After the company experiences a surge in profits, a vice president of The Rosemud Co. sends a memo to all regional managers stating, "For your exceptional leadership, we will pay a $10,000 bonus to every regional manager who voluntarily completes our advanced management training seminar within the next 60 days." Regional manager Penelope reads the memo, registers for and completes the voluntary training, which costs her several weekends of personal time. When Penelope requests the bonus, the company refuses to pay. If Penelope sues for breach of contract, a court would likely find that:

Question

BlackTom AI · Accepted Answer

The scenario involves a company communications about paying a bonus to regional managers who voluntarily complete an advanced management training seminar within 60 days. We will evaluate each answer choice to understand why it is right or wrong.

Option A: 'A contract was formed because Penelope completed the requested performance, and her effort constitutes valid consideration.'
This option rests on the idea of a unilateral contract: the offer is a promise of a reward (the $10,000 bonus) in exchange for Penelope performing a specific act (completing the training). In unilateral contracts, acceptance occurs when the performance is completed, not merely when the offer is accepted in a traditional sense. Once Penelope finishes the training, she has satisfied the condition and the contract to pay the $10,000 arises. The performance itself serves as consideration, so there is a valid exchange. This aligns with contract principles that a promise contingent on performance can create a binding contract when the performance occurs.

Option B: 'No contract was formed because the vice president's memo was not a formal, legally binding offer.'
The formality or ceremonial status of the offer does not determine enforceability in this context. A unilateral contract can exist even if the offer is communicated informally, verbally, or via memo, as long as the essential terms are clear and the offeree performs in accordance with the offer. The absence of 'formal' labeling does not automatically void the offer.

Option C: 'No contract was formed because Penelope was an at-will employee and the company had the right to revoke the promise at any time.'
The at-will status of an employee affects employment relationships, not necessarily the enforceability of a unilateral contract. Once Penelope completes the performance in response to the offer, most jurisdictions would view the offer as having been accepted and the contract formed. An attempt to revoke after performance would typically be ineffective under unilateral contract principles, because performance has already occurred.

Option D: 'The promise was unenforceable because Penelope did not provide any monetary consideration.'
In the context of unilateral contracts, the consideration is the performance itself, not a separate monetary payment promised in exchange for performance. The act of completing the training constitutes the consideration necessary to bind the promise to pay the bonus. Therefore, lacking additional monetary consideration does not render the promise unenforceable.

In summary, evaluating the mechanics of unilateral contracts and the role of performance as consideration, Option A correctly captures how a contract can be formed when Penelope completes the requested performance, while the other options rest on misunderstandings about offer formality, at-will employment implications, or the nature of consideration in unilateral contracts.

BUSFIN 3500 AU2025 (2111) Final Exam Au_1_25- Requires Respondus LockDown Browser

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