CONTRACTS I

Sarah mails to Bob a signed letter reading, "I offer to sell my chrome-plating plant to you for $1,000,000."

Bob mails this signed writing in reply:"I doubt that I can raise $1,000,000. Would you accept $900,000 together with my promise to not tell Greenpeace that your facility stores chromium in violation of federal law?"

Sarah phones Bob, saying, "I accept your offer to pay me $900,000 and to keep my chemical storage practices private.Just for the record, though, my facility obeys all EPA regulations.I just don't want any environmentalists pestering me."Sarah does not mention that her facility stores chromium in violation of OSHA regulations.

Bob gives Sarah $900,000 and receives title to the chrome plating facility.He quickly discovers the OSHA violation, which will cost $20,000 to remedy. He complains to the local chapter of the Sierra Club and demands of Sarah that she refund his $900,000.

Analyze the rights and remedies of the parties under contract law.