McElroy owned 104 acres worth about $230,000. Mired in financial difficulties, he approached Grisham, asking to borrow $100,000. Grisham refused, but ultimately the two reached this agreement: McElroy would sell Grisham his property for $80,000, and the contract would include a clause allowing McElroy to repurchase the land within 2 years for $120,000. In most states, this contract would likely be:

A. Void because the rate of interest is usurious.

B. Enforceable because the parties were free to negotiate the terms of the contract.

C. Void for reasons of public policy.

D. Void because the agreement is unconscionable

Question

Business

Jaden Cortez

29 August, 09:32

McElroy owned 104 acres worth about $230,000. Mired in financial difficulties, he approached Grisham, asking to borrow $100,000. Grisham refused, but ultimately the two reached this agreement: McElroy would sell Grisham his property for $80,000, and the contract would include a clause allowing McElroy to repurchase the land within 2 years for $120,000. In most states, this contract would likely be:

A. Void because the rate of interest is usurious.

B. Enforceable because the parties were free to negotiate the terms of the contract.

C. Void for reasons of public policy.

D. Void because the agreement is unconscionable

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Answers (1)

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Alec · Answer 1

Answer: B. Enforceable because the parties were free to negotiate the terms of the contract.

Explanation:

The contract is Enforceable because both parties went into the contract with full mind and body and set and agreed to terms.

The terms were neither unconscionable not were the rates usurious.

The Agreement was not against public policy either.

This means that the agreement is Enforceable in most states in the country.