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Badger T) Salesman, a used car dealer, ran a newspaper advertisement during the month of May, 2018

Law Nov 21, 2021

Badger T) Salesman, a used car dealer, ran a newspaper advertisement during the month of May, 2018. The advertisement read as follows: "Two 1965 Ford Mustang Convertibles - fully restored, must go! Each car is equipped with a 289 Cubic Inch engine, 4-speed transmission, red body with a white interior. The first car has 47,812 original miles and the second car has 52,447 miles. Each car is priced at only $45,500! The first two customers who arrive at our dealership on Saturday, May 12 with cash or a cashier's check can buy one of these cars for $45,500!" Knowing that $45,500 is a very good price for these classic cars, Carl Collector is the first customer to appear at Badger's used car lot on Saturday, May 12. He hands Badger a copy of the ad along with a cashier's check for $45,500 to buy one of the Mustangs. Badger refused to sell either car, claiming that there was an error in advertisement. "The price of the car should have been $75,500" claims Badger. "That's unfair" yells Carl. "Either sell me the car, or I'll see you in court!" Again, Badger refused to sell either car at the advertised price. Is the dealership contractually bound to sell Carl the car at that price? Does a contract exist between Badger and Carl? Discuss whether each of the elements of a contract—mutual assent, consideration, capacity, and legality—exists in this case.  

Expert Solution

The dealership is not bound to sell the car at that price. An advertisement is an invitation to treat. It invites people to make offers. After the offer is made it may or may not be accepted. So in this case Carl makes an offer which is refused by the dealership. There is no contract between Badger and Carl since there has been no acceptance.

Mutual assent does not exist since Badger has refused to accept the offer, Consideration does not exist since it is disputed.

Capacity to contract exists as both parties are capable of contracting, and

Legality also exists in this case as the contract for sale of car is legal.

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