ExpertACCA · Question 46 · The law of obligations
Section B - Scenario 1
NovaStream Ltd is a tech startup developing AI software. On 1st May, NovaStream emails a supplier, DataCore, offering to buy 50 servers for £100,000, stating 'Please reply by 5th May'. On 2nd May, DataCore posts a letter accepting the offer. On 3rd May, NovaStream finds a cheaper supplier and emails DataCore revoking the offer. DataCore's letter of acceptance arrives on 6th May.
Has a binding contract been formed between NovaStream Ltd and DataCore?
Section B - Scenario 1
NovaStream Ltd is a tech startup developing AI software. On 1st May, NovaStream emails a supplier, DataCore, offering to buy 50 servers for £100,000, stating 'Please reply by 5th May'. On 2nd May, DataCore posts a letter accepting the offer. On 3rd May, NovaStream finds a cheaper supplier and emails DataCore revoking the offer. DataCore's letter of acceptance arrives on 6th May.
Has a binding contract been formed between NovaStream Ltd and DataCore?
Answer options:
No, because the revocation was communicated before the acceptance was received.
No, because the acceptance arrived after the 5th May deadline.
Yes, because the postal rule applies and acceptance occurred on 2nd May.
No, because an email offer must be accepted by email.
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