First Principles of Business Law

3.4. The importance of a 'bargain'

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

A, a builder, says to B: "If you pay me $35,000 I will build the warehouse you want on your industrial site."

B, a retailer, replies to A: "I'll happily pay you $35,000 to build the warehouse."

Would the courts be willing to enforce this agreement even though it is not in the form of a deed?

(a) Yes, because in this case each party is getting something from the 'bargain'.

(b) No, because in this case there is no 'bargain' sufficient to make the informal agreement legally enforceable.