On July 1, Silk, Inc., sent Blue a telegram offering to sell Blue a building for $80,000. In the telegram, Silk stated that it would give Blue 30 days to accept the offer. On July 15, Blue sent Silk a telegram that included the following statement: “The price for your building seems too high. Would you consider taking $75,000?†This telegram was received by Silk on July 16. On July 19, Tint made an offer to Silk to purchase the building for $82,000. Upon learning of Tint’s offer, Blue, on July 27, sent Silk a signed letter agreeing to purchase the building for $80,000. This letter was received by Silk on July 29. However, Silk now refuses to sell Blue the building. If Blue commences an action against Silk for breach of contract, Blue will:
A.
win, because Blue effectively accepted Silk’s offer of July 1.
B.
win, because Silk was obligated to keep the offer open for the 30-day period.
Incorrect C.
lose, because Blue sent the July 15 telegram.
D.
lose, because Blue used an unauthorized means of communication.
You answered C. The correct answer is A.
Blue will win the breach of contract, because Blue effectively accepted Silk’s offer of July 1. For a contract to be valid, it must contain an agreement (mutual understanding), consideration, and legal purpose, and have competent parties. The contract between Silk and Blue is considered an option contract. This contract keeps an offer open until the agreed-upon time period. In this case, the agreed-upon time period is 30 days from July 1. Silk received the offer from Blue to buy the building at $80,000 on July 29. Therefore, the option contract started on July 1, and running through July 30 gives Blue the advantage.
My concern is that — how do we know that this is an option contract ,An option is a contract that is supported by the consideration to keep offer open for the stated period of time.
I don't see anything mention in the question regarding the consideration to keep the contract open.
.