Reference no: EM132171003

Tom Garrity, Bill Simmons, and Edward Yang were close friends. Their friendship had developed over their mutual love for vintage stereo equipment, and the three often spent hours with each other, admiring their electronic collections, monitoring online auctions for vintage receivers and speakers, and playing music. On several occasions, Edward expressed his interest in a particular stereo receiver Tom owned, the classic Marantz Model 4400. Edward often told Tom that if he ever wanted to sell the receiver, he would like to be first considered as the buyer. Last Saturday morning, Tom and Bill were at Tom’s house. During their conversation, Tom stated “Bill, I know how much Edward loves my Marantz 4400 receiver, and I have too much stereo equipment in the house. In fact, Sarah (Tom’s wife) has given me an ultimatum: Either a good portion of the receivers and speakers go, or I go! I have decided that I will sell my Marantz 4400 to Edward for $200. It’s worth at least $600, and it’s the only Marantz receiver that I own, but I’ve decided that I would like to continue to live in this house, and my wife hasn’t given me any other options except to sell some of this stuff!” Later that day, Edward appeared at Tom’s house. Edward enthusiastically proclaimed “Tom, Bill told me about your offer, and I will take the Marantz 4400 for $200. This is the classic receiver as far as I am concerned, and I am forever grateful to you! I promise I will take care of it, and you can have lifetime visitation rights! Oh, and please tell Sarah I said ‘thanks’!” Tom was perplexed. After his conversation with Bill on Saturday morning, he had decided to keep the Marantz 4400, and sell all of his other receivers. He knew that his next statement would test Edward’s friendship: “Edward, I’m sorry, but I have decided not to sell the Marantz 4400. We can discuss selling any of my other receivers, but the Marantz is ‘off-limits’.” Edward’s reply? “We have an agreement, Tom. You made me an offer, and I accepted your offer. Here is the $200. Where is the receiver?”

1. What is the offer?

2. What is the acceptance?

3. What is the consideration?

4. Is this a valid contract?

5. Do both parties have contractual capacity?

6. Are there any contractual defenses?

7. If there are contractual defenses, what are the rebuttals to those defenses?