Contract Law: Offer, Acceptance, and Withdrawal

Questions and Answers

Why can F not annul the contract on the grounds of E's incapacity?

E is incapable of expressing consent due to being a deaf-mute

Why can G annul the contract with H on the ground of fraud?

H's misrepresentation induced G to enter into the contract

In the context of the text, which situation would NOT constitute a ground for annulling a contract?

Mutual agreement to modify the terms of the contract

Why is E, being a farmer, relevant in the context of selling his carabao to F?

It shows that E is capable of entering into a contract with F Signup and view all the answers

What is the nature of an option contract?

It is a contract where the offeree has the right, but not the obligation, to accept a certain offer within a specified period. Signup and view all the answers

When can an offerer withdraw an offer in an option contract?

Anytime before acceptance by communicating the withdrawal to the offeree. Signup and view all the answers

What distinguishes a gratuitous option contract from an onerous one?

The amount of consideration exchanged between the parties. Signup and view all the answers

Why is withdrawal of a gratuitous offer not considered a breach of contract?

Because there is no valid consideration to support the option. Signup and view all the answers

What is the main reason why G can annul the contract in the given scenario?

Because the contract was based on false statements made by H. Signup and view all the answers

Why can I, as a collector of rare coins, not annul the contract on the ground of mistake?

Because I voluntarily assumed the possibility of error in purchasing the coin. Signup and view all the answers

Why can A and B not claim mistake as a basis for invalidating their contract of sale?

Because they both believed that A was the rightful owner of the land. Signup and view all the answers

In what circumstance can a contract be annulled due to mistake?

When both parties are unaware of any doubts or contingencies affecting the object of the contract. Signup and view all the answers

Study Notes

Contract Annulment

F cannot annul the contract on the grounds of E's incapacity because E's capacity is not relevant to the contract, as E is a farmer selling his carabao (a type of water buffalo) to F.
G can annul the contract with H on the grounds of fraud because fraud is a valid reason for annulling a contract.

Invalid Reasons for Annulment

A situation that would NOT constitute a ground for annulling a contract is a mistake made by a collector of rare coins (I) regarding the contract.

Option Contracts

The nature of an option contract is that it gives the optionee the right to choose whether to enter into a contract or not.
An offerer can withdraw an offer in an option contract before it is accepted.
A gratuitous option contract is distinguished from an onerous one in that the former involves no consideration or payment, whereas the latter does.
Withdrawal of a gratuitous offer is not considered a breach of contract because it is a unilateral offer that can be revoked at any time.

Grounds for Annulment

The main reason why G can annul the contract in the given scenario is the presence of fraud.
A and B cannot claim mistake as a basis for invalidating their contract of sale because they have a valid contract.
A contract can be annulled due to mistake if the mistake is related to the essential qualities of the thing being sold or if the mistake is mutual.