Reference no: EM132189856
Case Analysis In response to Bill's request for a price on high grade fuel oil, Sam, a high grade fuel oil wholesaler, wrote to Bill, a high grade fuel oil retailer, on December 20, 2008: "I offer to supply you with high grade fuel oil, at the price of $14.00 per gallon. Because of your past favors, this offer will remain open, (signed) Sam." On December 22, 2008, Bill wrote to Sam stating that he was considering buying high grade fuel oil in 2009, but Bill did not place an order for high grade fuel oil at this time. Sam received Bill's letter on December 24, 2008. On January 8, 2009, Bill ordered 40,000 gallons of high grade fuel oil from Sam, which were delivered and paid for at the rate of $14.00 per gallon. On March 7, 2009, the price of high grade fuel oil rose to $17.00 per gallon generally throughout the trade. On March 9, 2009, Sam mailed a letter to Bill stating: "I revoke my December 2008 offer." Sam's letter was misdirected by the post office and Bill did not receive it until March 16, 2009. Bill placed additional orders, all by mail: on March 10, 2009, for 50,000 gallons of high grade fuel oil; on March 17, 2009, for 70,000 gallons of high grade fuel oil; on March 30, 2009, for 100,000 gallons of high grade fuel oil. Sam received all the orders two days after they were mailed by Bill, but Sam has refused to fill any of Bill's March 2009 orders. On April 5, 2009, Bill purchased 55,000 gallons of high grade fuel oil from Tom (a competitor of Sam). The cost was Tom's regular price of $20.00 per gallon, although Bill admitted later that by shopping around he might have been able to buy the high grade fuel oil at $18.00 per gallon.
According to the "Mailbox Rule," a revocation is effective on the date it is mailed if it has the corect address and proper postage.
True False
Bill's order on March 10, 209, constitutes a valid acceptance of Sam's offer and therefore creates a valid contract.
True False