Contracts MBE PQs +3NY PT2
What profits can a lost volume seller recover?
a lost volume seller is not entitled to recover the contract price, but is rather limited to the profit of the lost sale.
A condition is only a condition subsequent if it
discharges a duty that is already absolute
TorF- A buyer who does not obtain good title can nevertheless transfer good title to a subsequent purchaser who buys the goods in good faith and for value.
true
On November 1, a plumber and a professional basketball player contracted for the sale by the plumber to the professional basketball player of the collection of antique basketballs that the plumber had inherited from his grandfather. The professional basketball player agreed to pay the purchase price of $22,000 when the plumber delivered the antique basketballs on February 19. On February 1, the professional basketball player received a signed letter from the plumber that stated
"I have decided to dispose of the cases for the antique basketballs that you have already purchased. If you want the cases, I will deliver them to you along with the basketballs on February 19 at no additional cost to you. Let me know before February 15 whether you want them. I will not sell them to anyone else before then." On February 14, the professional basketball player e-mailed and the plumber received the following message: "I accept your offer of the cases." The plumber was not a merchant with respect to either antique basketballs or cases. The plumber is contractually obligated to deliver the cases because A. The professional basketball player provided a new bargained-for exchange by agreeing to take the cases. B. The plumber's letter (received by the professional basketball player on February 1) and the professional basketball player's e-mail message of February 14 constituted an effective modification of the original sale-of-basketballs contract. C. The professional basketball player's e-mail message of February 14 operated to rescind unilaterally the original sale-of-basketballs contract. D. The plumber's letter (received by the professional basketball player on February 1) waived the bargained-for consideration that would otherwise be required. : Answer choice B is correct. At common law, modification of an existing contract must be supported by consideration, but under the U.C.C., only good faith is required to modify a contract for the sale of goods. Here, there was good faith by both sides, so the modification was effective without consideration. Answer choice A is incorrect, as the professional basketball player did not provide a new bargained-for exchange by agreeing to take the cases. There was no legal detriment to the professional basketball player, but the U.C.C. only requires good faith, not consideration, to modify a contract for the sale of goods. Answer choice C is incorrect, as the e-mail message did not unilaterally rescind the original contract. Answer choice D is incorrect, as bargained-for consideration is not required under the U.C.C. to modify a contract for the sale of goods.
Express conditions generally contain language such as
"on condition that" or "provided that." If a condition is not express, then substantial performance may suffice, as in "the seller to complete by July 1."
A corporation, through its president, requested from a finance company a short-term loan of $100,000. On April 1, the president and the finance company's loan officer agreed orally that the finance company would make the loan on the following terms
(1) The loan would be repaid in full on or before the following July 1 and would carry interest at an annual rate of 15 percent (a lawful rate under the applicable usury law); and (2) the president would personally guarantee repayment. The loan was approved and made on April 5. The only document evidencing the loan was a memorandum, written and supplied by the finance company and signed by the president for the corporation, which read in its entirety: "April 5 - In consideration of a loan advanced on this date, [the corporation] hereby promises to pay [the finance company] $100,000 on September 1. [the corporation] By /s/ [the president] , President" The corporation did not repay the loan on or before July 1, although it had sufficient funds to do so. On July 10, the finance company sued the corporation as principal debtor and the president individually as guarantor for $100,000, plus 15 percent interest from April 5. At the trial, can the finance company prove the corporation's oral commitment to repay the loan on or before July 1? A. Yes, because the oral agreement was supported by an independent consideration. B. Yes, because the evidence of the parties' negotiations is relevant to their contractual intent concerning maturity of the debt. C. No, because such evidence is barred by the preexisting duty rule. D. No, because such evidence contradicts the writing and is barred by the parol evidence rule. : Answer choice D is correct. As a general rule, evidence of prior or contemporaneous agreements is not admissible to contradict the terms of a written agreement when all of the terms are completely integrated into the four corners of the agreement. In order to invoke the parol evidence rule, it must be shown that the parties intended to adopt the writing as their entire agreement. Here, answer choice A is incorrect because it ignores the parol evidence rule. Answer choice B is incorrect because the parol evidence rule bars terms that contradict a written agreement. Answer choice C is incorrect because the preexisting duty rule (which states that a promise to perform a preexisting legal duty does not qualify as consideration for a subsequent agreement) is irrelevant here.
