Question

Mary offered to sell Mike several pieces of rare Chinese art at a very good price because they were duplicates in her own collection. Mike could not accept the offer at that time, but he did give Mary $500 in return for her promise to keep her offer open for three (3) weeks. Mike returned with the agreed-upon balance two weeks later to find that Mary already had sold the pieces she had offered to sell to him. Mary explained that she had been able to get a better price from another buyer. She offered to return Mike's $500 and insisted that this was all she was obligated to do. Is Mary right?

Answer 1

Answer: She is not.

Explanation:

It would seem as though that Mary got into a type of contract known as an Option Contract or more precisely, a Call Option Contract simply called a Call.

In this type on contract, a seller gives a buyer the right to buy a good or service at a certain price within a set period.

Mary agreed to sell the rare Chinese Art for a certain amount which Mike could not pay but she promised to give him 3 weeks to take it within which he can pay and collect the item.

Mike returned in 2 weeks which was within the range of time allowed and so she should have kept the offer open for the time she said she would.

She is wrong to believe that all she owes him is his down payment. She broke a contract.