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Mock Exam - Business Law
Example 1:
Bill collects coins. His friend Jim knows that and when he gets to know that Susan wants to
sell an interesting set of coins at a price of € 150 he tells her that he wants to buy this set of
coins in the name of Bill. Susan accepts.
When she wants to deliver the set of coins to Bill he refuses to take delivery: He has just made
a different deal and does not want to spend so much money on his hobby.
Does Bill have to take delivery and to pay € 150 to Susan?
Solution
Bill will have to take delivery and to pay if there is a valid contract on sale, § 433 BGB.
A valid contract consists of an offer and a corresponding acceptance. In this case there are no
direct negotiations between Susan and Bill.
Susan has offered the coins to Jim who has accepted her offer in the name of Bill. According
to § 164 BGB a declaration of intention which a person makes within the scope of his own
power of agency in the name of the principal takes effect directly in favour of and against the
principal. It is obvious that Jim explains that he does not want to buy the coins himself, but he
wants to buy the coins in the name of Bill. So he shows quite obviously that he is acting for a
third person.
