Bar Exam (US) Contracts: Question below is based on the following fact situation. Donner, an avi...

Question

Question below is based on the following fact situation.

Donner, an avid stamp collector for over 20 years, had amassed a large and valuable collection. Many of his stamps were extremely rare and highly coveted. On numerous occasions, Donner had rejected offers to sell his collection. Finally, on May 1, Donner sent Martin, his cousin who was also a fellow stamp collector, the following letter:

"I've decided to part with my stamp collection. Since I want to keep it in the 'family,' I'll sell you my entire collection for $75,000. You have until May 15 to make up your mind."

Donner had dictated this letter to his secretary, who mistakenly typed $75,000 instead of the $78,000 that Donner had actually specified. After typing the letter, the secretary gave it to Donner, who hastily signed it without noticing the mistaken price. Martin received this letter on May 3. Without notifying Martin, Donner went ahead and sold his stamp collection to Bigalow for $80,000 on May 10. The next day, Donner sent a letter to Martin regretfully informing him that he had sold the collection. This letter was received by Martin on May 13. However, on May 12, Martin read a local newspaper article concerning Donner's sale of his unique stamp collection to Bigalow. After reading the article, Martin immediately dispatched an email to Donner accepting his offer to buy the stamp collection. This email was received by Donner that same afternoon (i.e., May 12).

Assume for the purposes of this question only that Martin's email of May 12 was an effective acceptance of Donner's offer. If so, which of the following correctly states the agreement's price term and its legal effect?

AnswerChoose the correct answer.Choose all that apply. Correct Partially correct Incorrect Don't Know

  1. A
    Correct Answer
    The price term is $75,000, and it is enforceable.
  2. B
    Correct Answer
    The price term is $78,000, and it is enforceable.
  3. C
    Correct Answer
    The price term is $75,000, but the court will reform the price to $78,000 in order to correct a mistake in integration.
  4. D
    Correct Answer
    The price term is $75,000, but either party can rescind the contract because there was a mutual mistake as to a basic assumption of fact.
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