Question

Ned contracts to sell his boat to Larry. Larry builds a dock behind his house in which to keep his boat. Ned's subsequent attempt to cancel the contract will ?

1) not be effective because Larry has detrimentally relied on Ned's offer
2) not be effective because Larry may not be able to obtain a similar boat for a similar price elsewhere
3) be effective because Ned did nothing to encourage Larry to build a dock
4) be effective because Ned wants to sell the boat to someone else

Answer 1

Ned's attempt to cancel the contract will not be effective because Larry has detrimentally relied on Ned's offer.

Step-by-step explanation:

In the given scenario, Ned contracts to sell his boat to Larry and Larry builds a dock behind his house to keep his boat. Ned's subsequent attempt to cancel the contract will not be effective because Larry has detrimentally relied on Ned's offer. Detrimental reliance occurs when one party relies on the promise of another party to their detriment. In this case, Larry has built a dock in reliance on Ned's promise to sell the boat.