Lisa is planning to open a new coffee shop and is looking for some modern tables and chairs to furnish it with. Her friend Tom is a carpenter so she asked him if he could make her six tables. Tom quoted the price of $3000 for all six tables and said that he is currently talking to Bob, the timber supplier regarding sourcing the appropriate timber. Bob emailed Tom saying:
“Yes, I think I have the right timber. For what you need it should be around $1800.” Upon receiving the quote Lisa responded by email as follows: “Good, make sure that it is a hardwood and light in colour. Let’s agree that $3000 is a final price including timber and your labour.”
A few days later Tom emailed Lisa that the price has now changed to $3600 as the timber is more expensive than he thought. He also wrote: “Yes, of course, I will make sure that it will be hardwood but I cannot guarantee the colour as it varies between different batches of timber. Also, the timber merchant would like $500 deposit and I am short on cash. Does it all sound ok?”
The next day Lisa transferred $500 to Tom’s account. Some weeks later Tom delivered the tables to Lisa but she was not happy: “These are just too dark! I asked you specifically to make them light in colour. Take them away and I want my $500 back!” Tom was really upset and said: “You cannot do it! We have a contract! I don’t have any money left after I paid for the timber and even if
I wanted I cannot pay you back the $500.” Lisa responded: “No, we don’t have a contract! I never signed anything. And as I still own you $800 from our trip last year, keep my $500. Now I don’t own you anything.
Question 1. Has a contract been formed in this scenario? Question
2. Does Lisa own Tom anything?
PLEASE USE IRAC METHOD!
In your answer, you need to define and apply all four contract formation elements learned in class and analyse the scenario with reference to the relevant legal principles. Please make sure that you support your answers with the relevant cases discussed in class.
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