Question 69

This is an example of a unilateral contract in which only Seller A has made a promise to perform.

In this situation, Seller A has committed to honor a price exclusively for Buyer B, which characterizes a unilateral contract. Only Seller A is obligated to fulfill the terms of the contract, while Buyer B does not have to take any action to enforce the agreement.

A) unilateral contract in which only Seller A has made a promise to perform

This option is correct because the essence of a unilateral contract is that one party makes a promise in exchange for an act by the other party. In this case, Seller A promises to sell at a specific price, and Buyer B has the option to accept this offer but is not required to do so.

B) unilateral contract in which only Buyer B has made a promise to perform

This option is incorrect because it misrepresents the nature of the promises made in the contract. In the scenario, it is Seller A who has made the promise to perform, while Buyer B is not bound to make any promises or perform any actions.

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 has made a promise, while Buyer B has the option to accept or decline the offer, making it not a bilateral contract.

D) void contract

This option is incorrect as it suggests that the contract has no legal effect. The option contract between Seller A and Buyer B is valid and enforceable, provided it meets the necessary elements of a contract, which it does.

Conclusion

The correct answer is A, as it accurately describes the nature of the agreement between Seller A and Buyer B. All other options fail because they either mischaracterize the obligations of the parties or incorrectly state the validity of the contract. This reinforces the fundamental concept of unilateral contracts, where only one party is bound to perform.