California First-Year Law Students' Exam (Baby Bar) — MCContractsEasy
A university offers a scholarship to a prospective student, stating, "We promise to pay your full tuition for four years if you maintain a GPA of 3.0 or higher each semester." The student accepts the offer and enrolls. After two years of maintaining a 3.5 GPA, the university announces it is discontinuing the scholarship program for all current recipients. What type of contract has been formed?
- AA unilateral contract, accepted by the student's performance of the requested act.
- BA bilateral contract, as both parties made promises at the time of agreement.
- CA quasi-contract, as there was no express agreement on all terms.
- DAn illusory contract, as the university retained the right to discontinue the scholarship.
Show answer & explanationAnswer & explanation
Correct answer: A. A unilateral contract, accepted by the student's performance of the requested act.
A unilateral contract is formed when an offer requests performance rather than a promise. The student accepted the university's offer by beginning and continuing the requested performance (maintaining the GPA).
Why the other options are wrong
- B. A bilateral contract requires a promise for a promise; here, the university requested an act.
- C. A quasi-contract is implied by law to prevent unjust enrichment where no actual contract exists.
- D. The university's promise was conditional on performance, not entirely discretionary, so it is not illusory.
Unilateral Contract
A contract where one party makes a promise in exchange for an act from the other party; acceptance occurs upon completion or substantial performance of the act.
- Offeror seeks performance, not a promise.
- Offeree accepts by performing the requested act.
- Offer becomes irrevocable once performance begins.
Memory trick: Promises for Promises, or Promises for Performance?