PLAINTIFF SEEKS COURT’S DETERMINATION ON THE VALIDITY OF THE CONTRACT ENTERED INTO BETWEEN HER AND THE DEFENDANT
Leahy v Javni [2020] VSC 680 (15 October 2020)
This case involves a contract between two parties where one alleges that she accepted the offer which makes the contract binding while the other party alleges that he revoked such offer.
Facts:
The plaintiff alleges that she entered into a contract to sell the Property to the defendant, Peter Javni, on 15 May 2017, but that he defaulted in paying the deposit of $450,000 and that she rescinded the contract because of that default. She claims the sum of $450,000 as a debt.
Mrs. Leahy contends that delivery of the signed contract to Whyte Just & Moore Lawyers, as Mr. Javni’s agent, at about 4:20pm on 15 May 2017 constituted effective communication of Mrs. Leahy’s acceptance of Mr. Javni’s offer, and so, from that point, there was a binding contract. Alternatively, Mrs. Leahy contends that Mr Cross, as her agent, communicated her acceptance when he called at Mr. Javni’s home at 4:30pm that day.
She also contends that in any event, the contract was completed by her signing the contract, after Mr. Javni signed it. Accordingly, the attempt by Mr. Javni to withdraw his offer by text message at 4:12pm was ineffective as a binding contract was already in place. She further argued that if the contract was subject to the condition precedent, Mr. Javni did not establish that approval had not been given.
Mr. Javni contends that his negotiations with Mr Cross as agent for Mrs. Leahy formed a conditional contract under which any offer by him was conditional upon Mrs. Javni first providing her approval to proceed with acceptance of the May contract. He signed the contract and provided it to Mr. Cross subject to that condition. No contract could be created until that approval was given. Mr. Cross’ delivery of the signed contract to Whyte Just & Moore Lawyers was not effective communication of acceptance, as they had no authority to accept the offer on his behalf.
Finally, he argues that no binding contract was made, as he revoked his offer at 4:12pm, via text. The same issue of revocation arises in respect of his conversation with Mr Cross at 4:30pm.
Issue:
Is there a valid contract which binds the parties?
Held:
The May contract was made between Mrs. Leahy and Mr Javni. The court considers that Mr. Cross, as agent for Mrs. Leahy, did convey her acceptance of Mr. Javni’s offer when he called at his home at 4:30pm. The court finds that Mr. Cross did in effect tell Mr. Javni that Mrs Leahy had accepted his offer or had signed the contract and that he attempted to hand a copy of the signed contract to Mr. Javni.
His refusal to accept the signed contract would not prevent a contract coming into existence. This was not a case where the contract provided for acceptance by exchange of signed parts or copies. The contract was created when Mr. Javni was put on notice by Mr. Cross’ oral communication that Mrs. Leahy had signed the contract and accepted the offer.
Conclusion: Accordingly, Mrs. Leahy succeeds in her claim against Mr. Javni for the sum of $450,000 and is entitled to judgment in that amount.