A partnership, through its general partner, requested from a bank, a short-term loan of $100,000. On February 1, the general partner and the bank's loan officer agreed orally that the bank would make the loan on the following terms
(1) The loan would be repaid in full on or before the following May 1 and would carry interest at an annual rate of 15 percent (a lawful rate under the applicable usury law); and (2) the general partner would personally guarantee repayment. The loan was approved and made on February 2. The only document evidencing the loan was a memorandum, written and supplied by the bank and signed by the general partner for the partnership, which read in its entirety: "February 2 - In consideration of a loan advanced on this date, [the partnership] hereby promises to pay [the bank] $100,000 on August 1. [the partnership] By /s/ [the general partner] , General Partner" The partnership did not repay the loan on or before May 1, although it had sufficient funds to do so. On May 10, the bank sued the partnership as principal debtor and the general partner individually as guarantor for $100,000, plus 15 percent interest from February 2. At the trial, can the bank enforce the general partner's oral promise to guarantee the loan? A. Yes, because the general partner signed the memorandum. B. Yes, because, as general partner of the debtor-partnership, the general partner is a third-party beneficiary of the loan. C. No, because there was no separate consideration for the general partner's promise. D. No, because of the Statute of Frauds. : Answer choice D is correct. The Statute of Frauds requires certain contracts to be evidence by a writing, such as a contract to answer for the debt of another (suretyship). Suretyship is a three-party contract, wherein one party (surety) promises a second party (obligee) that the surety will be responsible for any debt of a third party (principal) resulting from the principal's failure to pay as agreed. A suretyship induces the second party to extend credit to the third party. A promise to answer for the debt of another must generally be in writing to be enforceable. Here, the general partner's oral promise needed to be evidenced by a writing. As such, answer choice A is incorrect because *although the loan was reduced to writing, the suretyship agreement was not.* Answer choice B is for two reasons: the general partner is not a third-party beneficiary of the loan, and because the Statue of Frauds applies here. Answer choice C is incorrect because consideration for a suretyship promise separate and apart from the consideration for the underlying obligation (here, the loan) is generally not required.
Courts recognize the existence of an implied-in-law contract ("quasi-contract") when one party confers a benefit on another and has a reasonable expectation of compensation. Otherwise, the benefited party would be unjustly enriched. Such situations occur when
(i) the plaintiff has conferred a "measurable benefit" on the defendant; (ii) the plaintiff acted without gratuitous intent; and (iii) it would be unfair to let the defendant retain the benefit because either the defendant had an opportunity to decline the benefit but knowingly accepted it, or the plaintiff had a reasonable excuse for not giving the defendant such opportunity, usually because of an emergency.
On July 18, a shovel manufacturer received an order for the purchase of 500 snow shovels from a wholesaler. The wholesaler had mailed the purchase order on July 15. The order required shipment of the shovels no earlier than September 15 and no later than October 1. Typed conspicuously across the front of the order form was a statement that the wholesaler "reserves the right to cancel this order at any time before September 1." The manufacturer's mailed response, saying "We accept your order," was received by the wholesaler on July 21. As of July 22, which of the following is an accurate statement as to whether a contract was formed? A. No contract was formed, because of the wholesaler's reservation of the right to cancel. B. No contract was formed, because the wholesaler's order was only a revocable offer. C. A contract was formed, but prior to September 1, it was terminable at the will of either party. D. A contract was formed, but prior to September 1, it was an option contract terminable only at the will of the wholesaler.
