A signs a contract to buy B's ranch for $900,000 then learns that the true market value is $500,000. There is not adequate consideration, so the contract will not be enforced.

Question

Quizplus · Accepted Answer

The fact that A overpaid for the ranch does not necessarily make the contract void. As long as there was a meeting of the minds and both parties entered into the contract voluntarily and with full knowledge of the terms, the contract will be enforced. Adequate consideration is not based on market value, but rather on whether each party exchanged something of value (e.g. money for the ranch). Unless there was fraud, duress, or mistake, A will be held to the terms of the contract.

A Signs a Contract to Buy B's Ranch for $900,000