Brendan Egan
Law 150
DR. JESSICA A. MAGALDI
February 25th, 2025
Case Question 1: Bernie and Phil’s Great American Surplus Store
Issue:
Did the store’s newspaper advertisement constitute a binding offer, and was Marsha Lufkin
entitled to enforce the sale?
Legal Principles:
● ADs are considered invitations to negotiate, not offers.
● An AD can be considered a valid offer only if it is clear, definite, explicit, and leaves
nothing open for negotiation.
● A store is not obligated to sell an item at an advertised price unless the advertisement
meets the conditions of a legal offer.
Analysis:
● The ad stated, “Next Saturday at 8:00 A.M. sharp, 3 brand-new mink coats worth $5,000
each will be sold for $500 each! First come, first served.”
● The phrase “First come, first served” might suggest an intent to create an offer rather than
a mere invitation.
● All things aside, the store withdrew the promotion before acceptance occurred.
● The manager asserted that the AD was only an invitation to negotiate and not a binding
offer.
Conclusion:
The store was not obligated to sell the coats at the advertised price because the advertisement
was simply an invitation to negotiate rather than a firm, solidified offer. The manager’s
withdrawal of the offer before acceptance meant no contract was established.
Case Question 3: Katherine and Paul
Issue:
Was Katherine’s revocation of her offer valid before Paul accepted it?
Legal Principles:
● An offer can be revoked at any time before acceptance unless consideration has been
given to keep it open (such as an option contract).
● A revocation must be communicated to the offeree before they accept for it to be
effective.
● If an offeree accepts before learning of a revocation, a contract is established.
Analysis:
● Katherine made an offer valid for 10 days and then mailed a letter revoking the offer.
● Before Paul received the revocation, he called and accepted the offer.
● Since revocation is only effective when received, Paul’s acceptance was valid before he
was aware of Katherine’s attempt to revoke.
● Even though Katherine believed Paul would receive the revocation in the mail the next
morning, it was not effective until actually received.
Conclusion:
Since Paul accepted before receiving the revocation, the contract was valid. Katherine’s
revocation was ineffective.
Case Question 4: Nelson and Baker
Issue:
Did a contract exist between Nelson and Baker when Baker modified the original offer?
Legal Principles:
● A counteroffer rejects the original offer and creates a new one.
● If an offeree modifies the terms before accepting, it is considered a counteroffer, not an
acceptance.
● The original offeror (Nelson) is not required to accept the counteroffer and can withdraw
from negotiations.
Analysis:
● Nelson made a written offer to purchase Baker’s home.
● Baker modified the offer before accepting it.
● This modification acted as a counteroffer, which meant the original offer was rejected.
● Nelson had the legal right to withdraw after Baker made a counteroffer because there was
no binding contract yet.
Conclusion:
Baker had no contract to enforce because he rejected Nelson’s initial offer by modifying it. No
valid acceptance occurred, so Nelson was free to walk away.
Case Question 6: Willis Music Co.
Issue:
Is Willis Music Co. liable for the incorrect pricing in its newspaper advertisement?
Legal Principles:
● ADs are generally invitations to negotiate, not offers.
● If a pricing mistake is obvious to a reasonable person, the seller is not obligated to honor
it.
● If a company mistakenly advertises a price but a customer reasonably believes it to be
valid, there might be a binding offer.
Analysis:
● Willis Music Co. advertised a television set for $22.50, but this was a mistake.
● The actual price was significantly higher, which means a reasonable person would likely
recognize the price error.
● A store may refuse to honor a mistakenly advertised price if it was an obvious
typographical or clerical error.
● The mistake doctrine applies here, courts typically do not enforce a contract if one party
is aware, or should have been aware of a pricing error.
Conclusion:
Willis Music Co. is not liable because the mistake was obvious and a reasonable customer should
have recognized the pricing discrepancy.
Case Question 9: A. H. Zehmer and Lucy
Issue:
Did Zehmer and Lucy have a legally binding contract for the sale of the farm, or was Zehmer
joking?
Legal Principles:
● A contract requires mutual assent and definiteness of terms.
● The objective theory of contracts states that courts focus on how a reasonable person
would interpret the agreement, rather than the subjective intent of the parties.
● Even if Zehmer later claimed he was joking, if his actions indicated serious intent, the
contract may still be enforced.
Analysis:
● Zehmer discussed the sale of the farm for 40 minutes, negotiated terms, and drafted a
written agreement with his wife.
● He later claimed he was joking, but the agreement was detailed and written, which
suggests serious intent.
● Under contract law, what matters is how a reasonable person would perceive the
situation, a written, detailed contract would typically indicate a valid agreement.
● Courts have ruled that even if a person claims they were joking, a contract may still be
enforced if their conduct suggested otherwise (e.g., Lucy v. Zehmer, where a farm sale
contract was enforced despite claims it was a joke).
Conclusion:
The contract was binding, and Zehmer’s claim that he was joking does not hold up. The
objective evidence suggests he entered into the agreement seriously.
