Legal Environment Test 2

Raul has finished the computer installation he promised to perform for Tanya, and she has paid him in full. This is: a. an express contract. b. an implied contract. c. an executed contract. d. a bilateral contract. e. no contract.

c. an executed contract.

In February, Chuck orally agrees to sell his hunting cabin, with 15 acres, to Kyle for $35,000, with the deal to be completed in July, when Kyle will have the money. In March, while Chuck is vacationing on his land, he permits Kyle to enter the land and dig the foundation for a new cottage. In July, Kyle arrives with the money, but Chuck refuses to sell. Kyle sues. a. Chuck wins because the contract was never put in writing. b. Chuck wins because the contract terms were unclear. c. Kyle wins because a contract for vacation property does not need to be written. d. Kyle wins because Chuck allowed him to dig the foundation. e. Kyle wins because Chuck has committed fraud.

a. Chuck wins because the contract was never put in writing.

Sam and Elias agree in writing that Sam will give Elias needlepoint lessons once a week for five weeks in exchange for $1,000 per lesson. The contract stipulates that if either party is going to cancel a lesson, they must provide 48 hours' notice. On the morning of the second lesson, Elias calls Sam and says he cannot make it because earthquake damage has closed all roads leading out of his town. Will Elias owe Sam for the missed lesson? a. Elias will not be liable if the contract contains a clause discharging the obligation if there is a force majeure provision. b. Elias will not be liable if he can prove he acted in good faith. c. Yes, because he did not provide Sam with 48 hours' notice. d. Elias will not be liable if this is the first time he has skipped a lesson.

a. Elias will not be liable if the contract contains a clause discharging the obligation if there is a force majeure provision.

When Griffiths sold his house to Hippen, Griffiths orally agreed to buy the house back at the selling price if Hippen should happen to move within the next three years. Two years later, Hippen was transferred to Miami and tried to sell the house back to Griffiths, but Griffiths refused. Hippen sued for breach of contract, but Griffiths claimed there was never an enforceable contract. Who wins? a. Griffiths wins. The purchase - or repurchase - of a house is a classic interest in land, and any such promise must be written to be enforceable. b. Hippen wins because Griffiths orally promised to buy back the house, and Hippen partially or fully performed. c. Griffiths wins because there is an enforceable written contract with Hippen. d. Griffiths wins because there was a subsequent oral modification of the contract which was not in writing.

a. Griffiths wins. The purchase - or repurchase - of a house is a classic interest in land, and any such promise must be written to be enforceable.

Jimmy's Luxury Cars was a used auto dealer located in Miami, Florida. On February 15, 2005, Jimmy's sold a 1995 Mercedes Benz with 126,000 miles to Marty for $17,546. Jimmy, the owner of the business, had driven the Mercedes as his personal vehicle for two years prior to selling it to Marty. He tells Marty during negotiations that the Mercedes has been "the best car he's ever driven." During his ownership, Jimmy had a few problems with the car's air conditioner, but he hadn't had any issues in recent months. When Marty tries to use the air conditioner two months later, in April 2005, it does not function at all. A trip to a mechanic discovers that one of Jimmy's prior repairs will complicate the resolution of the air conditioner's problem, costing about $3,500. Marty asks Jimmy to pay for the repairs, but he refuses. In a claim for the repair costs, what theory of warranty would best support Marty's case? a. Implied warranty of merchantability b. Oral Express Warranty c. Implied warranty of fitness for a particular purpose d. No warranty because the vehicle is used.

a. Implied warranty of merchantability

John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The agreement states that John will pay $500 when the contract is signed and the remaining $500 when FashionWare delivers the zippers. In the contract, John specifically states that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse in 30 days. FashionWare breaches the contract, causing John to miss his delivery date with Camper's Crevasse, which then cancels its contract with John. What remedies are available to John? a. John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse. b. John can recover $1,000 from FashionWare. c. John can recover from FashionWare the $500 he paid for the zippers and any reliance interest. d. Under the UCC, a buyer of goods is not entitled to consequential damages, so John can recover only the $500 he paid for the zippers.

a. John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse.

Rothman's clothing store had a 20-year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's? a. No, based upon the "good faith" requirement. b. Yes, because it was a condition precedent contract. c. Yes, because Foundation strictly performed. d. Yes, based on anticipatory breach.

a. No, based upon the "good faith" requirement.

Annisa, owner of the party planning company Palacial Parties, Inc., is hired by Jerard to organize a spectacular celebration for his girlfriend Amber. Amber was just named winner of the national vocal competition "America Sings," and is arriving home in less than 24 hours. Jerard asks Annisa to hire Jack Flash, Amber's favorite vocal artist, to give a concert on the night of the party. Annisa works very hard trying to get the event together with such short notice, but is unable to get in touch with Jack Flash, who was traveling in Antarctica. The day of the party, there is no entertainment to welcome Amber home, and Jerard files a breach of contract suit against Annisa's company the next day. Jerard also calls Jack Flash and tells him about the missed opportunity; Jack Flash quickly joins the suit against Palacial Parties. Does Jack have a claim for breach of contract against Annisa? a. No, because he is an incidental beneficiary. b. No, because it would have been impossible for him to travel back in time for the party. c. Yes, because he was an intended beneficiary of the contract. d. Yes, because Annisa had a duty to contact him about the opportunity.

a. No, because he is an incidental beneficiary.

Honeybrook Pies and Elsie's Bakery enter into a contract in which Honeybrook will deliver 25 rhubarb pies to Elsie's each week for six months. The next week, Elsie assigns its rights with Honeybrook to Namaste Restaurant, a neighboring café, as part of a new contract. Namaste informs Honeybrook that it only serves food that is both vegan and gluten free, so the rhubarb pies will have to be made differently. Honeybrook has never used vegan or gluten free ingredients and to purchase them and find a new recipe would be extremely expensive. Can Elsie's assign the contract to Namaste? a. No, because it would substantially change the obligor's position. b. Yes, unless it was prohibited in the contract. c. No, because the contract is for personal services. d. No, because this is a repudiation of the contract.

a. No, because it would substantially change the obligor's position.

Simon, aged 10, is invited to a classmate's birthday party at an exclusive ski resort on March 15th. The day will include 4 hours of snowboarding, lunch and birthday cake. Simon's mother checks a box on the invitation that says "YES, we will attend" and returns it to the classmate's address. Unfortunately, they later don't attend the party when Simon comes down with the flu. On March 17th, Simon's mother receives an invoice in the mail from Simon's classmate for $35 that says, "Party No-Show Fee." Can Simon's classmate collect the fee? a. No, because there was no intent to form a contract by Simon's mother. b. Yes, because the classmate has a case for quasi-contract. c. No, because Simon was ill and that is a reasonable excuse to not attend. d. Yes, because Simon's mother checked the "YES" box on the invitation, creating a contract obligation.

a. No, because there was no intent to form a contract by Simon's mother.

