A university is seeking to conduct research on livestock so

as to develop a

new vaccine which will prevent a particular disease in

sheep. A farmer offers

to lease 4 acres of land for a period of 5 years to the

university for the holding

of sheep, who will be livestock on which the new drugs can

be tested. The

farmer agrees to sign a contract prepared by the university

lawyers. The

contract gives exclusive use of the 4 designated acres of

land to the

university, who in turn promise to use the land only for

university purposes

and not for profit making purposes. The university will pay

$1 per year to the

farmer for the right to use the land over the 5 years.

One year into the contract, prices for wool and meat have

risen dramatically.

The farmer would like to end the contract and take the land

back. The farmer

believes there was not really a contract between himself

and the university

since the rent was only $1 per year, which indicates a

simple friendly

arrangement rather than a binding contract.

Can the farmer claim that there is no contract? Explain your

answer.

In answering this question, students are expected to

discuss the elements for

the creation of a contract.