A car salesman proclaims, 'Free set of wheels to the next person who buys a car from me!' A shopper believes it's a two-for-one deal and buys a car for his son. The salesman then says he's never offering a free car, and cancels the sale of the first car as a consolation. Is there a binding contract for a free car?

• A. A binding offer to provide a free car.
• B. A general advertisement that is not an offer.
• C. A binding contract only if the buyer performed.
• D. A contract by necessity.

Answer: (D)

This scenario tests how a unilateral promise is treated in contract law. A promise like “free set of wheels to the next person who buys a car” is an offer that is satisfied by performing the requested act. The act here is buying a car. The shopper did buy a car—his purchase for his son constitutes the performance that accepts the offer. Once performance has begun or is completed under a unilateral contract, the offer generally cannot be revoked, so a binding obligation to provide the free car arises.

In other words, the ad functions as an offer to enter into a contract upon the buyer’s completion of the specified act. The buyer’s purchase constitutes acceptance, forming a contract to give the free car. The seller’s later statement that there is no such offer would be a breach of that contract.