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In Order to Get Around Gift Tax Laws, Your Rich

Question 5

Multiple Choice

In order to get around gift tax laws, your rich Uncle Michael agrees to sell you his house in exchange for a peppercorn. You readily agree, but Uncle Michael changes his mind and transfers ownership of the house to a trust he created for his favorite chimpanzee, Bubbles. You are mad that Bubbles has a nicer house than you do so you sue to enforce the agreement. What is the likely result?


A) There is a contract because courts will not delve into the adequacy of the exchange.
B) Courts will invalidate the contract because it appears to be a sham.
C) You get the house because a chimpanzee does not have the capacity to contract.
D) There is a contract but it is void because Uncle Michael revoked the offer before your acceptance.

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