The Johnsons decided to sell their summer cabin on Beech Lake. They sent flyers (advertisements) out to all who previously had expressed an interest in buying the cabin stating that they were planning on selling their cabin. The flyer described the location of the property, the size of the lot, and the price. If one of the recipients responds by sending a letter accepting, an agreement:

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BlackTom AI · Accepted Answer

In contract law, an advertisement or flyer generally serves as an invitation to negotiate or make an offer, rather than a binding offer that forms a contract upon acceptance. Here, the Johnsons sent flyers describing the property and asking recipients to respond if interested, which fits the classic pattern of inviting offers rather than making a one-sided offer themselves.
Option 1: 'will not be formed because the flyer was sent out as an invitation to make an offer.' This aligns with the principle that advertisements are typically invitations, not offers, especially when they are directed to a broad audience and require further assent to create a contract.
Option 2: 'will be formed because the first to respond gets the property.' This would imply a
 unilateral or first-come, first-served structure, which is not stated in the flyer. Absent language indicating a grant or option upon first response, this is not a valid basis for contract formation.
Option 3: 'will be formed because the price is included.' Including a price in an advertisement does not automatically convert it into an enforceable offer; the terms may still be inviting negotiations unless the language clearly constitutes an offer with definite terms and a method for acceptance.
Option 4: 'will not be formed because of the parol evidence rule.' The parol evidence rule governs the admissibility of prior or contemporaneous external agreements to interpret a written contract, not whether an advertisement itself constitutes an offer. It does not negate contract formation from an accepted agreement formed from a properly negotiated exchange.
Thus, examining the core concept—that the flyer signals an invitation to make an offer rather than an actual offer—the most accurate conclusion follows from Option 1, while the other options misinterpret how invitations interact with offers or misapply doctrinal rules.

LEGAL & REGULATORY ENVIRONMENT FIN 2050-04 (90533) FINAL EXAM

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Similar Questions

A key element of a valid offer is the intent : The offeror must genuinely intend to be legally bound if the offer is accepted.

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