Option Contract Flashcards
Is an option contract revocable due to inadequate consideration?
No. An option contract is irrevocable if money consideration has been received for the option. The adequacy of the money consideration is irrelevant.
Whether detrimental reliance by one party on another party’s offer, without formal acceptance of the offer, is sufficient to make the offer irrevocable.
An offer which the offeror should reasonably expect to induce definite and substantial reliance by the offeree, and which does induce such reliance is binding on the offeror and enforceable even without consideration if enforcement is necessary to prevent injustice to the offeree.
Drennan v. Star Paving Co.
Drennan made a bid for school based on estimate by Star Paving. Star Paving said they made a mistake. Court held that Star Paving was liable for difference in price, since reliance was reasonable, and thus impliedly promised not to revoke.