Answer choice A is correct. By reserving the right to cancel, there was no valid offer until September 1. The primary test of whether a communication is an offer is whether an individual receiving the communication would believe that she could enter into an enforceable deal by satisfying the condition. Here, the order form specifically indicated that the order could be canceled at any time before September 1. Thus, the manufacturer's mailed response prior to September 1 would be an ineffective acceptance, and no contract would be formed. Answer choice B is incorrect, as technically, there was no offer, revocable or otherwise. Answer choice C is incorrect, as no offer would exist, and therefore no contract could be formed, until September 1. Answer choice D is incorrect, as there was no option contract under these facts.
NY - Subcontractor sought to purchase from Plaintiff a large quantity of tile for use in a construction project. Plaintiff refused to enter into a contract with Subcontractor without a guaranty. Subcontractor then approached General, the general contractor on the project, for a guaranty of payment. Plaintiff contacted General to verify that it would guarantee payment, and after several discussions, General faxed a document to Plaintiff reciting the terms of a guaranty. The fax bore a heading at the top of each page that indicated the name "General," a telephone number, the date and time, an unidentified number, and a page number. After the fax transmission, Plaintiff began furnishing Subcontractor with quantities of tile. When Subcontractor died, Plaintiff sought payment for outstanding invoices from General, and General refused, claiming the document was not an enforceable guaranty. How should the court rule on the dispute? A. For General, because the guaranty was not signed. B. For Plaintiff, because the fax imprint satisfied the signature requirement and evidenced intent to be bound. C. For General, because the primary purpose of the guaranty was to benefit General. D. For Plaintiff, because the parties are merchants.
Answer choice A is correct. Every agreement, promise, or undertaking is void unless it is in writing and signed by the party against whom it is to be enforced. A signature for Statute of Frauds purposes may be any marking made with the intent that it serves to authenticate a writing. The act of sending a document to a particular destination does not, by itself, constitute a signing authenticating the contents of the document for Statute of Frauds purposes. Here, there is no indication that the imprint by the fax machine was made with the intent to authenticate the writing or to bind the sender. Thus, answer choice B is incorrect. Answer choice C is incorrect because although there is a limited exception (the main-purpose exception) to the signature requirement for guaranties (suretyships) made with the purpose of benefiting the guarantor, here the purpose of the guaranty and the agreement to supply tiles was primarily for the benefit of Subcontractor, who received tile, and Plaintiff, who received remuneration for such tile. Finally, irrespective of whether the parties are classified as merchants, there is no merchant exception to guaranties of payment; such exception only has application to sale-of-goods contracts. Thus, answer choice D is incorrect.
A director engaged an inexperienced singer to do a chorus role in a musical production for a period of six months at a salary of $200 a week. The singer turned down another role in order to accept this engagement. On the third day of the run, the singer developed laryngitis, making her unable to perform, and a replacement singer was hired to do the part. A week later, the first singer recovered, but the director refused to accept her services for the remainder of the contract period. The singer then brought an action against the director for breach of contract. Which of the following, if true, would adversely affect the first singer's rights in her action against the director? A. The director could not find any substitute except the replacement actress he hired, who demanded a contract for a minimum of six months if she was to perform at all. B. The replacement actress, by general acclaim, was much better in the role than the first actress had been. C. The director had offered the first actress a position as the replacement actress's understudy at a salary of $100 a week, which she declined. D. The director had offered the first actress a secretarial position at a salary of $300 a week, which she declined.
Answer choice A is correct. If the director can argue that the loss of the first actress for one week was material, causing him (as the non-breaching party) not to receive the substantial benefit of his bargain and forcing him to seek a reliable permanent replacement, then the actress's lawsuit is weakened. Answer choices C and D are incorrect because they are not the best answer; they accept the singer's contract liability and argue only for lesser damages. Answer choice B is incorrect because it is irrelevant to the contract liability or measure of damages.
