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A is buying a house but needs insurance, goes to Insurance Agent B. B gives A a quote for a $1000 a year premium and up to $200k coverage. A gives B a check for $1000 dollars and B says there is a clause in the contract that states" This agreement shall become a contract only when the company approves the application at its headquarters and returns a complete policy form to the applicant."

Later on, A receives the approval application which states he is covered for up to $150k.

To be honest, I don't know if there is a valid contract, and if so which terms are valid. Unfortunately, there is no answer to go along with the exam.

#NotACop wrote:A is buying a house but needs insurance, goes to Insurance Agent B. B gives A a quote for a $1000 a year premium and up to $200k coverage. A gives B a check for $1000 dollars and B says there is a clause in the contract that states" This agreement shall become a contract only when the company approves the application at its headquarters and returns a complete policy form to the applicant."

Later on, A receives the approval application which states he is covered for up to $150k.

To be honest, I don't know if there is a valid contract, and if so which terms are valid. Unfortunately, there is no answer to go along with the exam.

This is a contract. Its conditional, and seems weird, but it a contract for sure. there is valid consideration and the terms were adjusted, which again seems weird, but is expressly allowed under UCC 2-207

so long as A received the condition (the "complete policy form") its a contract. otherwise due to mutuality of obligation it wouldn't be. from your hypo's minimal details tho, it seems to be that there was.