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40. Which of the following statements concerning this exchange is accurate?
On May 1, an uncle mailed a letter to his adult nephew that stated: «I am thinking of selling my pickup truck, which you have seen and ridden in. I would consider taking $7,000 for it.» On May 3, the nephew mailed the following response: «I will buy your pickup for $7,000 cash.» The uncle received this letter on May 5 and on May 6 mailed a note that stated: «It's a deal.» On May 7, before the nephew had received the letter of May 6, he phoned his uncle to report that he no longer wanted to buy the pickup truck because his driver's license had been suspended.
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A is incorrect. There was no contract formed on May 3, because the uncle's original letter was not an offer. It was merely a statement indicating a possible interest in selling the truck and a suggestion as to a price that might be acceptable. It would be regarded, if anything, as a statement soliciting an offer. The nephew's letter, mailed on May 3, constituted an offer to buy the pickup truck. The uncle's note, mailed on May 6, constituted an acceptance of the nephew's offer, and was effective when mailed. And so a contract arose on May 6.
B is incorrect. On May 5 the uncle received the offer from the nephew, but had not yet accepted it. As a result, there was no contract on May 5. The uncle's note, mailed on May 6, constituted an acceptance of the nephew's offer, and was effective when mailed. Therefore a contract arose on May 6.
D is incorrect. The nephew's letter, mailed on May 3, constituted an offer to buy the pickup truck. The uncle's note, mailed on May 6, constituted an acceptance of the nephew's offer, and was effective when mailed. And so a contract arose on May 6. The law would treat the nephew's May 3 letter as an offer, even though the nephew might have mistakenly believed it to be an acceptance of an offer. The nephew's May 7 phone call was too late to constitute a revocation of his May 3 offer, since it had already been accepted. The nephew's license revocation would not constitute a defense to the existence of the contract for sale.