal consequences.
As a result of the receipt of the information requested, Oskar makes an invitation (by sending the remittance) inviting Franz to make an offer. But Franz doesn’t make an offer, and Oskar hasn’t made any offer. So, no offer, no acceptance, no contract.
IF Franz delivers within 7 days – what’s the issue? BUT the delivery within 7 days cannot be viewed as an acceptance because …. no offer exists capable of acceptance.
Option C cannot be correct and therefore, by default, Option B must be correct
OK?
NB this would be better on the Ask ACCA Tutor forum – that way I would be certain of seeing it!
IF all goes well and Franz is happy to receive $30,000, then what’s the issue? It’s only if there is a subsequent dispute that any of this lands in the lap of the legal profession!
That was an excellent explanation. Amazing! All my doubts relating to this question are completely clear now.
I asked chatgpt the same question, however, the answer it gave doesn’t talk about the existence of counter offer and it didn’t cover all aspects of the question from different point of view as you did.
I wasn’t aware there was a separate forum for asking exam questions. I’ll post my questions there from now on. Thank you for bringing it to my attention.
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