Question

Julius asks Rachel if she would like to sell her boat. Rachel privately has no interest in selling her boat, and believes that Julius can’t afford her boat anyway. Rachel says, "I’d sell my boat to you for $20,000." To Rachel’s surprise, Julius responds "Ok, it’s a deal." Rachel does not want to sell the boat to Julius for any price. Julius and Rachel have:________
a. formed a valid contract, because Rachel’s outward expressions showed the formation of a contract.
b. formed a valid contract, because Julius expressed outward interest in the boat.
c. not formed a valid contract, because Rachel did not want to sell the boat for any price.
d. not formed a valid contract because of lack of definiteness in the contract terms.

Answer 1

Answer:

Julius and Rachel have:

a. formed a valid contract, because Rachel’s outward expressions showed the formation of a contract.

Explanation:

A contract is a mutual agreement between two or more parties that is enforceable by law. A contract always creates a legal obligation between the parties that agreed to the contract. A contract can be written or spoken depending on the choice of the parties involved. A valid contract is a contract that is legally binding to the parties involved and thus the parties have a legal obligation to perform the contract duties as agreed. The following are some qualities of a valid contract;

1. There must be an offer, for example; Julius offered Rachel $20,000 for her boat.

2. Acceptance. The person being offered has to accept. In our case; Rachel expressed an acceptance of the offer by saying yes.

3. A promise to perform. since Rachel accepted the offer she expressed the desire to sell her bought to Julius thus a desire to perform.

4. Conditions of the contract. The terms of the contract should be stipulated to ensure that a contract breach is avoided.

The major qualities of a contract in general is that there has to be an offer and acceptance to that offer.