Contract Law: Alan's Agreement with Bill
Does Alan have a contract with Bill for the sale of the home unit?
Alan is a tenant of a home unit owned by Bill. Ten days ago, Alan received a letter from Bill expressing interest in selling the flat and offering it to Alan for GHC150,000.00. Alan agreed to buy the home unit at the specified price in a letter sent three days later. However, Bill later changed his mind about selling the property. Does Alan have a legally binding contract with Bill for the sale of the home unit?
Yes, Alan has a contract with Bill for the sale of the home unit.
Alan accepted Bill's offer to buy the property at the specified price, forming a legally binding agreement. In this case, a contract is formed between Alan and Bill for the sale of the home unit. Bill made an offer to sell the home unit to Alan at a specific price of GHC150,000.00 in the letter. Alan accepted this offer by posting a letter agreeing to buy the home unit at the price set out by Bill. Acceptance can be communicated by any reasonable means, including post, unless the offer specifies a particular method. By sending the acceptance letter, Alan communicated his acceptance to Bill, creating a valid contract.
The general rule is that a contract is formed when there is an offer, acceptance, consideration, intention to create legal relations, and certainty of terms. In this case, all these elements are present. Bill made the offer to sell the home unit, Alan accepted the offer, and the price of GHC150,000.00 is a clear term of the contract. There is also an intention to create legal relations as both parties are involved in a transaction involving the sale of property.
If Bill later changes his mind and decides not to sell the home unit, he cannot unilaterally revoke the contract. Once an offer is accepted, it forms a binding agreement between the parties. Alan can take legal action to enforce the contract and seek specific performance or damages.