On Friday, Billy mails Andrew an offer, which Andrew receives on Monday. On Tuesday, Billy mails Andrew a revocation, which Andrew does not receive until Thursday. Andrew takes no action when he receives the revocation. Meanwhile Andrew mailed Billy an acceptance on Wednesday that Billy receives on Friday. Is a contract formed, and if so, on what day?

Business · High School · Thu Feb 04 2021

Answered on

Answer: Yes, a contract is formed in this scenario under the mailbox rule. According to the mailbox rule, an offer is considered accepted at the time the acceptance is mailed, not when it is received by the offeror. In this case, Billy mailed the offer on Friday, which Andrew received on Monday. Andrew then mailed his acceptance on Wednesday, which is before he received Billy's revocation on Thursday.

Therefore, the contract is formed on Wednesday, the day Andrew mailed his acceptance. This is because Andrew's acceptance was effective upon dispatch (when he mailed it), which means it is legally binding from that time. Billy's revocation, which was mailed on Tuesday but not received until Thursday, is irrelevant because it was not communicated to Andrew before he sent the acceptance.

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