Stelwire LLC, a vintage car dealer, advertises the sale of a 1964 Ford Thunderbolt. Ralph responds to the advertisement with an offer of $80,000 for the car. Stelwire signs a written assurance to keep that offer open to Ralph for a fortnight. Five days before the fortnight is up, Stelwire sells the car to another buyer. At the end of the fortnight period, Ralph tenders $80,000 for the car, but the car has already been sold. Ralph then buys the same model car from another dealer for $90,000 and sues Stelwire for breach of contract. The court rules that Stelwire is liable to Ralph for breach of contract and orders Stelwire to pay Ralph the difference of $10,000 he paid extra to the second dealer for the car. Which of the following rules governs the execution of this contract?

Question

Quizplus · Accepted Answer

The firm offer rule applies in this scenario. A written assurance to keep an offer open for a certain period of time creates a firm offer that cannot be revoked during that time. Stelwire breached this rule when they sold the car to another buyer before the fortnight was up. Thus, Ralph had the right to rely on the offer and is entitled to damages for breach of contract.

Stelwire LLC, a Vintage Car Dealer, Advertises the Sale of a 1964