2. Jim\'s Candy Shop is a faithful customer of Sam, a salesman for Candy Company

Question

2. Jim's Candy Shop is a faithful customer of Sam, a salesman for Candy Company, a candy manufacturer. As Sam knows, Jim's Shop is a one man operation and when Jim is busy with customers, he does not answer the phone. Sam sends Jim a fax saying, "Special Halloween Offer - Our regular $10/pound jelly beans in assorted colors and flavors, at a 10% discount, $8/pound." Shortly after sending the fax, Sam realizes that he made a mistake and calls Jim's. Jim's answering machine answers saying, "Sorry, Jim is here with customers. Please tell this machine what Jim needs to know." Sam says, "Offer from Candy Company withdrawn." He hangs up. Immediately after the customer rush is over, Jim sees the "Special Halloween Offer" fax from Sam and before listening to the message on the answering machine, sends a fax to Sam saying, "Great. I'll take 20 pounds. Make mine black and orange only." Is there a contract? Why or why not? If there is a contract, what are the terms?

Explanation / Answer

No, the contract is not valid because in this particular case there is no consideration exchanged yet.

Consideration is giving something of value in return for something else. This is mandatory to form a contract. Without consideration no contract can be formed.

For a legal contract here are some terms.

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