Question

While they're sharing a bottle of wine, Carol says, "Pam, you're my best friend in the world. I just inherited a million bucks, and I want you to have some of it. Come with me to the bank tomorrow, and I'll give you $10,000." "Sweet!" Pam replies. Later that day, Carol has a change of heart. She is allowed to do so. Examine the list of the elements of a contract, and give the correct reason.

a) The agreement was not put into writing.
b) The agreement lacks a legal purpose.
c) Pam did not give consideration.
d) Pam does not have the capacity to make a contract.

Answer 1

Carol can change her mind about giving Pam $10,000 because Pam did not provide consideration, which is a requirement for a legally binding contract.

Step-by-step explanation:

The student's question involves understanding the elements of a contract in a given scenario where Carol makes a promise to give Pam $10,000 simply because they are best friends and Carol has inherited some money. Analyzing the elements of a contract, the correct reason Carol is allowed to change her mind about giving Pam the money is because Pam did not give consideration for Carol's promise. Consideration is one of the essential elements of a contract that involves something of value exchanged between the parties. In this case, Pam did not provide anything in exchange for the $10,000, making the promise a gift rather than a contract. Under contract law, a gift promise without consideration is not enforceable.