Reference no: EM132205800
Hypothetical Factual Scenario
Keith was the manager of Happy Shopping Mall and decided to renovate the shopping mall for further business developments.
On 1 May 2018, Keith posted an advertisement on local newspaper. The advertisement read ‘I am looking for a contractor who can renovate Happy Shopping Mall at a price of AUD 500,000, or nearest offer. It must be completed before 20 November 2018’. The advertisement also had the postal address of the shopping mall and Keith’s contact number.
After seeing the advertisement, Contractor A called Keith on 2 May 2018 and asked whether Keith was happy with the price of AUD 550,000. Keith replied over the phone that he would need to think about that price. Contractor A then posted Keith a letter on 3 May 2018 to offer Keith AUD 450,000. Later Contractor A thought this was a bad deal and called Keith on 4 May 2018, telling Keith to ignore the letter Contractor A posted. Keith received Contractor A’s letter on 12 May 2018.
Contractor B contacted Keith by post on 5 May 2018, and the letter said Contractor B could offer AUD 520,000, complete the renovation on 20 November 2018 and do everything else to Keith’s specifications such as using environmentally friendly materials. After receiving Contractor B’s letter, Keith replied by post on 6 May 2018, suggesting the price of AUD 510,000. But Keith had a second thought and posted a new letter on 15 May 2018, and in this new letter Keith said he took back what he said in the letter dated 6 May. However, because Contractor B was happy with the price stated on Keith’s letter dated 6 May, Contractor B posted its acceptance on 14 May 2018.
In the end, Keith decided to sign a contract with Contractor C to renovate the mall at a price of AUD 50,000. Keith was under the pressure that the shopping mall must open on 1 December 2018 so Keith could honour the lease agreements that he signed with all the shops. Keith contacted Contractor C and asked about the progress of the work. Contractor C said they were encountering difficulties due to the shortage of building materials and there may be delay, but they would do their best. As Keith was worrying about the progress, Keith took the initiative to offer Contract C AUD 30,000 more than the agreed AUD 50,000, hoping Contractor C could complete the work on time.
After having the conversation with Contractor C, Keith found a wallet on the street on his way home and there was the driver licence inside. Keith kindly and immediately posted the wallet to its owner. After a few days, Keith saw an advertisement that was posted by the wallet owner and the advertisement said anyone who found and returned the wallet could have AUD 500 reward.
Keith seeks your advice about the following:
(a) Does Keith have an agreement with Contractor A?
(b) Does Keith have a contract with Contractor B?
(c) Is Keith contractually bound to pay for the additional AUD 30,000 to Contractor C?
(d) Can Keith claim the AUD 500 reward?