Horace signs a contract to deliver 40,000 snow globes to Luther by May 11. Horace delivers the snow globes on May 8. On May 12, Luther calls Horace and says the goods are nonconforming because each one had a replica of James Madison inside of it, instead of the figure of John Quincy Adams he had requested. Horace promises to cure within a reasonable time, and on May 17 he delivers 40,000 conforming snow globes to Luther. Has either party breached the contract? a. No. If Horace reasonably thought that the original snow globes were acceptable, then he properly cured. b. No. Horace has properly cured because he got the original goods to Luther before the May 11 deadline. c. Yes. Horace breached the contract because he did not deliver conforming goods to Luther until after the May 11 deadline. d. Yes. Luther breached the contract because he did not reject the goods until after the May 11 deadline.

a. No. If Horace reasonably thought that the original snow globes were acceptable, then he properly cured.

Rafferty, a caterer, and Maya, an opera singer, are pleased to be hired to provide their respective services at the same wedding. Unlike Maya's contract, Rafferty's contains a non-delegation clause. Two days before the wedding, Rafferty and Maya decide to go on vacation, so they delegate their wedding obligations to friends they know and trust. The bride and groom object. Is delegation permissible? a. No. Neither Rafferty nor Maya can delegate their obligations. b. Yes, Rafferty and Maya may delegate their responsibilities if they can find someone equally qualified to do their jobs. c. Rafferty may delegate his obligations, but Maya may not. d. Maya may delegate her obligations, but Rafferty may not.

a. No. Neither Rafferty nor Maya can delegate their obligations.

Refinery contracted with Oilko to buy oil at $100 per barrel. Refinery refused Oilko's shipment on November 1 when the oil was worth $99 per barrel. Oilko waited three months to resell the oil when it received only $92 per barrel. Under the Uniform Commercial Code (UCC), what damages may Oilko receive? a. Only $1 per barrel in damages. b. Only $8 per barrel in damages. c. No damages. d. None of these answers is correct.

a. Only $1 per barrel in damages

Polyquan, Inc. emails a dozen companies, offering to sell them 100 sweatshirts in either blue, red, orange, black, or green. The sweatshirts are $6 each. Shirts-A-Lot Clothing emails back, "We accept your offer of 100 sweatshirts for $6 each. No orange sweatshirts." Bespoke Tourism emails back, "We accept your offer of 100 sweatshirts for $6 each on the condition that you do not include any orange sweatshirts." Does Polyquan have a contract with either company? a. Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism. b. No, Polyquan does not have a contract with either company. c. Polyquan has a contract with Bespoke Tourism but not with Shirts-A-Lot. d. Yes, Polyquan has a contract with both companies.

a. Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism.

Rick was in the process of buying 320 acres of land when Rick signed a contract to sell that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before Simon could complete the purchase of the land, Rick went bankrupt. Which of the following remedies should Simon seek from Rick? a. Restitution b. Expectation c. Specific performance d. Reformation

a. Restitution

Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials, and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome? a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job. b. Rodolfo owes Tessa no additional money, because she had a preexisting duty to complete the project. c. Rodolfo owes Tessa the additional money because Tessa has done additional work. d. Rodolfo owes Tessa the additional money because he had a preexisting duty to pay her for the job.

a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.

Sabrina tells her boyfriend Alexander that if they get married, she will give him 50 percent ownership of her tech startup company. Alexander quits his job as a teacher and begins working at Sabrina's company. The two get married but divorce ten months later. Alexander claims that Sabrina owes him 50 percent of her company. Please rule. a. Sabrina owes Alexander nothing because the agreement was not in writing. b. Sabrina owes Alexander 50 percent of her company because he fully performed his contractual obligations. c. Sabrina owes Alexander 50 percent of the company because she made the promise out of self-interest. d. Sabrina owes Alexander nothing because their marriage lasted less than a year.

a. Sabrina owes Alexander nothing because the agreement was not in writing.

Jonah is 12 years old and absolutely loves soccer trading cards. At the local hobby shop, he finds a "Lionel Messi" trading card in the case, which has a handwritten tag by it that reads "9/00-." The employee at the front desk interprets this to mean $9.00 and sells Jonah the card for that amount. A few days later, Ronaldo, the card shop owner calls Jonah and asks for the card back because it is worth around $900. Jonah refuses, and Ronaldo sues. Which of the following is Jonah's strongest argument? a. That neither Ronaldo nor Jonah knew the real value of the card. b. That Ronaldo mislabeled the price tag and now has to live with the consequences. c. That both Ronaldo and Jonah thought the card was a limited edition soccer sticker (with a market value of about $10) and did not realize it was a valuable trading card. d. That Jonah is a minor so the contract is voidable.

a. That neither Ronaldo nor Jonah knew the real value of the card.

While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip, and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What will result? a. The court will apply common law, and Mary will lose. b. The court will apply common law, and Mary will win. c. The court will apply the UCC, and Mary will lose. d. The court will apply the UCC, and Mary will win.

a. The court will apply common law, and Mary will lose.

Faylene underwent heart surgery that included, among other measures, the implantation of a pacemaker in her chest. Faylene later alleged that the surgeon's negligence resulted in a serious infection. Faylene's insurance company stated that the Uniform Commercial Code (UCC) governed the dispute because at issue was a contract for a pacemaker, which is a good. The hospital responded that the claim was based on a contract for a surgery, which is a service, and was therefore covered by the common law. What result is most likely? a. The court will apply the predominant purpose test and will probably hold that this was a contract for a service. b. The court will apply the predominant purpose test and will probably hold that this was a contract for a good. c. The court will hold that the hospital is a merchant and apply the UCC. d. None of these answers is correct.

a. The court will apply the predominant purpose test and will probably hold that this was a contract for a service.

Louise emails Sonya, "I will sell you my house at 129 Brittle Blvd. for $88,000, payable in one month. Best, Louise." Sonya emails back, "Louise, I accept the offer to buy your house at that price. Sonya." Neither party prints a copy of the two emails. a. The parties have a binding contract for the sale of Louise's house. b. Louise is bound by the agreement, but Sonya is not. c. Sonya is bound by the agreement, but Louise is not. d. Neither party is bound because the agreement was never put in writing. e. Neither party is bound because the agreement was never signed.

a. The parties have a binding contract for the sale of Louise's house.

Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up their father, Luther, at his house where he is singing a goodbye song to each of his 20 plants, and eating pancakes out of his coat pocket. Next, they drive to an assisted living facility, to collect their mother, Augusta, who has lived there since a judge declared her mentally incompetent a few years ago. When they arrive at their hotel, Luther writes postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom and her parents each a souvenir snow globe for $1,000. The snow globes are for sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their money back? a. The sale to Augusta is void; the sales to Luther and Tom may be voidable. b. All three sales are voidable. c. The sale to Tom is voidable; the sales to Luther and Augusta are both void. d. The sales to Augusta and Luther are both void; the sale to Tom is valid.

a. The sale to Augusta is void; the sales to Luther and Tom may be voidable.