NY - In September, Plaintiff loaned $64,000 to Defendant. The promissory note bore an annual interest rate of 16%. In addition, Plaintiff charged reasonable expenses for processing the loan, which raised the actual rate of interest paid to 17%. One year later, Defendant defaulted, and Plaintiff commenced the present action for non-payment. How should the court rule? A. For Plaintiff, because the contract is enforceable. B. For Defendant, because charging fees for a loan is a violation of the usury laws. C. For Plaintiff, because despite the contract being void for illegality, Plaintiff has a right to recover under quasi-contract for unjust enrichment. D. For Defendant because the loan is usurious and void.
Answer choice A is correct. New York law explicitly makes certain contracts usurious and unenforceable when the interest rate exceeds 16% per annum. However, a borrower may pay reasonable expenses attendant on a loan without rendering the loan usurious. Thus, the loan here is not usurious and answer choices B, C, and D are incorrect.
At a fundraising dinner for a homeless shelter, a wealthy philanthropist told the shelter's director that he would give $50,000 to the shelter at the end of the year. The shelter did not provide consideration for the philanthropist's promise and there is no evidence that the shelter relied on the philanthropist's promise. After a falling out with the director, the philanthropist refused to make the promised payment to the shelter. In an action for breach of contract to recover the $50,000, will the shelter be successful? a. No, because a promise to make a gift is unenforceable without consideration. b. No, because an oral promise to make a gift does not create an enforceable contract. c. Yes, because the philanthropist's promise is enforceable as a charity subscription. d. Yes, because a charity need not establish that it has relied on philanthropist's promise in order to enforce that promise.
Answer choice B is correct. A promise to make a gift generally does not create an enforceable contract because there is no consideration for the promise. While the promise of a charitable donation is enforceable under the doctrine of promissory estoppel (i.e., detrimental reliance), and some courts recognize the application of this doctrine without explicit proof that the charity relied on the promise, in order to enforce such a promise, *the Second Restatement requires that the promise be in writing.* Answer choice A is incorrect because, in order to be enforceable, a promise to make a charitable contribution need not be supported by consideration, but can be enforceable under the doctrine of promissory estoppel. Answer choice C is incorrect because, since the philanthropist's promise was not in writing, it did not qualify as a charitable subscription. Answer choice D is incorrect because, while some courts do not require that a charity establish that it has relied on a donor's promise in order to enforce that promise, the Second Restatement does require that such a promise be in writing in order to be enforceable.
A buyer who was not a merchant entered into a written contract to purchase a new car from a dealer at a cost of $35,000. Since the buyer desired a particular combination of features on the car and the dealer did not have a car with such features in its inventory, the dealer ordered the car from the manufacturer. When the car arrived, the dealer discovered that the manufacturer had increased the dealer's price for the car by five percent. Acting in good faith, the dealer sought to increase the buyer's price of the new car by a similar percentage. Reluctantly, the buyer orally agreed to the price increase, then had a change of heart and refused to complete the purchase. The car dealer eventually sold the car to another customer for $35,000. The dealer sued the buyer to recover damages for breach of contract. Will the dealer be entitled to damages? a. No, because the dealer had a preexisting duty to sell the car for the original contract price. b. No, because the price increase was not in writing. c. Yes, because the dealer sought the price increase in good faith. d. Yes, because the car was specially manufactured for the buyer.
Answer choice B is correct. The UCC Statute of Frauds generally requires that a modified contract be in writing where the value of the goods is $500 or more. There is an exception for specially manufactured goods, but for this exception to apply, the goods cannot be suitable for sale to others in the ordinary course of the seller's business. Because the dealer sold the car to another customer, this exception would not apply. Since the written evidence of the parties' agreement fixed the price of the car at $35,000 and the dealer received this amount from another customer, the dealer would not be entitled to damages. Answer choice A is incorrect because the preexisting duty rule does not apply to a sale of goods governed by the UCC. Answer choice C is incorrect because, although the UCC permits a good faith modification of a contract without consideration, the Statute of Frauds prevents the enforcement of an oral modification. Answer choice D is incorrect because, as noted with respect to answer choice B, the exception to the Statute of Frauds for specially manufactured goods does not apply where the seller can sell the goods in the ordinary course of business.
