Mr. Gale Case

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In order to determine Ms. Gale’s (“Gale”) course of action against Mr. Branch (“Branch”), it is first crucial to decide whether a contract has been formed? Here, the clearest indication that a contract exists is in the written letter signed by Branch to Gale. In his letter, Branch begins by writing that “for valuable consideration” he will give Gale an option of 120 days to purchase his horse Tinman for $500,000. The letter goes on to include that the horse will be warranted until the date of delivery but not in regards to his performance afterwards. In this case, the word “option” indicates Branch’s intent to form an option contract. In order for an option contract to be created, there must be mutual assent and consideration. In the case of Branch, his writing of the letter demonstrates his intent to form a …show more content…
Likewise, Gale’s willingness to have Branch signs a document in combination with her later intention to buy Tinman demonstrates her intent to form a contract. Thus, the mutual assent element is satisfied. Consideration is the final element to be satisfied. It is clear that Branch is giving Gale consideration because he is giving her 120 days to buy his horse. However, Gale’s consideration to Branch is less clear. Branch acknowledges in his letter that Gale has given him “valuable consideration”. However, this consideration seems nominal, without any really value being given to Branch. Although this may be the case, option contracts do not require that the real consideration be given. Rather, options contracts only require that the consideration is sincere. In this case, Branch’s writing for “valuable consideration” appears to be sincere since he intends to give Gale the option of buying

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