Angelo and Yvette were injured in an automobile accident allegedly caused by a vehicle belonging to Truck Equipment of Boston. Quagmire Insurance Co. paid insurance benefits to Angelo and Yvette, who then assigned to Quagmire their claims against Truck Equipment. Quagmire sued Truck Equipment, which moved to dismiss. Who wins? a. Truck Equipment wins because a claim for personal injury cannot be assigned. b. Quagmire wins because this was a successful legal delegation. c. Quagmire wins because an assignment for consideration is irrevocable. d. Truck Equipment wins because an insurance company cannot sue a third party based on an insured's injury.

a. Truck Equipment wins because a claim for personal injury cannot be assigned.

Vivica is a sales associate at Sir LampsALot lighting store. She tells a customer, "This lamp gives the most beautiful lighting and is virtually indestructible. You'll change the bulbs once a year at most." The customer purchases the lamp and signs a sales contract that states, "Customer will be able to use a single lamp to safely light an entire living room. However, Sir LampsALot makes no warranty with respect to this product. Any statements made by a salesperson or printed in this sales contract are disclaimed and form no part of this contract." Are Vivica's statements and the sales contract promises disclaimed? a. Vivica's statements are disclaimed, but the promise in the contract is not. b. Vivica's statements are valid, but the promise in the contract is disclaimed. c. Both are disclaimed. d. Neither is disclaimed.

a. Vivica's statements are disclaimed, but the promise in the contract is not.

Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250? a. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed. b. Yes, but only if the parties agreed prior to the start of work that additional hours would require additional pay. c. No, Paul was already required to paint the kitchen, so there was no consideration. d. No, because the agreement was not signed in writing.

a. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed.

Lucian has every reason to believe the new pizza shop he is opening will be a success, but he also has a lot riding on it. He has borrowed a significant amount and has refinanced his house to pay for the expenses of starting up. If the business does not succeed, it will be a disaster for his family. Fortunately, the construction and start up of the business will be pretty simple, and he is hiring his sister Allegra (an experienced contractor) to do most of the work. Should Lucian and Allegra put their contract in writing? a. Yes, because it is essential to the success of Lucian's business that construction goes smoothly. b. No, if the construction job is simple and straight forward. c. Yes, because the Statute of Frauds requires it. d. No, because Lucian and Allegra are family.

a. Yes, because it is essential to the success of Lucian's business that construction goes smoothly.

Woodson Walker and Associates leased computer equipment from Park Ryan Leasing. The lease said nothing about assignment. Park Ryan assigned the lease to TCB. When Walker failed to make several payments on the lease, TCB sued. Was the assignment valid if the original lease made no mention of assignment rights? a. Yes, because the contract did not preclude the assignment. b. Yes, because this was a personal service. c. No, because lease contracts cannot be delegated. d. No, because the contract is silent about assignment.

a. Yes, because the contract did not preclude the assignment.

Fritz's Pet Shop has a contract with PlanetLazy Pet Products that states: a) PlanetLazy will deliver to Fritz 25 pet beds on the second Saturday of every month for one year; b) Fritz will pay PlanetLazy $2,500 on the first day of each month for one year. If Fritz does not pay PlanetLazy on a given month, is PlanetLazy still obligated to continue delivering pet beds? a. Yes, because the terms are reciprocal promises. b. No, because Fritz is not acting in good faith. c. Yes, because the terms are conditional promises. d. No, because Fritz breached the contract.

a. Yes, because the terms are reciprocal promises.

Custom Cashmere sends Ultrasound, a maternity clothing boutique, a sales agreement for 200 sweaters. Before signing and returning the agreement, Ultrasound crosses out the provision that reads "for delivery to the Ultrasound boutique" and writes in "for delivery to the Ultrasound warehouse." The warehouse is 400 miles away from the Ultrasound boutique. Do Cashmere and Ultrasound have an enforceable contract? a. Yes, the agreement is enforceable. The court will supply gap-fillers for the terms of delivery. b. Yes, the agreement is enforceable. Cashmere must deliver the sweaters to the warehouse unless the sales agreement specifically stated that the parties must adhere to the seller's terms. c. Yes, the agreement is enforceable. Both parties are merchants, so Ultrasound's new delivery terms are included in the agreement. d. No, the agreement is not enforceable. Ultrasound's acceptance changes a fundamental aspect of the contract, and a court will refuse to enforce it.

a. Yes, the agreement is enforceable. The court will supply gap-fillers for the terms of delivery.

CompuCastle, an electronics store, discusses a deal with OptiScreens, a manufacturer of high-end computer monitors. In December, they verbally agree that CompuCastle will buy 200 AR-206 model monitors, but neither party follows up for several months. In April, CompuCastle sends OptiScreens a fax that reads, "how 'bout them screens? Our clients want 'em and so do we!" OptiScreens does not respond in writing, but sends CompuCastle 200 AR-206 models one week later. CompuCastle accepts them. If CompuCastle does not pay OptiScreens, may OptiScreens sue for breach of contract? a. Yes, there is an enforceable contract because the parties' conduct shows that they reached an agreement. b. No, there is no contract because the common law requires both parties to sign the agreement. c. Yes, because the deal is in writing so there is an enforceable contract. d. No, because a court will be unable to determine when exactly the contract was formed.

a. Yes, there is an enforceable contract because the parties' conduct shows that they reached an agreement.

Mastercraft Boat made boats and often used instrument panels manufactured and assembled by Ace Industries. Typically, Ace would order electrical instruments and other parts and assemble them to Mastercraft's specifications. Mastercraft decided to work with a different assembler, M & G Electronics, so it terminated its relationship with Ace and requested that Ace deliver the remaining parts to M & G, which Ace did. Mastercraft then refused to pay for these parts, claiming that they were nonconforming. Is Ace entitled to payment from Mastercraft for the parts? a. Yes. Mastercraft has accepted the goods and, therefore, must pay Ace for them. b. No. The time to collect for the goods has passed. c. No. Ace sent nonconforming goods. d. No. Ace can recover only from M & G Electronics because that is who received the goods.

a. Yes. Mastercraft has accepted the goods and, therefore, must pay Ace for them.

Marion orally agrees to sell Ashley her condominium in Philadelphia for $700,000. The parties have known each other for 20 years and do not bother to put anything in writing. Based on the agreement, Marion hires a moving company to pack up all her goods and move them to a storage warehouse. Ashley shows up with a cashier's check, and Marion says, "You're going to love it here." But at the last minute, Marion declines to take the check and refuses to sell. Ashley sues and wins: a. nothing. b. the condominium. c. $700,000. d. the difference between $700,000 and the condominium's market value. e. damages for fraud.

a. nothing.

