When does an offer and acceptance constitute a binding contract?

UPDATED: Sep 29, 2022

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When does an offer and acceptance constitute a binding contract?

I contacted a person in another state via telephone about the sale of his classic car. We spoke by phone and I agreed to make an offer. He the car would be listed on ebay but to speak to him on the Sunday afternoon if i wanted to purchase. I did this and he asked me via text to send him an offer. I did. We negotiated and agreed on a price via text. I was due to fly to Hong Kong, so I changed my flight and said I would meet with him the next day to see the car and complete the sale. I then texted him again an hour later and asked for a copy of the title or identification to prove ownership. He stopped texting. The next day I saw he sold the car on ebay for more money. Is our contract binding over eBay?

Asked on September 8, 2015 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

If you made an offer which was accepted by him, and that offer included "consideration" on both sides--i.e. a thing or promise of value, such as your promise to pay for the car, his to in return give you the car--then it would be a binding contract. However, that contract only binds him and you it does not bind non-parties to the contract, like eBay or whomever bought the car on eBay, because contracts only bind the people who agree to them. Therefore, you can't void the eBay sale or get the car back, but could potentially sue the seller for your damages or losses, such as if you were getting a good value the difference beween what you would have paid for this car and what such a car same make, model, mileage generally costs e.g. "blue book" value.

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