Explain whether there is a binding agreement in each of the cases below; Dick posted a letter offering to sell goods to Harman on certain terms. Upon receipt of the letter, Harman posted a letter accepting the offer. However, the letter never reached Dick and Tom wrote to Jerry offering to sell his car to him at 500,000. Jerry acceptedTom‟s offer subject to the price being reduced to Sh. 450,000. It has become apparent that Tom is not willing to sell the car for Sh. 450,000; Jerry now writes to Tom agreeing to buy the car for Kshs. 500,000

• This problem is based on the postal rule of acceptance of offers.
• In this case it is apparent that Dick impliedly authorized Harman to communicate acceptance by post and Harman posted his letter of acceptance though it never reached Dick.
• It is obvious that there is a binding agreement between Dick and Harman. This is because at common law if the offeror expressly or impliedly authorizes the offeree to communicate acceptance by post, acceptance is deemed complete when the letter is posted whether it reaches its destination or not. Our position is consistent with the decision in Byrne V. VanTienhoven
(ii)
• This problem is based on counter offers in the law of contract.
• In this case, it is evident that Jerry did not accept Toms offer and as such there is no contract between them. Jerry‟s counter offer of Kshs. 450,000 terminated Toms offer of
Kshs. 500,000.
• Jerrys willingness to pay Kshs. 500,000 for the car is not an acceptance as there was no offer existing at the time as there is no evidence that Tom had revived the offer.
• This position is consistent with the decision in Hyde V. Wrench whose facts were substantially similar.