First Principles of Business Law
Quiz: The contents of a contract

Question 11

 

 

A and B enter negotiations for the purchase by A of a fishing boat being sold by B.  After much discussion, A offers to purchase B’s boat for a price of $10,000 and B accepts this offer. Nothing is put into writing.  Later, B says that the agreed price was $12,000 and refuses to accept $10,000 in exchange for the boat.  In these circumstances, which one of the following statements is correct? 

 

(a)  When a contract is entered into entirely orally, and only the contracting parties were present when the contract was made, the parties themselves can provide evidence as to the agreed terms.

(b)  When a contract is entered into entirely orally, the agreed terms cannot be proved unless witnesses, other than the parties themselves, can provide independent evidence of what was agreed.

(c)   Although an oral contract is legally valid, it can only be enforced in the courts to the extent that the terms of that contract were put into writing.  This is because the parol evidence rule forbids proof of orally agreed terms.

 

 

 

 

 

 

 

 

 

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