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(a) Swan Valley Citrus Pty Ltd (SVC) was negotiating the sale of oranges to a wholesaler called Fresh Fruits Pty Ltd (FF). SVC sent a letter on 1 March 2018 to the buyer FF setting out the quantity of fruits available for sale and the price of orange per metric ton. They asked the buyer FF to reply within 14 days.

The buyer FF sent back a letter dated 6 March 2018 inquiring about the quality of the oranges for sale and the packaging details. The SVC did not reply to the letter.

On 14 March 2018 at the opening of business the buyer FF sent a fax ‘I accept your offer of 1 March 2018 for the sale of orange' to the SVC. The same day the SVC replied by fax saying, ‘You are too late. I'm just in the process of selling the oranges to another purchaser. Formalities will be completed by tomorrow'. FF believes that a valid contract has been formed between FF and SVC. Based on the given scenario, discuss the rights and liabilities of both FF and SVC.

(b) Presume in (a) above the buyer sent the fax on 14 March but because of a transmission error the SVC did not receive it. Discuss the outcome under these circumstances.

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