Reference no: EM132488902
Problem for analysis
Xing Li is a sole trader who conducts a wholesale television business. Zak Green owns a retail store which sells varying electrical equipment, including television sets. They have regular dealings under which Zak buys television sets from Xing. These dealings are usually conducted by mail, telephone or email. Both businesses operate from Australia.
On March 15th Zak sent a letter to Xing asking if he could supply him with 30 latest model XYZ sets so that he could advertise these in his June sales catalogue. Xing replied by letter on 17th March that he had none in stock, and that he would have to import some from China, but that he would supply by the first week in June at a price of $1,000 each provided that Zak ordered within the next week.
The morning after posting the letter Xing read in the financial newspapers that the Australian dollar had fallen sharply, losing value, against the Chinese currency. He realised that the cost of buying the televisions would rise accordingly and that at $1,000 each he would suffer a loss reselling to Zak. He immediately sent an email to Zak cancelling his letter. He did not receive a reply but this did not worry him as he knew from experience that Zak would check his emails at the end of each day. Unfortunately, Xing did not realise that the message was not correctly transmitted because his computer had developed a virus.
On March 19th Zak received Xing's letter and immediately emailed a response, saying he wanted the televisions at the quoted price. Later that day Xing telephoned Zak to inform him that he had cancelled his letter previously and he would not supply at that price. Zak insisted he go through with the deal at $1,000 each set.
Using cases to support your reasons, discuss the legal arguments that Xing and Zak will raise to show whether or not an agreement has been made for Xing to sell the television sets to Zak at the price of $1,000 each.
What is the issue? rule? application and conclusion? which rule would be applicable to state what is right and what is wrong?