69. Seller A entered into an option contract with Buyer B. The contract allowed for a price of $200,000 which Seller A will honor for a 12 month period exclusively for Buyer B. This would be an example of a
Answer: A
This is an example of a unilateral contract in which only Seller A has made a promise to perform.
In this scenario, Seller A has made a promise to honor the price of $200,000 for a 12-month period exclusively for Buyer B, while Buyer B has not made any promise in return. This defines the contract as unilateral.
A) unilateral contract in which only Seller A has made a promise to perform
This option is correct because it accurately describes the nature of the contract. Seller A's obligation to sell at the specified price exists independently of any counter-promise from Buyer B, fulfilling the criteria for a unilateral contract.
B) unilateral contract in which only Buyer B has made a promise to perform
This option is incorrect as it reverses the roles of the parties involved. Buyer B has not made any promise that obligates them to act, meaning the contract cannot be classified as unilateral with respect to Buyer B.
C) bilateral contract which both parties are obliged to perform within the time period
This option is incorrect because a bilateral contract requires mutual promises from both parties. In this case, only Seller A is bound by a promise, and Buyer B has no corresponding obligation.
D) void contract
This option is incorrect as it implies that the contract lacks legal effect. However, the contract is valid and enforceable; it simply does not impose a reciprocal obligation on Buyer B.
Conclusion
The correct answer, A, clearly identifies the contract as unilateral, as only Seller A has made a promise to perform. All other options fail to accurately represent the obligations of the parties involved, highlighting the distinct nature of unilateral versus bilateral contracts. Thus, the understanding of contract types is crucial in this context.