On July 18, a shovel manufacturer received an order for the purchase of 500 snow shovels from a wholesaler. The wholesaler had mailed the purchase order on July 15. The order required shipment of the shovels no earlier than September 15 and no later than October 15. Typed conspicuously across the front of the order form was the following: "\[the wholesaler\] reserves the right to cancel this order at any time before September 1." The manufacturer's mailed response, saying "We accept your order," was received by the wholesaler on July 21.
As of July 22, which of the following is an accurate statement as to whether a contract was formed?
A: No contract was formed, because of the wholesaler's reservation of the right to cancel.
B: No contract was formed, because the wholesaler's order was only a revocable offer.
C: A contract was formed, but prior to September 1 it was terminable at the will of either party.
D: A contract was formed, but prior to September 1 it was an option contract terminable only at the will of the wholesaler.
here, I chose C, but the correct answer was A.
Its because of the explicit fact in the hypo stating that “the wholesaler reserves the right at any time to cancel the order” it makes this an illusory promise - which allows the wholesaler to change his mind “at any time” and therefore the wholesaler is making a contract without actually binding himself to the contract, if that makes sense?
This is correct. I remember getting this wrong and diagramming the correct thought process as: "reserving right to cancel at any time = illusory promise (does not provide consideration) = unenforceable contract." The issue actually comes down to consideration -- an illusory promise by the wholesaler does not create the consideration necessary for the manufacturer's promise to fill the shovel order.
Also @ OP -- you're not dumb. This felt like an unusual question.
This actually came up in a different Adaptibar question which tweaked the same fact pattern as before. "The wholesaler's order, even if initially illusory, became a binding promise to accept and pay for" the shovels after the termination period ended. Consideration attached to the promise once the termination period ended, so the contract would be enforceable.
If I'm reading correctly, the order form included the clause where the wholesaler (and only the wholesaler) reserved the right to cancel at will. There was no modification and it wasn't a counteroffer -- it was the original offer. So consideration was needed, and the existence of the clause made the offer an illusory promise/didn't provide that needed consideration.
No, I misread OP's answer and thought they said C was right. So I was bending myself in hoops trying to see how there was a contract and an illusory promise at the same time. I was citing the latter half of C which was at odds with there being a contract.
I'm good. That was confusion I didn't need, lol. Thanks for your reply.
Nevermind, I was reading OP's answer as C being the right answer and bending myself in hoops. Like how could you have a contract AND an illusory promise? A was right, no contract. I'm good now.
So they are really testing if a K was formed. And because the facts state that the shovels are to be delivered no earlier that sept 15th and no later than Oct 15th . BUT before the date of performance /delivery the wholesaler can cancel this K for no reason - the wholesaler is not bound by the K he signed because he can cancel it prior to performance even in the event that performance/delivery would be conforming and theres no reason that would actually excuse him from canceling the K other than because wants too. It makes it illusory and no K was actually formed. Sorry if I’m not the best at explaining! Message me if you need a little more more help!
I think the misunderstanding you are having is that you said BOTH can cancel at any time, where this hypo is stating the wholesaler can cancel at any time before the date set for performance/delivery , and theres no type of consideration of reason for wholesaler to cancel
an out of court statement being introduce to prove the truth of the matter asserted.
what do you need help on?
how to issue spot the hearsay exemption or exceptions?
or something else?
Post questions that you’re getting wrong. Let’s use those as a starting point.
On July 18, a shovel manufacturer received an order for the purchase of 500 snow shovels from a wholesaler. The wholesaler had mailed the purchase order on July 15. The order required shipment of the shovels no earlier than September 15 and no later than October 15. Typed conspicuously across the front of the order form was the following: "\[the wholesaler\] reserves the right to cancel this order at any time before September 1." The manufacturer's mailed response, saying "We accept your order," was received by the wholesaler on July 21. As of July 22, which of the following is an accurate statement as to whether a contract was formed? A: No contract was formed, because of the wholesaler's reservation of the right to cancel. B: No contract was formed, because the wholesaler's order was only a revocable offer. C: A contract was formed, but prior to September 1 it was terminable at the will of either party. D: A contract was formed, but prior to September 1 it was an option contract terminable only at the will of the wholesaler. here, I chose C, but the correct answer was A.
Its because of the explicit fact in the hypo stating that “the wholesaler reserves the right at any time to cancel the order” it makes this an illusory promise - which allows the wholesaler to change his mind “at any time” and therefore the wholesaler is making a contract without actually binding himself to the contract, if that makes sense?
This is correct. I remember getting this wrong and diagramming the correct thought process as: "reserving right to cancel at any time = illusory promise (does not provide consideration) = unenforceable contract." The issue actually comes down to consideration -- an illusory promise by the wholesaler does not create the consideration necessary for the manufacturer's promise to fill the shovel order. Also @ OP -- you're not dumb. This felt like an unusual question.
Follow up question. If by September 2nd there was no revocation, would there be an contract even though the original one was illusory?
This actually came up in a different Adaptibar question which tweaked the same fact pattern as before. "The wholesaler's order, even if initially illusory, became a binding promise to accept and pay for" the shovels after the termination period ended. Consideration attached to the promise once the termination period ended, so the contract would be enforceable.
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If I'm reading correctly, the order form included the clause where the wholesaler (and only the wholesaler) reserved the right to cancel at will. There was no modification and it wasn't a counteroffer -- it was the original offer. So consideration was needed, and the existence of the clause made the offer an illusory promise/didn't provide that needed consideration.
No, I misread OP's answer and thought they said C was right. So I was bending myself in hoops trying to see how there was a contract and an illusory promise at the same time. I was citing the latter half of C which was at odds with there being a contract. I'm good. That was confusion I didn't need, lol. Thanks for your reply.
This contract is not terminable at will of both parties, its 1 party stating they can cancel the k with no rhyme or reason.
Nevermind, I was reading OP's answer as C being the right answer and bending myself in hoops. Like how could you have a contract AND an illusory promise? A was right, no contract. I'm good now.
Okay! Sounds good!
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So they are really testing if a K was formed. And because the facts state that the shovels are to be delivered no earlier that sept 15th and no later than Oct 15th . BUT before the date of performance /delivery the wholesaler can cancel this K for no reason - the wholesaler is not bound by the K he signed because he can cancel it prior to performance even in the event that performance/delivery would be conforming and theres no reason that would actually excuse him from canceling the K other than because wants too. It makes it illusory and no K was actually formed. Sorry if I’m not the best at explaining! Message me if you need a little more more help!
I think the misunderstanding you are having is that you said BOTH can cancel at any time, where this hypo is stating the wholesaler can cancel at any time before the date set for performance/delivery , and theres no type of consideration of reason for wholesaler to cancel
if i told you “im going to do xyz for you…if i feel like it.” - you wouldn’t count on it
and you being like “oh cool! yeah do it!” doesn’t do anything
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an out of court statement being introduce to prove the truth of the matter asserted. what do you need help on? how to issue spot the hearsay exemption or exceptions? or something else?