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An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1).
The example of a "unilateral contract" taught to all first year law students is an offer by A to pay B £100 if B walks from London to York. [2] B is not obliged to walk to York, but if B sets out on the journey, A's offer becomes contractually binding.
Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. [32] For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's promise to deliver title to the property.
In a unilateral contract, acceptance may not have to be communicated and can be accepted through conduct by performing the act. [11] Nonetheless, the person performing the act must do it in reliance on the offer. [12] A unilateral contract differs from a bilateral contract, where there is an exchange of promises between two parties. For example ...
For example, in the case of Tweddle v Atkinson, [19] John Tweddle promised William Guy that he would pay a sum of money to the child of William Guy, and likewise William Guy promised John Tweddle that he would pay a sum of money to the child of John Tweddle, upon the marriage of the two children to each other. However, William Guy failed to pay ...
An example of a nudum pactum would be an offer to sell something without a corresponding offer of value in exchange. While the offer may bind a person morally, since the offer has not been created with any consideration, it is gratuitous and treated as a unilateral contract. The offer is therefore revocable at any time by the offeror before ...
And, since 1893, law students have been introduced to the mysteries of the unilateral contract through the vehicle of Carlill v Carbolic Smoke Ball Co. and taught to repeat, as a sort of magical incantation of contract law, that in the case of unilateral contracts performance of the act specified in the offer constitutes acceptance, and need ...
The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law. The law governing transactions involving the sale of goods has become highly standardized nationwide through widespread adoption of the Uniform Commercial Code .