Keith Avondale is in the market for a new “big screen” flat-panel television. Wh
ID: 423805 • Letter: K
Question
Keith Avondale is in the market for a new “big screen” flat-panel television. While reviewing the Sunday newspaper, he notices a full-page advertisement from “Transistor Town.” The advertisement includes a 45-inch flat-panel television for $299. Surprised by the remarkably low price, and eager to purchase his new luxury item, Avondale makes plans to “open the store” on Monday morning. Avondale is the first customer to arrive at the store on Monday, waiting outside when the front doors open. He rushes into the store and announces to the first sales representative he sees, “I will take a 45-inch flat-panel television for $299!” The sales representative immediately refers Avondale to the store manager, who directs Avondale to his office. The store manager explains to Avondale that the advertisement was an unfortunate mistake, resulting from miscommunication between Transistor Town and the newspaper publisher. The manager goes on to say that the intended advertise price was $2,999, but that he would be willing to sell the described television to Avondale for $2,449, Transistor Town’s cost for the television. Avondale objects, demands that Transistor Town sell the television for $299, and informs the store manager that his brother is a trial lawyer.
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?
Explanation / Answer
1. The offer, in this case, seems to be from Transistor town to sell 45-inch flat-panel television for $299. In general, though advertisements are considered an invitation to negotiate and not an offer to sell.
2. Acceptance here seems to be Avondale's acceptance to buy the television for $299.
3. Consideration for Avondale is Television and consideration for Transistor town is the money they will get from buyer for selling television.
4. This is a valid implicit contract. However, it is voidable due to misrepresentation of information. Further. Advertisements are an invitation to negotiate and there is no mutual agreement between Avondale and Transistor town.
5. No. Transistor town's advertisement has a mistake due to the newspaper publisher. They do not have a contractual capacity.
6. Yes, there are contractual defenses for Transistor town if they can show a proof that they shared price of $2.999 with the newspaper publisher, however, a mistake happened due to the newspaper publisher. It is a big misrepresentation which renders any implicit contract due to advertisement voidable.
7. The rebuttal from Avondale's perspective would be that Transistor town should have been more careful with the advertisment that had been placed. Due to facts in the advertisment, he visited the store early morning on Monday. Further, if it was a mistake , Transistor town should have worked wiith newspaper to republish correct information or rectify their implicit offer thru another advertisment. Since none of the steps were taken to rectify such a big error, the offer stood valid on Monday.
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