A seller contracted in writing to deliver to a baker 100 bushels of wheat on August 1 at $3.50 a bushel. Because his suppliers had not delivered enough wheat to him by that time, the seller on August 1 had only 95 bushels of wheat with which to fulfill his contract with the baker. If the seller tenders 95 bushels of wheat to the baker on August 1, and the baker refused to accept or pay for any of the wheat, which of the following best states the legal relationship between the seller and the baker? A. The seller has a cause of action against the baker, because the seller has substantially performed his contract. B. The seller is excused from performing his contract because of impossibility of performance. C. The baker has a cause of action against the seller for the seller's failure to deliver 100 bushels of wheat. D. The baker is obligated to give the seller a reasonable time to attempt to obtain the other five bushels of wheat.
Answer choice C is correct. Under the UCC's perfect tender rule, the buyer has remedies as the result of a seller's failure to tender the goods as agreed upon in the contract. Here, the specific 100 bushels is important because there was a failure to tender 5 bushels when the seller brought only 95. Answer choice A is incorrect because substantial performance is not sufficient to satisfy the UCC's perfect tender rule. Answer choice B is incorrect because the doctrine of impossibility does not apply here. In order for the defense of impracticability or impossibility to apply, an unforeseen event must occur, the non-occurrence of which was a basic assumption of the underlying contract. Failure of delivery by the seller's suppliers is not such an event. Answer choice D is incorrect because the baker may give the seller time, but she is under no obligation to do so.
On April 1, an owner and a buyer signed a writing in which the owner, "in consideration of $100 to be paid to the owner by the buyer," offered the buyer the right to purchase property for $100,000 within 30 days. The writing further provided, "This offer will become effective as an option only if and when the $100 consideration is in fact paid." On April 20, the owner, having received no payment or other communication from the buyer, sold and conveyed property to a third party for $120,000. On April 21, the owner received a letter from the buyer enclosing a cashier's check for $100 payable to the owner and stating, "I am hereby exercising my option to purchase property and am prepared to close whenever you're ready." The buyer prevails in the suit against the owner. Which of the following is the buyer entitled to recover? A. Nominal damages only, because the remedy of specific performance was not available to the buyer. B. The fair market value, if any, of an assignable option to purchase property for $100,000. C. $20,000, plus the amount, if any, by which the fair market value of property on the date of the owner's breach exceeded $120,000. D. The amount, if any, by which the fair market value of property on the date of the owner's breach exceeded $100,000.
Answer choice D is correct. Contracts involving the transfer of an interest in real property may be enforced by an order of specific performance because every parcel of real property is considered unique. But, because the third party is a bona fide purchaser, specific performance is not appropriate here. *The buyer is entitled to the benefit of his bargain, however,* so the court would need to determine what amount the fair market value of property on the date of the breach exceeded the purchase price of $100,000. Hence, Answer choice A is incorrect; the buyer is entitled to more than just nominal damages. Answer choice B is incorrect because it misstates the law. What matters is the fair market value of the property at the time of breach, not the value of an assignable option to purchase. Answer choice C is incorrect because it does not allow for the situation in which the third party paid more than the fair market value of the property, where the buyer's remedy would still only be limited to the answer choice D result.
On June 1, a general contractor and a subcontractor entered into a contract under which the subcontractor agreed to deliver all of the steel joists that the general contractor required in the construction of a hospital building. The contract provided that delivery of the steel joists would begin on September 1. Although the general contractor had no reason to doubt the subcontractor's ability to perform, the general contractor wanted to be sure that the subcontractor was on track for delivery in September. He therefore wrote a letter on July 1 to the subcontractor demanding that the subcontractor provide assurance of its ability to meet the September 1 deadline. The subcontractor refused to provide such assurance. The general contractor then immediately obtained the steel joists from another supplier. If the subcontractor sues the general contractor for breach of contract, is the subcontractor likely to prevail? A. No, because the subcontractor anticipatorily repudiated the contract when it failed to provide adequate assurance. B. No, because the contract failed to specify a definite quantity. C. Yes, because a demand for assurance constitutes a breach of contract when the contract does not expressly authorize a party to demand assurance. D. Yes, because the subcontractor's failure to provide assurance was not a repudiation since there were no reasonable grounds for the general contractor's insecurity.
