17. 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, the contract created by Seller A is unilateral because only one party, Seller A, has made a promise to honor the price for Buyer B. Buyer B does not have any obligation to purchase the property within the 12-month period, making it a unilateral contract.
A) unilateral contract in which only Seller A has made a promise to perform.
This option is correct because a unilateral contract involves a promise made by one party in exchange for an act by another party. In this case, Seller A promises to sell the property for $200,000 if Buyer B decides to purchase it, while Buyer B is not obligated to take any action.
B) unilateral contract in which only Buyer B has made a promise to perform.
This option is incorrect because it mischaracterizes the nature of the contract. In this scenario, Buyer B does not make any promise; instead, they have the option to purchase, which does not constitute a promise to perform. Therefore, Buyer B's role does not fit the definition of a unilateral contract focused on their promise.
C) bilateral contract which both parties are obliged to perform within the time period.
This option is incorrect as it describes a bilateral contract, where both parties make mutual promises to perform. In this case, Seller A has made a promise but Buyer B has no obligation to act, which does not fulfill the conditions for a bilateral contract.
D) void contract.
This option is incorrect because a void contract implies that the contract is not legally enforceable from the outset. However, the option contract between Seller A and Buyer B is valid and enforceable, as it establishes a legal agreement with specific terms.
Conclusion
The correct answer is A, as it accurately reflects the nature of the contract established between Seller A and Buyer B. All other options fail to capture the contractual dynamics, either misrepresenting the obligations of the parties or incorrectly categorizing the type of contract involved. Thus, it is essential to understand the definitions of unilateral and bilateral contracts to accurately analyze this scenario.