Option Contracts

Question 1

Baird v. Gimbel

Answer 1

Promissory estoppel is not applicable as plaintiff never accepted the offer/ There was no acceptance

Question 1

How can you create an option contract

Answer 1

Separate nominal consideration
Unilateral contract followed by part performance
Merchant firm offer
Promissory estoppel can substitute for consideration if offeree relies on offer

Question 2

Drennan v. Star Paving

Answer 2

Mistake discovered after point where could no longer rescind/revise - reliance of contractor when making a bid based on subcontractors estimate

Question 3

Restatement § 87(2). Option Contract

Answer 3

An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.