Answer choice D is correct. The adequate assurance doctrine requires that a party respond to a demand for adequate assurance only if the demand is reasonable and justified. A demand is justified if the demanding party has reasonable grounds for insecurity with respect to the other party's potential performance. The facts in this case state that the general contractor had no reason to doubt the subcontractor's ability to perform. Therefore, the general contractor was unjustified in demanding adequate assurance, and the subcontractor properly refused to respond to the demand. Answer choice A is incorrect because, as stated above, the contractor had no reason to doubt the subcontractor's performance, so the subcontractor was under no obligation to provide assurance. Answer choice B is incorrect because the parties entered into a requirements contract that under UCC § 2-306(1) will not fail for indefiniteness. Answer choice C is incorrect because the adequate assurance doctrine is a UCC implied term that arises by operation of law. Therefore, the doctrine's applicability is not dependent upon the express authority of the party seeking assurance.
A flour wholesaler contracted to deliver to a baker her flour requirements for a one year period. Before delivery of the first scheduled installment, the flour wholesaler sold its business and "assigned" all of its sale contracts to a third party, another reputable and long-time flour wholesaler. The flour wholesaler informed the baker of this transaction. The baker accepted the third party's delivery of the first installment under the contract between the flour wholesaler and the baker, but the baker paid the contract price for that installment to the flour wholesaler and refused to pay anything to the third party. In an action by the third party against the baker for the contractual amount of the first installment, A. The baker will prevail, as she had not expressly accepted the third party as her flour supplier. B. The baker will prevail, as her payment of the contractual installment to the flour wholesaler discharged her obligation. C. The baker will prevail, as the flour wholesaler remained obligated to her, even though the contract had been assigned to the third party. D. The third party will prevail.
Answer choice D is correct. The contractual duty was properly delegated to the third party by the flour wholesaler, as was the contractual right to payment under the contract. Notice of the assignment was properly provided to the baker. Once the baker has notice of the assignment, she has no defense if she pays the flour wholesaler (the assignor) rather than the third party (the assignee). Answer choice A is incorrect, as there is no requirement that an obligee accept an assignee. One might have been established under the contract but was not. Answer choice B is incorrect, as once the baker had notice of the assignment, she could not discharge her obligation by paying the flour wholesaler. Answer choice C is incorrect, as even though the flour wholesaler is still obligated to the baker, by accepting performance from the third party, with notice of the assignment, the baker is obligated to pay the third party.
A famous chef entered into a written agreement with a friend, a well-known interior decorator respected for his revolutionary designs, in which the friend agreed, for a fixed fee, to design the interior of the famous chef's new restaurant, and, upon the famous chef's approval of the design plan, to decorate and furnish the restaurant accordingly. The agreement was silent as to assignment or delegation by either party. Before beginning the work, the friend sold his decorating business to a third party under an agreement in which the friend assigned to the third party, and the third party agreed to complete, the chef-friend contract. The third party, also an experienced decorator of excellent reputation, advised the chef of the assignment and supplied him with information confirming both the third party's financial responsibility and past commercial success. If the famous chef allows the third party to perform and approves his design plan, but the third party fails without legal excuse to complete the decorating as agreed, against whom does the famous chef have an enforceable claim for breach of contract? A. The friend only, because the friend's agreement with the third party did not discharge his duty to the famous chef, and the third party made no express promise to the famous chef. B. The third party only, because the friend's duty to the famous chef was discharged when the friend obtained a skilled decorator (the third party) to perform the chef-friend contract. C. The third party only, because the famous chef was an intended beneficiary of the friend-third party agreement, and the friend's duty to the famous chef was discharged when the famous chef permitted the third party to do the work and approved the third party's design. D. Either the friend or the third party, because 1) the friend's agreement with the third party did not discharge his duty to the famous chef, and 2) the famous chef was an intended beneficiary of the friend-third party agreement.
