Fact Pattern 7-1
Prudence offered to sell her car to Danny for $3,000. Danny was not sure what to do, so he asked Prudence if she would hold the offer open for him for one week for $50. Prudence said sure, and the parties signed a contract to the effect that Prudence would hold the car. A few hours later, Bobby unexpectedly offered Prudence $3,500 for the car, and Prudence sold it to him on the spot. Danny decided to buy the car, but when he came by to pick it up the next day, it was gone. Prudence gave Danny his $50 back telling him that was her only obligation and that if he had any complaints, he could take it up with Bobby. Danny found a similar car the next week for $3,500 and purchased it.
-Refer to Fact Pattern 7-1.Did Danny have any type of contract with Prudence,and if so what type?
A) Danny did not have any type of contract with Prudence.
B) Danny had an option contract with Prudence.
C) Danny had a hold contract with Prudence.
D) Danny had a conditional contract with Prudence.

Question

Quizplus · Accepted Answer

Danny had an option contract with Prudence. Prudence agreed to hold the offer open for one week for $50, which constitutes an option contract. An option contract is an agreement in which the offeror promises to hold an offer open for a specified period of the time and the offeree pays consideration for that promise. In this case, Danny paid Prudence $50 to hold the offer open for one week. Therefore, Prudence was obligated to hold the car for Danny for one week, and if Danny decided to buy the car within that period, Prudence would have been obligated to sell it to him for $3,000. However, Prudence breached this contract when she sold the car to Bobby before the expiration of the one-week period. Therefore, Danny has a legal claim against Prudence for breach of contract. However, since Danny found a similar car the next week for $3,500 and purchased it, he may not be able to recover damages from Prudence.

Fact Pattern 7-1 Prudence Offered to Sell Her Car to Danny for $3,000