Section Four

10 points

Directions:Using your knowledge of contract formation and defenses, please review the following scenarios and state whether there is a valid contract, that is an offer, acceptance and consideration, and, if so, is it enforceable.

7.A gambler lives in a state where gambling was illegal. Nevertheless, he gambled on a regular basis. He asked his friend to lend him $5,000 to bet on a football game. His friend agreed to lend him $5,000 if the gambler would bet half of it on the friend's behalf. The gambler agreed, took his friend's $5,000, and placed the bet. The gambler won on 4-to-1 odds. He gave his friend his $5,000 back but refused to tender any winnings.

a.If his friend sues the gambler to recover the winnings due under the contract, who will prevail?

8.On November 3, an investor who had watched his stocks sink to unprecedented low levels sent a fax message to a dealer in precious metals: "Please quote your best price on 800 troy ounces platinum bars for immediate delivery at my bank." At 10 a.m. the next morning (November 4) the dealer replied by fax, "My best price is $475 per ounce." The investor received the dealer's message later on that same day.

a.Is there a contract if funds are sent by the end of the day on November 4th?