[Textbook Confusion] Jason Needs a Business Law Book

question 30

Multiple Choice

[Textbook Confusion] Jason needs a business law book. He hears that Gwen has one for sale. Jason asks his girlfriend Sakura to buy it for him from Gwen if Sakura can get it for under $40. Sakura sees Gwen in the hall and asks if she will sell the book for $30, and Gwen agrees. They are between classes, and Sakura does not mention that the book is for Jason, although all the parties were on good terms, and the identity of the buyer should not have affected Sakura's agreement. Later, however, Rima agrees to give Jason her used business law book. Jason tells Sakura that he no longer wants the book. Sakura tells Gwen about the situation with Jason. Gwen replies that she does not care if Jason wants the book or not. Gwen says that she passed up a couple of opportunities to sell the book because she thought she already had it sold and that she wants her money from either Gwen or Jason - she doesn't care who pays.
-Which of the following is true regarding whether Sakura is personally bound on the contract with Gwen?

• A) Sakura is not personally bound because she was acting on behalf of Jason.
• B) Sakura is personally bound unless she can establish that Gwen would not have sold her the book if she had known that Jason was involved.
• C) Sakura is personally bound unless she can establish that Jason has the funds with which to pay Gwen.
• D) Sakura is not personally bound unless Jason is legally insolvent.
• E) Sakura is personally bound.

---

Definitions:

Bilateral Contract

A contract in which both parties make promises.

Consideration

In contract law, the mutual promise to exchange benefits and detriments between parties.

Premiums

The amount paid for insurance coverage or the payment above the nominal value of a security when issued.

Inland Marine Insurance

An insurance contract that covers goods that are moved by land carriers such as rail, truck, and airplane.