ContractsOption_contracts_and_right_of_first_refusalHARD
An owner promises to sell a parcel to a developer for $350,000, and the developer promises to pay that sum. They sign a written purchase agreement. A month later the developer locates a partner willing to fund the closing, but the owner now refuses to convey. The developer sues for enforcement. The owner argues no enforceable agreement ever existed because, in his view, nothing was actually exchanged. The court, looking at the document, identifies the mutual exchange of promises — the owner's promise to convey and the developer's promise to pay — as the element that supports enforceability of the contract. Which contract-formation element does the court reference?
Correct Answer
B) Consideration
The owner promised to convey the parcel and the developer promised to pay the purchase price. That mutual exchange of promises — each side giving up something of value — is the contract-formation element of consideration, which transforms a bare promise into an enforceable contract.
Answer Options
A
OfferB
ConsiderationC
AcceptanceD
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Related Topics & Key Terms
Key Terms:
mutual promisesexchange of valueowner promisedeveloper promisesupports enforceability
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