Jones Was a Caterer; Smith Was a Florist

question 163

Multiple Choice

Jones was a caterer; Smith was a florist.Jones won a contract to provide a banquet for a convention of florists.He wanted to decorate the hall with flowers.He sent a letter to Smith describing what he wanted and asked for a price quote.Smith responded by a letter dated January 5,offering to supply the flowers for $5000.Jones received the letter on January 10 and responded on the same date saying his price was too high and that he would pay $4500.While that letter was in the mail but before it had been received by Smith,Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display.On January 13,Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time.This letter of the 13th was received on the 18th.Smith had received the letter of January 10 on January 15 and sent his letter of acceptance on the same day,and he had placed orders to his suppliers for the flowers.The letter of acceptance was received by Jones on January 20.Which of the following is true?

• A) If the postbox rule applies, there is no contract because the letter of revocation was mailed before the letter of acceptance.
• B) Jones's offer in the letter of January 10 lapsed before acceptance.
• C) If the postbox rule does not apply, there is a binding contract.
• D) If the postbox rule does apply, there is a binding contract.
• E) The postbox rule is irrelevant; there is no contract simply because Jones can't use the fresh flowers.

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