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45. In an action for breach of contract brought by the niece against her aunt, is the niece likely to prevail?
A niece had worked in her aunt's bookstore for many years. The bookstore business, which was housed in a building that the aunt leased, was independently appraised at $200,000. The aunt decided to retire. She wrote to the niece, expressing her affection for the niece and offering to sell her the bookstore business for $125,000 if the landlord would agree to a transfer of the lease. The letter also specified when the aunt would transfer the business. The niece wrote back accepting her aunt's offer. In a phone call to the niece, the aunt stated that the landlord had approved the transfer of the lease and that she would now ask her attorney to draft a written contract so that there would be a record of the terms. Before the attorney had finished drafting the document, the aunt changed her mind about selling the business and informed the niece of her decision.
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A is incorrect. The niece's promise to pay $125,000 and the aunt's promise to sell the business constituted the requisite consideration to enforce the agreement. The fact that the aunt's promise to sell her business may have been induced, in part, by affection for her niece would not negate the existence of a bargained-for exchange between the niece and the aunt.
B is incorrect. If a bargained-for exchange is present, there is no additional requirement, such as an equivalency of exchange, in order to satisfy the consideration requirement of an enforceable contract. The niece's promise to pay $125,000 and the aunt's promise to sell her business constituted consideration. In addition, the niece's promise to pay $125,000 for a business appraised at $200,000 does not constitute the gross inadequacy of exchange that so shocks the conscience as to warrant invalidating the agreement.
C is incorrect. Conditions are often beyond the control of either party. The dispositive issue is whether the existence of an enforceable contract was conditioned on the attorney drafting a written agreement that reflected the niece's and aunt's understandings. Manifestations of assent are sufficient to conclude an enforceable contract even though parties manifest intent to memorialize their agreement in a writing that is not subsequently prepared.