On June 1, Farnsworth, the CEO of Thriftyco, sent a letter to Bainbridge, the regional sales manager of Technopress Corporation. The letter stated: "We offer you the job of national sales manager for Thriftyco in consideration of $200,000 a year and 2% of gross sales revenues. Acceptance must be by regular mail." On June 3, Farnsworth had second thoughts and sent mail to Bainbridge saying, "The offer is revoked, we are going in another direction." On June 4, Bainbridge sent a letter accepting the offer. On June 5, Farnsworth's revocation arrived at Bainbridge's house. Was a contract formed in this case? Why/why not?
A. Yes, a contract was formed because an offeror may not revoke before the offeree has had fair opportunity to consider the offer.
B. Yes, a contract was formed because Bainbridge accepted the offer before receiving Farnsworth's revocation.
C. No, a contract was not formed because Farnsworth sent his revocation before Bainbridge sent his acceptance.
D. No, a contract was not formed because an offeror may always revoke an offer, even after acceptance, prior to the performance commencing.
Answer (2)
A contract was formed because Bainbridge accepted the offer before receiving Farnsworth's revocation. The acceptance is valid as it was sent before the revocation arrived, following the mailbox rule of contract law. Thus, Bainbridge's acceptance created a binding agreement between the parties.
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A contract was formed because Bainbridge accepted the offer before receiving Farnsworth's revocation. Contract law allows an offeree to accept an offer, and such acceptance is valid upon being sent, regardless of any subsequent revocation. Thus, the correct answer is that a contract exists due to the timing of the actions involved. ;
