>> Business Law and Ethics
James wants to buy a good laptop to do his college assignments and for gaming purpose as he has recently become interested in playing computer games. D'Cruz who owned a high end computer posted an offer by letter to James on Monday 15 June as follows:
"A good gaming computer, only used two times still looking new for sale $ 2,500. If you are interested in buying you must write to me."
The letter D'Cruz posted was delayed because of the postal strike and only reached James on 22 June. When James saw this offer he was very happy and in order not to miss the opportunity of buying the computer he immediately posted his letter of acceptance on 22 June. James letter only reached D'Cruz on 30 June.
Meanwhile, D'Cruz not receiving a reply from James believed that he is no longer interested in buying the computer, sold it to Fredrick on Friday 26 June. Fedrick made arrangements to collect the computer from D'Cruz on Saturday 27 June.
On 26 June D'Cruz and his friends were watching a movie in Cathay Cinema. Unfortunately, that night lightning struck D'Cruz's room and the fire that ensued destroyed the room and burnt down everything including the computer. Fredrick turned up to collect his computer from D'Cruz on 27 June only to realise that the computer has been destroyed by fire. Fredrick is very disappointed and wants to sue D'Cruz.
a) Advise James whether there is an enforceable contract? Discuss the relevant issues and case laws in the formation of a contract.
b) Advise Fredrick whether he has any claim against D'Cruz in contract law even though it was not his fault that the computer was destroyed by fire?
c) Suppose Fredrick and D'Cruz are friends how will this affect the creation of an enforceable contract?