Question

Shovels R Us sends a purchase order to Acme Snow Shovel Inc., for 500 shovels to be delivered by September 30, 2017, in time for the winter season. There is no price listed on the purchase order. Acme returns an acknowledgment form indicating that the shovels will be delivered by September 30, 2017, again not mentioning price or any other terms and conditions. The purchse order and acknowledgment letter together form a valid contract.

Answer 1

Answer:

False. There is no legal contract without value consideration.

Explanation:

The following elements must be present to declare a contract legally binding and valid.

An offer for a good or service that is being exchanged, An acceptance of this offer, A consideration which is usually the value of the goods and services that are being exchanged.

While this transaction fulfills the offer and acceptance elements, the consideration or value specification is unfulfilled and as such there is no legally binding valid contract as the prices have not been specified before agreeing to transact.

There might not be any need be for specifying prices if there is a trade, which is both parties exchange goods but in this case there is just one party delivering goods.

Hope this helps.