Joe Offered to Sell Harry His Car for a Specific

question 37

Essay

Joe offered to sell Harry his car for a specific price,and Harry indicated that he needed some time to think about it.Two days later,Joe sold the car to a third party.That afternoon,Harry phoned Joe and told him that he had decided to accept the offer and that he'd buy the car.Joe told Harry that it was too late; he had sold the car to someone else.Harry said that it had been offered to him first,and he insisted that Joe go through with the contract.Explain the legal liability of the parties.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted for profits, losses, and dividends.

Unamortized Acquisition Differential

The portion of the purchase price that is not yet allocated and remains unamortized on the balance sheet after an acquisition.

Goodwill Impairment

A charge that occurs when the fair value of goodwill drops below its recorded cost on the balance sheet, indicating a reduction in the value of acquired assets.

Mark-Up

A sum added to the purchasing price of products to account for overhead expenses and earnings.