First Principles of Business Law
Making a contract
4. The third essential element of formation: Sufficient agreement

4.4. Conditional agreement

 

 

 

Read the facts and the question and then choose the best answer.

A says to B: "I will buy your house for $200,000, provided that I can get a loan from my bank at the normal market rate."

B replies to A: "I agree to sell my house to you for $200,000. I hope you get a loan without any trouble."

Have A and B reached sufficient agreement for there to be a contract?

 

(a) Yes, they have reached sufficient agreement to create a contract, even though it is still conditional.

(b) No, the agreement reached is not sufficient to create a contract while it remains subject to a condition.

 

 

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4. The third essential element of formation: Sufficient agreement