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Ravi owned a rental property near a university. For several years, Ravi had rented the house to Alice while she completed her university studies. Alice was very fond of the house and had painted it and made a number of upgrades during her tenancy. She and Ravi had talked casually from time to time about the possibility of her purchasing the house from Ravi. In January (about four months before her graduation), Ravi told Alice that he would be willing to sell her the house when she graduated for its “market value.”
Alice graduated in April but did not find employment until August of that year. On August 15, while on holiday celebrating her new job, she posted a letter to Ravi stating that she was ‘accepting his offer’ to sell the house for ‘market value’.
Unaware of Alice’s letter, on August 17 Ravi entered into a contract to sell the property to a property developer. He received Alice’s letter on August 18.
Advise the parties of their rights and determine the probable outcome should Alice bring legal action against Ravi.