Answer choice D is correct. When obligations are delegated, the delegatee (here, the third party) is liable for nonperformance, but the delegator (here, the friend) is not automatically released from liability. Therefore, the famous chef can recover from either the friend or the third party for the third party's nonperformance. Answer choice A is incorrect because, although it is true that the friend remains liable, the third party is not required to make an express promise to the famous chef to be liable. Answer choice B is incorrect because it does not address that, absent an express novation releasing the friend from liability, the famous chef may also recover from the friend. Answer choice C is incorrect because, although it is true that the famous chef was an intended beneficiary of the friend-third party agreement, it is incorrect that the friend's duty to the famous chef was discharged.
def of condition subsequent & condition precedent
Performance by one or both of the parties may be made expressly conditional in the contract, and the conditions may precede the obligation to perform (condition precedent), or may discharge the duty to perform after a particular event occurs (condition subsequent)
A written construction contract, under which a contractor agreed to build a new house for an owner at a fixed price of $200,000, contained the following provision
Prior to construction or during the course thereof, this contract may be modified by mutual agreement of the parties as to "extras" or other departures from the plans and specifications provided by the owner and attached hereto. Such modifications, however, may be authorized only in writing, signed by both parties. During construction, the contractor incorporated into the structure overhanging gargoyles and other "extras" orally requested by the owner for orally agreed prices in addition to the contract price. The owner subsequently refused to pay anything for such extras, aggregating $30,000 at the agreed prices, solely on the ground that no written, signed authorization for them was ever effected. If the contractor sues the owner on account of the "extras," which, if any, of the following will effectively support the owner's defense? A. The parol evidence rule and the failure of an express condition. B. The parol evidence rule and the Statue of Frauds. C. The pre-existing duty rule and the Statute of Frauds. D. Neither the parol evidence rule, the pre-existing duty rule, the failure of an express condition, nor the Statute of Frauds. : Answer choice D is correct. None of the theories listed is applicable to the fact pattern presented. Answer choice A is incorrect because the parol evidence rule does not apply to evidence of agreements between the parties subsequent to execution of the writing; it only applies to prior or contemporaneous agreements. Answer choice B is incorrect, as this contract is also not within the Statute of Frauds requirement for a writing, so that theory is irrelevant. Answer choice C is incorrect because the pre-existing duty rule would only apply if the contractor were already contractually obligated to put gargoyles on the owners property, which is not the case here. There were no conditions in the contract, so there could be no successful theory that an express condition failed. Instead, the parties failed to satisfy a requirement of the writing, which the contractor will argue was waived.
UCC risk of loss treatment of delievery contract, for both merchant or not
The UCC provides that a merchant seller generally retains the risk of loss in the absence of a contract term to the contrary until the buyer receives the goods. However, if the buyer is in breach of the contract, the risk of loss passes to the buyer to the extent of any deficiency in the seller's insurance coverage. Here, the store, as buyer, was in breach of the contract by failing to pick up the ornaments by 2:00 pm. Although the UCC only requires that the delivery time be "reasonable" in the absence of a specific contract term, the parties here modified the contract in that regard by agreeing that the seller should pick up the ornaments by 2:00 pm. Consequently, answer choice B is correct and answer choice C is incorrect. Answer choice A is incorrect because, although the risk of loss passes to the buyer upon tender of delivery of the goods when the seller is not a merchant, the artisan here is a merchant (he has specialized knowledge or skill peculiar to glass ornaments). Consequently, the risk of loss does not pass until the buyer receives the goods unless the buyer is in breach of the contract (as was the case here).
effect of partial integration of PER
When documents are only partially integrated, the parties are permitted to present extrinsic evidence only as long as the evidence is consistent with the writing. In this case, the note is inadmissible, regardless of whether the written agreement is a partial or complete integration, because the note contradicts the agreement with regard to the restoration work to be performed on the engine.
