PROBLEM

Ank Kumar is a sole trader who conducts a wholesale computer business in Adelaide. Bo Smith owns a retail store in a country town in South Australia and sells varying computer equipment. They have regular dealings under which Bo buys computers from Ank. These dealings are usually conducted by mail, telephone or facsimile.

On April 10th Bo sent a letter to Ank asking if she could supply him with 30 latest model XYZ computers so that he could advertise these in his June sales catalogue. Ank replied by letter on 12th April that she had none in stock, and that she would have to import some from India, but that she was prepared to supply by the first week in June at a price of $1,000 each provided that Bo ordered within the next week.

The morning after posting the letter Ank read in the financial newspapers that the Australian dollar had fallen sharply against the Indian currency. She realised that the cost of buying the computers would rise accordingly and that at $1,000 each she would suffer a loss reselling to Bo. She immediately

phoned Bo to cancel her letter but was only able to leave a message on Bo’s phone. Although she did not receive any response from Bo she did not worry as she knew from experience that Bo would check his messages daily. In fact due to a problem with the messaging service, the message was not correctly transmitted and Bo did not receive it.

On April 15th Bo received Ank’s letter and immediately phoned Ank saying he wanted the computers at the quoted price. Ank replied that she had left a message on Bo’s phone cancelling her letter and that she could not supply the computers at $1,000 each. Bo claims they have a contract and insists she go through with the deal at $1,000 each set.

Using cases to support your arguments, discuss whether Bo in correct.

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