Mark, a newspaper editor, walks into the newsroom and announces to a group of five reporters: "I'll pay a $2,000 bonus to the first reporter who finds definitive evidence that Senator Blue smoked marijuana at the celebrity party last Friday." Anna, the first reporter to produce the evidence, claims her bonus based on: a. unilateral contract. b. promissory estoppel. c. quasi-contract. d. implied contract. e. express contract.a.

a. unilateral contract.

Sarah, age 17, uses $850 of her hard-earned, summer-job money to pay cash for a diamond pendant for the senior prom. She has a wonderful time at the dance, but decides the pendant was an extravagance, returns it, and demands a refund. The store has a "no refund" policy that is clearly stated on a sign on the wall. There was no defect in the pendant. The store refuses the refund. When Sarah sues, she will: a. win $850. b. win $425. c. win, but only if she did not notice the "no refund" policy. d. win, but only if she did not think the "no refund" policy applied to her. e. lose.

a. win $850.

Daniel and Annie signed a contract providing that Daniel would lend $50,000 to Annie's craft beer business at an interest rate of 8 percent. During negotiations, Daniel and Annie agreed that the interest rate would go down to 5 percent once she had sold 25,000 cases. This provision never made it into the contract. After the contract was signed, Daniel orally agreed to reduce the interest rate to 6 percent once volume exceeded 15,000 cases. The contract had an integration provision but no modification clause. Annie has sold 30,000 cases. What interest rate must she pay? a. 8 percent b. 6 percent c. 5 percent d. The contract is void because the terms are unclear.

b. 6 percent

Which one of the following transactions is not governed by Article 2 of the UCC? a. Purchasing an automobile for $35,000 b. Leasing an automobile worth $35,000 c. Purchasing a sound system worth $501 d. Purchasing a sound system worth $499

b. Leasing an automobile worth $35,000

Malay, the CEO of Santi, Inc., interviews four lawyers to help with a potentially lucrative business deal. He provides each candidate the bare facts of the deal so they can discuss it and present their approaches. Which of the four should he hire? a. Monika, who tells Malay that she will annihilate the opposing party in the negotiations. b. Anthony, who tells Malay about the risks of that sort of deal and ways to accomplish Santi's goals safely and legally. c. Lola, who says most contracts she drafts end up being disputed in court, but that she wins every ensuing trial. d. Matthias, who advises Malay that this sort of deal is always a terrible idea.

b. Anthony, who tells Malay about the risks of that sort of deal and ways to accomplish Santi's goals safely and legally.

A contract states that Buzz Co. legally exists and will provide 2,000 pounds of wild salmon each week. Which of the following statements is true? a. Clause 1 is a covenant, and Clause 2 is a representation. b. Clause 1 is a representation, and Clause 2 is a covenant. c. Both clauses are representations. d. Both clauses are covenants.

b. Clause 1 is a representation, and Clause 2 is a covenant.

Desmond has been a fan of Crispin's paintings for years and is thrilled when the artist promises to give him painting lessons. The two agree that Crispin will provide Desmond with five weekly lessons for $1,000 each, payable once the lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. What result? a. Crispin's estate will get nothing because the contract is discharged by his death. b. Crispin's estate will be able to recover $2,000 in restitution. c. Crispin's estate will be able to recover the full contract price of $5,000. d. Crispin's estate will be able to recover $2,000 under the doctrine of promissory estoppel.

b. Crispin's estate will be able to recover $2,000 in restitution.

Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins? a. Interactive loses because it had a unilateral, implied employment contract with Foley that incorporated the seven steps. b. Foley wins because he and Interactive had a bilateral, express employment contract that incorporated the seven steps. c. Foley loses because he and Interactive had a unilateral, express employment contract that incorporated the seven steps. d. Interactive wins because the seven steps were only an implied, not express, condition to its employment contract with Foley.

b. Foley wins because he and Interactive had a bilateral, express employment contract that incorporated the seven steps.

In which case is a court most likely to enforce an exculpatory clause? a. Dentistry b. Hang gliding c. Parking lot d. Public transportation e. Accounting

b. Hang gliding

Which of the following conditions must be met for an implied warranty of fitness for a particular purpose to arise? The warranty must be in writing. The seller must know that the buyer was relying on the seller in selecting the goods. a. I only b. II only c. Both I and II d. Neither I nor II

b. II only

Mrs. Martin tells some neighborhood kids that she will pay $100 if any of them mows her lawn. Jake goes to a hardware store, purchases a lawnmower for $60, and then mows Mrs. Martin's lawn. Jake has entered into which types of contract? a. Jake has made a bilateral contract with Mrs. Martin and a unilateral contract with the hardware store. b. Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store. c. Jake has made a bilateral contract with Mrs. Martin and a bilateral contract with the hardware store. d. Jake has made a unilateral contract with Mrs. Martin and a unilateral contract with the hardware store.

b. Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store.

Museum schedules a major fund-raising dinner, devoted to a famous Botticelli painting, for September 15. Museum then hires Sue Ellen to restore the picture, her work to be done no later than September 14. Sue Ellen is late with the restoration, forcing Museum to cancel the dinner and lose at least $500,000 in donations. Sue Ellen delivers the picture, in excellent condition, two weeks late. Museum sues. a. Museum will win. b. Museum will win if, when the parties made the deal, Sue Ellen knew the importance of the date. c. Museum will win provided that it was Sue Ellen's fault she was late. d. Museum will win provided that it was not Sue Ellen's fault she was late. e. Museum will lose.

b. Museum will win if, when the parties made the deal, Sue Ellen knew the importance of the date.

Yvonne promises to sell 500 pounds of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a contract with McKinley Venturesto to ship the cargo. The contract stipulates that McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not arrive for 5 days, during which time the market price of rice decreases 11 percent. Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her damages because of McKinley's breach? a. Yes, if Yvonne can provide the court with enough information to calculate the extent of her loss. b. No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money. c. Yes, because McKinley's breach caused the damages. d. No, because this is a contract for the sale of goods.

b. No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money.

Jackie offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract been formed? At what price? a. Yes. Mel must pay $50. b. No. Mel made a counteroffer, which Jackie rejected. c. Yes. Mel must pay $45, the average of the two prices. d. Yes. Mel must pay $40.

b. No. Mel made a counteroffer, which Jackie rejected.

