Offer and acceptance

Question 1

On a Saturday morning a developer's advertisement in the newspaper sets out a launch price for a two-bedroom unit. Mr Selamat clips the advertisement, attends the showflat, and tells the sales staff he accepts the advertised price and wishes to proceed. He is told the unit has gone and that remaining units are priced higher. He says a contract was formed the moment he accepted the advertised terms.

Consider the following statements.

1. (i) The advertisement was an invitation to treat rather than an offer.
2. (ii) Mr Selamat's statement at the showflat was the offer.
3. (iii) A contract was formed when Mr Selamat accepted the advertised price.
4. (iv) The developer remained free to accept or decline what Mr Selamat said.

1. A. (i) and (iv)
2. B. (i), (ii) and (iv)
3. C. (ii), (iii) and (iv)
4. D. (i), (ii), (iii) and (iv)

Question 2

A seller instructs her agent at the outset that she will not consider anything below $2 million, having had the property valued informally by a friend in the business. Six weeks into the marketing the agent receives a written offer of $1.95 million from a buyer who can complete quickly. Believing that the seller will refuse it, and not wishing to trouble her during a period when she has been unwell, he does not pass it on and tells the buyer it has been declined. The market softens over the following two months and the property eventually sells to a different buyer for $1.88 million. The seller has since learned of the earlier offer.

Which statement most appropriately describes the position?

1. A. The agent acted properly, the offer having fallen below the seller's stipulated figure.
2. B. The agent should have communicated the offer to the seller, that being his to decide.
3. C. The agent acted properly, an agent judging for himself which offers merit attention.
4. D. The agent acted properly provided he recorded his reasoning on the file at the time.