Eric Bought a House for $150 000

Multiple Choice

Eric bought a house for $150 000. He paid $25 000 immediately and promised the seller that he would pay the remainder in monthly instalments over the next ten years. Eric then told his daughter, Naomi, that he would give the house to her if and when she paid all of the monthly payments. Naomi was reluctant to commit herself to that arrangement because she was not sure if she would always have enough money to make the payments. Eric said to her, "Well, let's see how it goes." Naomi made the monthly payments for six years. Unfortunately, she and her father then began to fight. At that point, he told her that the deal was off. Eric has offered to repay Naomi for all of the payments that she had made, but he insists that the house will always belong to him. The market value of the house has recently and unexpectedly increased from $150 000 to $400 000. Which of the following statements is most likely TRUE?

A) Eric and Naomi never had a contract because they never had an intention to create legal relations.
B) Since the parties created a unilateral contract, Naomi still has an obligation to make the monthly payments.
C) Eric and Naomi never had a contract because he revoked his offer before she completed making the payments.
D) Eric is required to give Naomi an opportunity to finish completing the payments, and if she does so, she is entitled to the house.
E) A court would not recognize a contract because no reasonable person would ever offer to sell a $400 000 house for less than half that amount.