When discussing the sale of a used Beechcraft Baron airplane, a United Technologies agent told Thompson the plane was "excellently maintained" and said it had been inspected for airworthiness every 100 hours. Thompson signed a sales agreement that stated in large, bold letters that the plane was sold "AS IS" and that there were "no representations or warranties, express or implied, including the condition of the aircraft, its merchantability, or its fitness for any particular purpose." The sales contract did not say anything about the plane's maintenance history or current condition. When Thompson tried to fly the plane after purchasing it, he immediately experienced problems with its brakes, steering, ability to climb, and performance while cruising. Can Thompson successfully sue United for breach of express and implied warranties? a. Yes. United breached the implied warranty of merchantability. b. No. The aircraft was sold "as is." c. Yes. United breached an express warranty. d. Yes. United Technologies breached the implied warranty of fitness for a particular purpose.

b. No. The aircraft was sold "as is."

Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result? a. Rashard will win because he has offered substantial performance. b. Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof. c. Alex will lose because the contract did not promise anything about the materials used to make the umbrellas. d. Rashard will win because the contract did not require personal satisfaction.

b. Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.

The Onyx Company negotiated intensely for months to hire Robert Conyers as its new Chief Executive Officer (CEO). Attorneys for both the Company and Mr. Conyers were now working on the final employment contract, and it was especially important to the Onyx Company to keep their new CEO for at least 10 years. Because Mr. Conyers had exceptional skills and considerable experience related directly to the company's industry, it was important for the contract to include an atypical retention clause in the event of a merger with another entity. If Onyx's attorney was concerned about enforceability of the retention segment, what could they add to the contract to safeguard the rest of the provisions? a. Choice of Law provision b. Severability provision c. Integration provision d. Force majeure provision

b. Severability provision

The Progressive Construction Company was building a "Smart" home that would have all appliances and systems connected to the internet and controllable by mobile phone. Melissa, the owner of the company, saw an advertisement for a recently-developed proprietary stereo system that would fit well into her house plan. In a conversation with the stereo company, Melissa discovered that the system equipment, including lighting, phone, music and theater elements, would cost $15,500, and installation would cost between approximately between $8,000 and $12,000, depending on the house configuration. Due to the unusual nature of the system, only the manufacturer's employees can install it. The companies form a contract to have the system installed, and everything is completed within one month. The final cost was $15,500 for the equipment, and $11,200 for the installation. A few weeks after the system is installed, Melissa begins to have problems with various components. The issues are so serious that she refuses to pay the stereo company invoices. If the stereo company brings a claim to recover their payments under the contract, will the court apply common law, the Uniform Commercial Code, or both, to this contract? a. The Common Law would apply because this is predominantly a service contract. b. The Uniform Commercial Code (UCC) applies because this is predominantly a contract for goods. c. Both the Common Law and UCC apply because this is a contract for goods and services. d. Neither the Common Law or UCC applies to this contract.

b. The Uniform Commercial Code (UCC) applies because this is predominantly a contract for goods.

Lewis signed a contract for the rights to all timber located on Nine-Mile Mine agreeing to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him from entering the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf for which Lewis had no contradicting evidence. The court granted summary judgment. Why? a. Specific performance, the typical remedy for an interest in land, could not make Lewis whole. b. The market value evidence shows that Lewis suffered no harm and, therefore, had no claim. c. The market value evidence proved that Lewis could not recover punitive damages. d. Nine-Mile was not liable because it cannot be held liable for fluctuations in the market rate for timber.

b. The market value evidence shows that Lewis suffered no harm and, therefore, had no claim.

One provision in a contract states "Ulysses vows he is a board-certified physician" and another states "Emma promises not to eat red meat for six months from the date of this agreement." Which of the following best describes these contract terms? a. Emma has made a modification; Ulysses has made a covenant. b. Ulysses has made a warranty and representation; Emma has made a covenant. c. Ulysses and Emma have each made a covenant. d. Ulysses has made a covenant; Emma has made a warranty and representation.

b. Ulysses has made a warranty and representation; Emma has made a covenant.

While negotiating with Stewart to purchase his house, Yasmine asks him about the condition of the roof. "Excellent," he replies. "It is only 2 years old, and should last 25 more." In fact, Stewart knows that the roof is 26 years old and has had a series of leaks. The parties sign a sales contract for $600,000. A week before Yasmine is to pay for the house and take possession, she discovers the leaks and learns that a new roof will cost $35,000. What kind of contract exists between Yasmine and Stewart? a. Unenforceable b. Voidable by Yasmine c. Voidable by Stewart d. Valid

b. Voidable by Yasmine

Central Maine Power Co. (CMPC) made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc. (MSI) decided to install electrical heat in a housing project it was constructing in Waterville, Maine. MSI built the units and requested payment for the full amount of the promotional offer. Is CMPC obligated to pay? Why or why not? a. Yes, CMPC is obligated to pay because this was a bilateral contract, and MSI performed. b. Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed. c. No, CMPC is not obligated to pay because this was a bilateral contract, and MSI did not promise to perform. d. No, CMPC is not obligated to pay because MSI did not make a serious offer.

b. Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed.

Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise? a. Yes, because Ruben provided moral consideration. b. Yes, because Ruben relied on the promise. c. No, because Ruben did not know about the $100,000 before he rescued Maybelline. d. No, because the promise is supported by past consideration.

b. Yes, because Ruben relied on the promise.

For seven years, Stanford Owens has run a successful practice that helps small businesses file their taxes, become incorporated, and perform other legal tasks. Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx, almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's services. A month later, Stanford is more familiar with the local business landscape and realizes that most people offering his services in NYC charge around $13,000 for six months of work because of the higher costs to do business in NYC. Is the deal between Stanford and DiggyWerx enforceable? a. No, because it is unconscionable due to the difference in bargaining power. b. Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment. c. Yes, because Stanford is still receiving a fair price for his services. d. No, because there is insufficient consideration.

b. Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment.

Tara is building an artificial beach at her lakefront resort. She agrees in writing to buy 1,000 tons of sand from Frank for $20 per ton, with delivery on June 1, at her resort. Frank fails to deliver any sand, and Tara is forced to go elsewhere. She buys 1,000 tons from Maureen at $25 per ton and then is forced to pay Walter $5,000 to haul the sand to her resort. Tara sues Frank. Tara will recover: a. nothing. b. $5,000. c. $10,000. d. $15,000. e. $30,000.

c. $10,000.

Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is: a. A condition subsequent. b. A requirement for substantial performance. c. A condition precedent. d. A concurrent condition.

c. A condition precedent.

Ted's wallet is as empty as his bank account, and he needs $3,500 immediately. Fortunately, he has three gold coins that he inherited from his grandfather. Each is worth $2,500, but it is Sunday, and the local rare-coin store is closed. When approached, Ted's neighbor Andrea agrees to buy the first coin for $2,300. Another neighbor, Cami, agrees to buy the second for $1,100. A final neighbor, Lorne, offers "all the money I have on me"—$100—for the last coin. Desperate, Ted agrees to the proposal. Which of the deals is supported by consideration? a. Ted's agreement with Andrea, only b. Ted's agreements with Andrea and Cami, only c. All three of the agreements d. None of the agreements

c. All three of the agreements

The agreement between Bob and Cathy says nothing about assignment. May Bob assign his claim to Hardknuckle? a. Bob may assign his claim, but only with Cathy's agreement. b. Bob may assign his claim, but only if Cathy and Hardknuckle agree. c. Bob may assign his claim without Cathy's agreement. d. Bob may assign his claim, but Cathy may nullify the assignment. e. Bob may not assign his claim because it violates public policy.

c. Bob may assign his claim without Cathy's agreement.

