Question 82

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

In this scenario, Seller A is the only party that has made a promise to honor the price of $200,000 for Buyer B over the specified 12-month period, characteristic of a unilateral contract.

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

This option is correct because in a unilateral contract, only one party makes a promise that is contingent upon the performance of the other party. Here, Seller A promises to sell at a specific price if Buyer B chooses to exercise the option, fulfilling the definition of a unilateral contract.

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

This option is incorrect because it suggests that Buyer B has made a promise, which is not the case. Buyer B has the option to purchase but does not have an obligation to perform, thereby not constituting a unilateral contract from Buyer B's side.

C) bilateral contract which both parties are obliged to perform within the time period

This option is incorrect as it mischaracterizes the nature of the agreement. In a bilateral contract, both parties have obligations; however, in this scenario, only Seller A has an obligation to perform if Buyer B decides to exercise the option.

D) void contract

This option is incorrect as a void contract implies that the agreement is not legally enforceable. The option contract described is valid and enforceable, as it meets the necessary criteria of a lawful agreement between the parties.

Conclusion

The correct answer is A, as it accurately describes the nature of the contract as a unilateral agreement where only Seller A is obligated to perform. Options B and C fail because they misrepresent the obligations of the parties involved, while option D incorrectly categorizes the contract as void. Thus, option A distinctly captures the essence of the contractual arrangement.