I just need to know if I've answered these wuestions correctly. My answers are on the bottom.
Alice owns property in a rural part of town. A developer approaches her about buying the property for use as a shopping center. The developer wants to be sure that he can get the property rezoned for commercial use before he buys it. Alice offers to sell the property for $150,000. She agrees in writing to keep her offer open for one year beginning May 1. Three months later, however, another buyer offers Alice $175,000 for the same property. Alice agrees to sell to the second buyer.
(a) When the developer learns what Alice has done, he sues her for breach of contract. What result? Explain fully.
(b) How would your answer differ, if at all, had the developer paid Alice $5,000 at the time she agreed to hold the offer open? Why?
(c) Assume, as in (b), that the developer did pay Alice the $5,000. How would your answer differ, if at all, had Alice's promise to hold the offer open been oral instead of written? Why?
(d) How important is it that Alice notify the developer that she is withdrawing her offer before she agrees to seller to the other buyer? Explain fully.
(a) The developer can not sue in this situation. All that is at stake is an offer giving the offeree time to consider whether or not he wishes to make a contract. Unless both the offeror and offeree had agreed to make the sale, there is no concluded agreement; only an offer to sell.
(b) In this situation the developer can sue and will win. By paying Alice the $5,000 dollars they have entered into an option contract, which makes the offer irrevocable.
(c) Even though under the Statutes of Fraud any contracts involving interests in land must be in writing to be enforcable, the developer has paid part of the price so the court may grant specific performance.
(d) The revocation of an offer only becomes effective upon delivery to the other person. If Alice doesn't tell the developer that she is revoking her offer then the developer has grounds to sue her for breach of contract.© BrainMass Inc. brainmass.com March 4, 2021, 6:14 pm ad1c9bdddf
What a classic Contracts situation. In judging whether or not your answers are "correct," remember that, in real life, courts can sometimes differ. But here, your answers to parts a, b, and c look solid to me.
Let's briefly review why your answers to the first three questions are good. In a, you have correctly identified the fact that the option contract isn't actually a contract - it's only an offer. Therefore, until both parties agree to make the sale, there is no ...