Consider the following: Madison says to a group of students, "I'll pay $35 to the first one of you who shows up at my house and mows my lawn." Lea posts a flyer around town that reads, "Reward: $500 for information about the person who keyed my truck last Saturday night in the Wag-a-Bag parking lot. Call Lea at 555-5309." Which of these proposes a unilateral contract? a. I only b. II only c. Both I and II d. a bilateral contract. e. None of these

c. Both I and II

Cookie Co. offered to sell Market 20,000 pounds of cookies at $1.00 per pound, subject to certain specified delivery terms. Market replied in writing as follows: "We accept your offer for 20,000 pounds of cookies at $1.00 per pound, to be weighed on scale with a valid city certificate." Under the UCC: a. Cookie and Market will have a contract only if Cookie agrees to the certified scale requirement. b. Cookie and Market do not have a contract because Market's reply included a different term. c. Cookie and Market have a contract. d. Cookie and Market do not have a contract because Market's reply included an additional term.

c. Cookie and Market have a contract.

Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule. a. Power wins because they strictly performed. b. Power wins based on anticipatory breach. c. Krug wins because of true impossibility. d. Power wins because it was a personal satisfaction contract.

c. Krug wins because of true impossibility.

Tobias is selling a surrealist painting. He tells Maud that the picture is by the famous French artist Magritte, although in fact Tobias has no idea whether that is true or not. Tobias's statement is: a. a bilateral mistake. b. a unilateral mistake. c. a fraud. d. an innocent misrepresentation. e. legal, so long as he acted in good faith

c. a fraud.

Louise Latour, a successful interior designer, won a contract to design the interiors of Greentree Broadcasting's corporate headquarters. A few weeks after signing the agreement, Greentree receives a much cheaper bid from another designer and decides to get out of the contract. A Greentree lawyer notices that the top of the contract contains an embarrassing typographical error: It states that the agreement is between "Louise Latour and Grantree Broadcasting." Will Greentree be able to use this mistake to get out of the contract? a. Yes, because enforcement of the agreement was conditioned on having accurate terms in the contract. b. Yes. If Latour drafted the contract, then the court will interpret any ambiguities against it, and find in favor of Greentree. c. No. There is clear and convincing evidence that the mistake does not reflect the intent of the parties, and the court will reform the contract. d. Yes, because the party names are a material aspect of the contract.

c. No. There is clear and convincing evidence that the mistake does not reflect the intent of the parties, and the court will reform the contract.

Seller's sales contract states: "The model 8J flagpole will withstand winds up to 150 mph, for a minimum of 35 years." The same contract includes this: "This contract makes no warranties, and any implied warranties are hereby disclaimed." School buys the flagpole, which blows down six months later in a 105-mph wind. a. Seller is not liable because it never made any express warranties. b. Seller is not liable because it disclaimed any warranties. c. Seller is liable because the disclaimer was invalid. d. Seller is liable because implied warranties may not be disclaimed.

c. Seller is liable because the disclaimer was invalid.

Slimline and Distributor signed a contract that provided that Distributor would use reasonable efforts to promote and sell Slimline Diet Soda, which was already being sold at Warehouse Club. After the contract was signed, Distributor stopped conducting the in-store demos of Slimline it had previously been doing at Warehouse, and it did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who is likely to win? a. Distributer, because it acted in good faith. b. Distributor, because Slimline sales continued to increase. c. Slimline, because Distributer's conduct is a material breach. d. Slimline, because the terms of the contract were ambiguous.

c. Slimline, because Distributer's conduct is a material breach.

Fred slips on some ice on Opal's front steps and shatters both his kneecaps. Opal has a comprehensive homeowner's policy with Riskocity Insurance, but Riskocity refuses to pay for Fred's injuries as the policy does not cover accidents caused by Opal's "dangerous conduct." The Community Rules of Opal's gated community require residents to keep their front steps free of ice. Riskocity contends that because Opal violated the Community Rules, she is liable for Fred's injury. Opal argues that the insurance policy makes no mention of her Community Rules and because she could not foresee Riskocity relying on the Rules, they should not prevent her from recovering. What result? a. Riskocity will win because Opal was violating the Community Rules. b. The insurance contract contained a mistake, so the Community Rules will not prevent Opal from recovering. c. The insurance contract was ambiguous, so the Community Rules will not prevent Opal from recovering. d. Riskocity will win because the insurance policy was ambiguous.

c. The insurance contract was ambiguous, so the Community Rules will not prevent Opal from recovering.

Confluence Corporation, located in Champaign, Illinois, decided to begin buying rare earth metal from the Canadian Rare Earth Company, with headquarters in Montreal, Quebec Province. The following clause was included in a signed contract between the companies to purchase quantities of the metal Lanthanum for Confluence's production of rechargeable batteries: "During the Initial Term, Seller shall sell the Products to Buyer at the purchase prices set forth on Exhibit A. All prices are in dollars with no cents. Any adjustment to prices will require written modification signed by both parties within ten (10) business days." A few weeks after signing, the Confluence Corporation attorney calls the Canadian company with a concern about the clause. What do you believe this concern may be? a. The "Seller" and "Buyer" are not defined. b. Adjustments require the signature of both parties within 10 business days. c. The prices are in dollars. d. Adjustments require written modification.

c. The prices are in dollars.

Rosa and Happy Movers sign a contract that states Rosa will pay Happy Movers $100 per hour to move all of her furniture to her new house on September 1. The contract also states that any modifications to the agreement must be "made in writing signed by the party to be charged with the amendment." The day of the move, a Happy Movers representative shows Rosa a flyer for a promotion offering to complete a move in under two hours for an extra $300, and Rosa agrees orally to the deal. The Happy Movers representative signs his name on the flyer, and staples the flyer to the contract. If Happy Movers finishes moving Rosa's furniture in less than two hours, is Rosa contractually required to pay the extra $300? a. Yes, because Rosa agreed orally to the promotion. b. No, because Rosa did not sign the flyer. c. Yes, because Rosa agreed orally to the promotion, and there was a signed writing attached to the contract. d. No, because contracts cannot be amended at the time of performance.

c. Yes, because Rosa agreed orally to the promotion, and there was a signed writing attached to the contract.