A middle-aged farmer who lived by himself in a rural area had surgery to correct an orthopedic problem. Since his recovery would take about a year, he contacted a retired nurse about serving as his caretaker. While the farmer was still in the hospital, the two reached an agreement, the terms of which were specified in two letters. The letter written by the nurse identified the farmer by name and stated, "I agree to take care of your medical needs for a period of one year, starting when you leave the hospital." The letter written by the man identified the nurse by name and stated, "I agree to pay you $10,000 per month." Each letter was signed by its drafter. Before his discharge from the hospital, the man found out that the hospital had a less expensive program for home care, and cancelled the contract. Unable to find other employment, the nurse brought a breach of contract action against the man. Based solely on the letters, will the nurse be able to establish the existence of a contract? a. Yes, because this agreement can be performed within one year. b. Yes, because the writings, taken together, sufficiently state the essential terms of the agreement. c. No, because the Statute of Frauds precludes enforcement. d. No, because the writings do not evidence a valid offer and acceptance. Learner Selected Answer
Yes, because the writings, taken together, sufficiently state the essential terms of the agreement. : Answer choice C is correct. Since the contract cannot be performed within one year from the time of the contract's making, it is subject to the Statute of Frauds. The writings are not sufficient under the Statute of Frauds because, although together they state the essential terms of the bargain and each is signed by the promisor, neither writing references the other. In order to satisfy the Statute of Frauds, at least one of the writings must reference the other. Because the farmer's letter does not indicate the subject matter of the contract (i.e., why the farmer is paying the nurse $10,000 a month), the nurse will be unable to enforce the agreement against the farmer. Answer choice A is incorrect because, although this agreement can be performed within one year of the beginning of performance, it is subject to the Statute of Frauds because it cannot be performed within one year of the date of its making. Answer choice B is incorrect because, although together the writings contain the essential terms of the agreement, neither writing references the other. Answer choice D is incorrect because the writings do not have to establish the existence of a valid offer and acceptance, but instead must state the essential terms of the agreement and be signed by the party against whom enforcement is sought.
the parol evidence rule does not bar all evidence of an oral agreement between parties who have entered into a written contract. For example, the parol evidence rule does not apply when
a party is 1 raising an excuse, 2 establishing a defense, 3 evidencing a separate deal, 4 proving a condition precedent, 5 clarifying an ambiguity, 6 proving subsequent agreements, or 7 making certain clarifications under the UCC.
T/F-to satisfy the Statute of Frauds, must a writing be - a) written at the time of the making of the promise, and/or b) be in a writing addressed to the promisee?
neither is true. A writing may be later, and may be be in any written form, to satisfy the Statute of Frauds
if an offeree sends an acceptance and later a rejection, the acceptance will control even if the rejection was received first, unless
the offeror detrimentally relies on the rejection.
NY - T/F-A secured party always has the option of having itself named in the insurance contract as the loss payee or as an additional insured on the risk.
true
T/F-There is a Statute of Frauds requirement in cases of promises to answer for the debt of another.
true
T/F-When either party to a sale-of-goods contract repudiates with respect to a performance not yet due, the loss of which will substantially impair the value of the contract to the other, the aggrieved party may, in good faith, resort to any appropriate remedy for breach
true
TorF- A warranty that the goods are fit for a particular purpose may be disclaimed by a conspicuous writing. Such a writing need not refer to this warranty by name.
true
TorF - UCC allows modificaiton, as long as in good faith, w/o consideration, and perfect tender rule will continue to apply
true [from lecture]
When are restitution damages available in a breach of contract action?
when they are getting goods at below value. Although expectancy damages normally are awarded in a breach‐of‐ contract action, restitutionary damages are permitted in cases where the nonbreaching party has partially performed a below‐market‐price contract. Otherwise, the breaching party would profit from its breach. Consequently, the paving company may recover the benefit conferred upon the developer as measured by the amount the developer would have had to pay to secure the same performance as that rendered by the paving company.
