Unit 5 Assignment
Points Possible: 40
Due Date: Friday, July 1
Part 1 - Stop Smoking Contract
Tara's mother, Diane, is upset that Tara is smoking cigarettes. Tara is only 20 years old and has
been smoking for about 3 years. Diane, her mother, tells Tara that if she (Tara) will quit smoking
for one full year, then she (Diane) will pay her $5,000. Diane is very serious about this and Tara
After thinking about the proposed deal for a few days, Tara tells her mother she will do it. Diane
says that promising to do it is not enough -- the only way Tara will get the $5,000 is to actually
quit smoking for one full year. Tara wants to know if she can start smoking again after the year
of not smoking, and her mother says "if you are foolish enough to start back up, that's your
business. The deal is for you to quit for one full year."
Tara tells her mother she will stop smoking on Sunday, October 17. Diane says she hopes Tara
can refrain from smoking for the full year.
1. Is the arrangement between Tara and her mother, Diane, a contract? Explain.
Yes, it is a oral contract. It belongs to the definition that two party formalized an
agreement in relation to a particular subject. Two parties are Tara and her mother, and
the particular subject is quitting smoking for a certain time period—one year. And the
results is $5,000. So, I think it is a contract.
2. If not answered in #1 above, walk through the four basic elements of a contract (shown on
Pages 220-221 of your text) and explain if each of these elements are present or exist with
respect to the deal made by Tara and her mother.
1 "Meeting of the Minds" (Mutual Consent): Both Tara and her mother have a mutual
understanding of what the contract covers.
2 Offer and Acceptance: The contract between Tara and her mother involves an offer
($5,000) to another, Tara, who accepts the offer. Also, Her mother accepts the offer
that Tara quits smoking for one full year.
3 Mutual Consideration (The mutual exchange of something of
): Tara and her
mother exchanged a bet or experience and the value for this bet is $5,000.
or Delivery: Before Tara finished the bet that is, finished the quit
smoking for one full year, the contract is still not a contract. But if she completed the
action, say, quit smoking for one full year, it is a contract.
3. If the agreement reached between Tara and her mother a bilateral contract or a unilateral
It is a bilateral contract. Because the agreement was accepted by both sides of the
agreement, so it is a bilateral contrac.
4. Let's say that Tara has quit smoking for about 6 months. Her mother, Diane, says she is so
proud of Tara for having quit for so long that "you have proven to me you can do it! Good for
you!" And then Diane proceeds to tell Tara that she has changed her mind about agreeing to pay
her (Tara) $5,000 if she quit smoking for a full year. Diane says "by quitting that is worth more to
you than $5,000." Tara is upset. If Tara does not have a cigarette for a full year, does she have a