Liesl purchased an insurance policy on her house. The policy stated that the insurance company was not liable for any damage to her house caused by vandalism or burglary. An arsonist burned down Liesl's house. Is the insurance company liable? a. No, because arson is a form of vandalism. b. Yes, because arson is not a form of vandalism. c. Yes, because the language is ambiguous and should be interpreted against the insurance company. d. No, because the language is vague and should be interpreted against Liesl.

c. Yes, because the language is ambiguous and should be interpreted against the insurance company

The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness. They repaired the buckling wall by installing I-beams to support it, but never resolved the leaks or the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. If asked, they stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000 and immediately began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages? a. Yes, the Silvas are entitled to damages for fraud because the McAllisters claimed the I-beams were added only for reinforcement. b. Yes, the Silvas are entitled to damages for nondisclosure because the McAllisters did not mention any problems. c. Yes, the Silvas are entitled to damages for both fraud and nondisclosure. d. No, the Silvas are not entitled to any money damages.

c. Yes, the Silvas are entitled to damages for both fraud and nondisclosure.

Stephan and his boss agree to extend his employment contract by an additional six months. The employment contract states that all amendments must be in writing, so Stephan and his boss cross out and change the provision in his contract that covers the duration of his employment and rewrite it to include the additional six months. They each initial and date the change, and they each keep a copy of the agreement. Is the amendment valid? a. No. Parties are allowed to handwrite in new terms only when the contract is first being signed, so this is not valid. b. Yes, because the parties clearly intended to amend the agreement even though the way they modified the contract does not comply with the written amendment provision. c. Yes. This is a valid way to execute a written amendment. d. No, because they did not attach a rider.

c. Yes. This is a valid way to execute a written amendment.

An example of true impossibility is: a. strict performance. b. failure of condition. c. illegality. d. material breach.

c. illegality.

On Monday night, Louise is talking on her cell phone with Bill. "I'm desperate for a manager in my store," says Louise. "I'll pay you $45,000 per year, if you can start tomorrow morning. What do you say?" "It's a deal," says Bill. "I can start tomorrow at 8 a.m. I'll take $45,000, and I also want 10 percent of any profits you make above last year's." Just then Bill loses his cell phone signal. The next morning he shows up at the store, but Louise refuses to hire him. Bill sues. Bill will: a. win, because there was a valid offer and acceptance. b. win, based on promissory estoppel. c. lose, because he rejected the offer. d. lose, because the agreement was not put in writing. e. lose, because Louise revoked the offer.

c. lose, because he rejected the offer.

Deborah, a lawyer for a minor-league hockey team, is negotiating a contract between the team and its new practice stadium. The contract, now in its fourth draft, addresses all of Deborah's concerns and incorporates all of the changes she wanted. She is ready to sign the agreement, but she wants to be sure that any future conversations she has with the stadium lawyers are not considered additional provisions to the contract. What should Deborah do? a. She does not have to do anything. There is no chance that a conversation could be considered an additional provision. b. Call the stadium's lawyer and request that they both act in good faith. c. Add a clause stating that disputes must be settled in arbitration. d. Add an integration clause to the contract.

d. Add an integration clause to the contract.

Which of the following amounts to an offer? a. Ed says to Carmen, "I offer to sell you my pen for $1." b. Ed says to Carmen, "I'll sell you my pen for $1." c. Ed writes, "I'll sell you my pen for $1," and gives the note to Carmen. d. All of these

d. All of these

Bob, a mechanic, claims that Cathy owes him $1,500 on a repair job. Bob wants to assign his claim to Hardknuckle Bank. The likeliest reason that Bob wants to do this is: a. Cathy also owes Hardknuckle Bank money. b. Hardknuckle Bank owes Bob money on a consumer claim. c. Hardknuckle Bank owes Bob money on a repair job. d. Bob owes Hardknuckle Bank money. e. Bob and Cathy are close friends.

d. Bob owes Hardknuckle Bank money.

Able orally agreed to pay Carr $800 to restore Able's antique car within 18 months, even though it was possible for him to complete the restoration in 10 months. The agreement is: a. Unenforceable because it covers a time period in excess of one year. b. Unenforceable because it covers services with a value in excess of $500. c. Enforceable because personal service contracts are exempt from the Statute of Frauds. d. Enforceable because the work could be completed within one year.

d. Enforceable because the work could be completed within one year.

Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit? a. Melnick will win because the deal was not supported by consideration. b. Melnick will win because his promise was illusory. c. Gintzler will win because the foundation was defective. d. Gintzler will win because he gave consideration.

d. Gintzler will win because he gave consideration.

Jacobi is visiting Sheila at her apartment while she is redecorating, and Sheila asks him if he would like to buy her two sofas that she is replacing. Sheila tells Jacobi that the sofas are in great condition and are the most comfortable she has ever had. She acknowledges that some of the fabric on the sofas is slightly worn but says that is their only issue. Jacobi buys the sofas on the spot, but once they are back at his house he finds that one of them is infested with bed bugs. Jacobi has to throw out the infested sofa and pay a special exterminator to come and get rid of the insects. Jacobi sues Sheila. Assume their jurisdiction follows the majority approach. How will the court rule? a. Sheila is not liable because her statements were mere puffery. b. This is fraud because both sofas were infested with bedbugs, and Jacobi relied on Sheila's statements about their good condition. c. Sheila is not liable because Jacobi did not investigate her statements about the sofas. d. If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages.

d. If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages.

Chef Jacquie is scheduled to teach a cooking class to three students. The class tuition is $1,100 per student. In the class, each student cooks a French meal under Jacquie's expert supervision and receives a cookbook (worth $30) and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the class that she will be unable to attend and requests a refund. Jacquie denies the refund and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues that it should be covered by the common law. Who is right? a. Tory, because everyone in the class receives a cookbook, pan, and food. b. Tory, because the cost of the class was more than $500. c. Jacquie, because the agreement was a bilateral contract. d. Jacquie, because the class is primarily a service.

d. Jacquie, because the class is primarily a service.

Mindy sends Luciano a note signed by Mindy that reads, "This is in acknowledgement of our agreement. I will buy 5 ornate box turtles from you on September 25." Luciano never responds. Can Mindy or Luciano, both non-merchants, enforce this agreement? a. Neither party can enforce this agreement because the writing does not specify a price. b. Both Mindy and Luciano can enforce the contract because there is a specific writing that conveys the parties' intent to be bound. c. Mindy may enforce the contract, but not Luciano. d. Luciano may enforce the contract, but not Mindy.

d. Luciano may enforce the contract, but not Mindy.

While staying overnight at Lily's house, Martin indicates that he would like to buy her car. Lily says she'll think it over. The next day Martin finds a note on the kitchen counter from Lily that reads, "I might be able to sell the car for about $22,000." Martin writes her a check for $22,000, takes the car keys off the hook by the front door and drives off in the car. Have Lily and Martin formed a binding contract? a. No, Lily's note was an offer, but Martin did not properly accept. b. Yes, Lily's note was a unilateral offer that Martin accepted when he left her a check. c. Yes, this is a binding contract. d. No, Lily's note was an invitation to bargain, not an offer.

d. No, Lily's note was an invitation to bargain, not an offer.

