Question

A orally offers to sell B 100 premium-grade fountain pens but neglects to state the price. Such pens typically sell for $1 each. Borally accepts. Immediately thereafter, A tries to back out of the deal. At this point in time, which of the following is most likely to be true?

A) There is no offer and no contract because the offer is indefinite.
B) There is no offer and no contract because the offer must be in writing.
C) There is a contract, if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
D) There is a contract, because the offer contained all material terms

Answer 1

Despite the initial omission of the price, the context of premium-grade fountain pens at $1 each provides a reasonably certain basis for the contract. In contract law, the crucial factors are the parties' intent and a clear basis for an appropriate remedy. So, the correct option is C) There is a contract if the parties intended to make a contract, and there is a reasonably certain basis for giving an appropriate remedy.

Step-by-step explanation:

In this scenario, option C is the most likely to be true. While A orally offered to sell B 100 premium-grade fountain pens without stating the price explicitly, the offer is not necessarily indefinite. The crucial aspect in contract law is whether the parties intended to form a contract and if there is a reasonably certain basis for providing an appropriate remedy.

The omission of the price initially might raise concerns, but the context of the transaction, where premium-grade fountain pens typically sell for $1 each, offers a clear reference point. This context provides a reasonably certain basis for determining the price and, consequently, the terms of the contract. The law recognizes that contracts may still be valid even if all terms are not expressly stated, as long as there is enough information for the parties and the court to understand the agreement.

In essence, the lack of an explicit price at the outset does not necessarily invalidate the offer, especially when the surrounding circumstances allow for a reasonable inference regarding the missing term. As long as both parties intended to enter into a contract and there is a discernible basis for an appropriate remedy, a contract is likely to be upheld in this situation.

Answer 2

For a contract to be formed, there must be a meeting of the minds between the parties, and the terms of the offer must be specific enough to enable a determination of the parties' rights and obligations. Therefore, the correct answer is option A) There is no offer and no contract because the offer is indefinite.

Step-by-step explanation:

In this scenario, option A) "There is no offer and no contract because the offer is indefinite" is the most likely to be true. For a valid contract to exist, essential elements such as offer, acceptance, consideration, and definite terms must be present. In this case, the offer made by A to sell 100 premium-grade fountain pens lacks a crucial element: a definite price. The absence of a specified price renders the offer indefinite and prevents the formation of a valid contract.

The principle of definiteness in contract law requires that the terms of an offer be clear and specific enough for the parties to understand their rights and obligations. Without a specified price for the fountain pens, there is no clear basis for mutual assent or an intention to create legal relations. Therefore, there is no offer capable of forming a contract in the absence of a fundamental term like the price of the pens.

While parties have the freedom to negotiate and determine terms, including price, the initial offer must provide a reasonably certain basis for the terms. In this case, the failure to specify the price makes the offer indefinite, and without a valid offer, there can be no contract between A and B.