Bar Exam (US) Contracts: Question below is based on the following fact situation. Lyle is the ow...

Question

Question below is based on the following fact situation.

Lyle is the owner of Foggy Bottom, a 30-acre tract of rural farmland. On December 1, Lyle and Yellin each signed the following written instrument: "In consideration of one dollar, receipt of which is acknowledged, Lyle hereby offers to sell Foggy Bottom to Yellin for the purchase price of $30,000. This offer shall remain open until 4:00 p.m. December 30." Thirty thousand dollars was the fair market value of the property.

Yellin failed to pay Lyle the one dollar consideration as recited in their written instrument. On December 15, Lyle sent Yellin a letter in which she stated, "Please be advised that I am hereby withdrawing my offer to sell Foggy Bottom." This letter was received and read by Yellin on December 16. The next day, Yellin tendered a cashier's check to Lyle in the amount of $30,001 (the $30,000 purchase price plus the $1 consideration). Lyle refused to accept Yellin's cashier's check. Yellin has now brought suit against Lyle for specific performance.

Assume for the purposes of this question only that in his pleadings Yellin admits that the recited $1 was not in fact paid to Lyle when their written agreement was executed. As a result, which of the following is Yellin's best argument that such failure of payment does not bar his claim to specific performance?

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

  1. A
    Correct Answer
    The recited consideration was only a sham pretense of bargained-for consideration, and was therefore de minimis and of no legal significance.
  2. B
    Correct Answer
    Yellin's inclusion of the $1 in his tendered check on December 17 was a timely cure of an immaterial breach of a bilateral real estate option contract.
  3. C
    Correct Answer
    Whether the $1 was paid or not, courts will not inquire into the suffi ciency of the consideration.
  4. D
    Correct Answer
    The written instrument embodied a proposal for a fair exchange within a reasonable time period and was therefore an enforceable option contract, regardless of whether the nominal consideration recited was bargained for or paid.
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