Norv and Wanda agree verbally that Wanda will buy Norv's house, and that Norv will also sell her his living room furniture for $1,000. They agree on a total price, and that the deal will close in 30 days. Norv prepares his house for Wanda, taking out all his possessions, and leaving the living room furniture. Two weeks later, Wanda tells Norv she does not want to go through with the deal. Can Norv enforce his agreement with Wanda? a. Norv will be able to enforce the deal because his actions are partial performance of the deal. b. Norv can enforce the deal for the furniture but not for the house. c. Norv will be able to enforce the deal because his actions are full performance of the deal. d. Norv cannot enforce the deal because it was not in writing.

d. Norv cannot enforce the deal because it was not in writing.

Olivia agrees that she will bring Desiree a cherry pie every Monday for one month in exchange for $15 per week. Olivia delivers a pie to Desiree for four weeks, and Desiree pays her each time. Olivia continues to deliver Desiree pies every Monday, and Desiree continues to pay for another five weeks. On the tenth week, Olivia brings a pie and Desiree refuses to pay. Olivia sues for payment. What will result? a. Desiree will win. Olivia assumed the risk of not getting paid when she continued to bring pies beyond than the month-long contract. b. Desiree will win because the contract was not express. c. Desiree will win because the contract was voidable by either party. d. Olivia will win. The court will rule that they had an implied contract.

d. Olivia will win. The court will rule that they had an implied contract.

PillPharm is negotiating a deal with Happy Valley Health (HVH) for the sale of PillPharm's latest health supplement. PillPharm would like to package its supplements in bottles produced by Frank, but Frank says he will not enter into a contract with PillPharm until the HVH contract is finalized. HVH has sent PillPharm a letter of intent, but Frank thinks it is too vague and refuses to enter into an agreement with PillPharm. What should PillPharm do? a. Ask HVH for a less ambiguous letter of intent. b. Sue Frank because he is acting in bad faith. c. Tell Frank that it has a contract with HVH. d. Send HVH its own letter of intent stating that they do have a binding agreement.

d. Send HVH its own letter of intent stating that they do have a binding agreement.

For the past seven years, Sommerset Storage, Inc. has hired Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbatten then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses, and Mountbatten sues. What will result? a. The court will rely on promissory estoppel, and Mountbatten will win. b. The court will apply a quasi-contract, and Mountbatten will win. c. The court will find that there is an implied contract, and Mountbatten will win. d. The court will uphold the original contract, and Mountbatten will lose.

d. The court will uphold the original contract, and Mountbatten will lose.

Halifax manufactures a toy aquarium that includes a gel designed to look like underwater scenes, which was manufactured by Agua Corporation. When Halifax stopped ordering gel from Agua due to poor sales of the aquarium, the companies discussed changing the gel's formula. Although it did not receive an order from Halifax, Agua sent an order acknowledgment for 9.5 million packets to Halifax the next week, who made no objection to it. Do Agua and Halifax have an enforceable agreement for the 9.5 million gel packets? a. No, because Halifax, as the buyer, has the right to reject a seller's goods at any time. b. No, because there was no written agreement between Halifax and Agua. c. Yes, once Halifax discussed modifying the product with Agua, they had an implied duty to purchase the customized product. d. Yes, because Halifax and Agua are merchants, and Halifax failed to object to the confirmation within 10 days.

d. Yes, because Halifax and Agua are merchants, and Halifax failed to object to the confirmation within 10 days.

The Tufte family leased a 260-acre farm from the Travelers, Inc. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes' house on March 30 and stated that they had until April 14 to accept. On April 13, the Tuftes signed and mailed their acceptance, which Travelers received on April 19. Travelers claimed there was no lease and attempted to evict the Tuftes from the farm. May the Tuftes stay? a. No. Travelers will win because of the mirror image rule. b. No. The Tufte family must leave because the Travelers' offer expired before Travelers received the Tuftes' acceptance. c. Yes, because the Tuftes intended to stay, and that is all that is necessary. d. Yes, because under the mailbox rule, an acceptance is generally effective when mailed.

d. Yes, because under the mailbox rule, an acceptance is generally effective when mailed.

Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get out of the contract. Samuel argues that because Riley is a minor, the contract is void. If Riley wants to enforce the contract, will he be able to? a. No, the contract is void because Riley is a minor. b. Yes, Riley can take the $11,000, and he has no legal obligation to give Samuel the car. c. No, the contract is voidable, and either party can cancel it. d. Yes, the contract is voidable, and only Riley can cancel it.

d. Yes, the contract is voidable, and only Riley can cancel it.

The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red Owl Stores, told them that for $18,000 Red Owl would build a store and fully stock it for them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl was to build the store. Lukowitz then told the Hoffmans that the price had gone up to $26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans sued. The court determined that there was no contract. Can the Hoffmans recover any money? a. Yes. They can most likely recover damages based on judicial restraint. b. Yes. They can most likely recover damages based on quasi-contract. c. No. Based on the facts, there is no contract. d. Yes. They can most likely recover damages based on promissory estoppel.

d. Yes. They can most likely recover damages based on promissory estoppel.

Michael and Scarlett cannot agree on the price he will pay her to manage his hotels in the third year of their contract. They agree to a provision stating that the price will be "reasonable." This provision is _______. Parties should never include such a provision in a contract unless ____________. a. ambiguous; they are sure they will be able to reach an agreement later b. vague; they are sure they will be able to reach an agreement later c. ambiguous; they would not mind if the other side's interpretation prevails in litigation d. vague; they would not mind if the other side's interpretation prevails in litigation

d. vague; they would not mind if the other side's interpretation prevails in litigation

The following list provides reasons why a party would strongly consider putting a contract in writing. Which of these reasons is least important? a. The Statute of Frauds requires it. b. The deal is crucial to your life or the life of your business. c. The terms are complex. d. The parties do not have an ongoing relationship. e. The parties reside in different jurisdictions.

e. The parties reside in different jurisdictions.

Manufacturer sells a brand-new, solar-powered refrigerator. Because the technology is new, Manufacturer sells the product "as is." Plaintiff later sues Manufacturer for breach of warranty and wins. Plaintiff is probably a: a. distributor with no understanding of legal terminology. b. retailer who had previously relied on Manufacturer. c. retailer who had never done business before with Manufacturer. d. retailer who failed to notice the "as is" label. e. consumer.

e. consumer

Jody is obligated under a contract to deliver 100,000 plastic bottles to a spring water company. Jody's supplier has just gone bankrupt; any other suppliers will charge her more than she expected to pay. This is: a. consequential damages. b. impossibility. c. expectation interest. d. substantial performance. e. legally irrelevant.

e. legally irrelevant.