Blaw exam 2 hypo questions

Owen offers to sell his motorcycle to Julian for $5,000. After he makes the offer, Owen has second thoughts. Owen can revoke the offer to sell his motorcycle to Julian: Even after Julian has accepted but beforeJulian has delivered the money to Owen As long as Julian has not yet accepted the offer At no time, because offers to sell merchandise are irrevocable Anytime, whether or not Julian has accepted the offer

As long as Julian has not yet accepted the offer

Huseyin and Ashish are negotiating the details of a new garage that Ashish plans to build on Huseyin's property. They agree on the building specs, the delivery date, and a price of $25,000. Ashish draws up the contract and sends it to Huseyin to sign. Huseyin reviews the contract and notices the price is listed as $2,500 instead of $25,000. Elated at the unbelievably low price, Huseyin quickly signs the contract and sends it back to Ashish, who signs it as well. If Ashish later tries to rescind the contract due to the mistaken price: Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of. Ashish will be successful, because the parties made a mutual mistake. Ashish will not be successful, because a unilateral mistake is not a basis to rescind a contract.

Ashish will be successful, because it is a mathematical mistake that Huseyin was aware of

How can an "offeror" revoke or an offeree "reject" an offer?

Expressly and Impliedly

Quon decides to sell his antique roadster, so he places an ad on Craigslist. He lists the roadster as a 1957 Mercedes Benz 300SL Roadster, describes it as in good working condition, and states that no reasonable price will be refused. Fern responds to the ad and offers to pay $25,000 to Quon for the car, which Quon agrees to. In this scenario, who is the offeror? Fern is the offeror. Neither party is the offeror because there is no agreement to specific terms. Quon was the original offeror, but Fern becomes the offeror when she offers $25,000. Quon is the offeror.

Fern is the offeror

Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded: by either Marie or Molly. if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract. under no circumstances, because Marie was not adjudicated insane before she signed the contract. only if Marie's children have Marie committed to a psychiatric care facility

If Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract

What happens if offeror SPECIFIED a particular mode/method of acceptance, but the offeree sent acceptance in a different manner?

If the mode/method does NOT accomplish the same purpose as the method specified in the offer, offeror may treat acceptance as INVALID

Midwest Life Insurance sells a life insurance policy to Thiago. Under the terms of the contract between Thiago and Midwest Life, Thiago will pay $75 per month for the policy, and, upon Thiago's death, Midwest Life will pay $100,000 to Laurelei. Four years later, Thiago dies, and Midwest refuses to pay under the terms of the policy. The party entitled to sue Midwest for its failure to honor the terms of the contract is: Laurelei, because she is an incidental beneficiary Laurelei, because she is a creditor beneficiary Laurelei, because she is a donee beneficiary Thiago's executor, because the only party to the contract with Midwest is Thiago, and Thiago is deceased

Laurelei, because she is a donee beneficiary

Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract: Matilda may rescind the contract on the grounds of undue influence. Matilda may not rescind the contract because it has all the elements of a valid contract. Matilda may rescind the contract on the grounds of unconscionability. Matilda may rescind the contract on the grounds that she signed the contract under duress.

Matilda may rescind the contract on the grounds that she signed the contract under durress

Kara's car is damaged in an accident caused by Raoul's negligence. Raoul offers to give Kara $3000 IF she will release him from all further liability. Kara accepts the $3000 and signs a release, but later learns that her repairs will cost $4200. In most states, can Kara collect the additional $1200 from Raoul?

No

Korbyn enters into a contract with Peyton to sell Peyton a 1956 roadster (a vehicle). The contract has a condition precedent that the roadster will pass inspection by an independent appraiser, verifying that the roadster contains all original parts and is in good working order. This contract provision means that: Peyton is not required to perform under the contract until the appraisal is complete and the roadster passes inspection Peyton must pay for the roadster at the time of contracting, and Korbyn will then order the appraisal Peyton must have the appraisal completed within thirty days of performing the contract and provide the results to Korbyn if the appraisal is not satisfactory to both parties, the contract price will be adjusted accordingly

Peyton is not required to perform under the contract until the appraisal is complete and roadster passes inspection

Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by: Smitz or Ruby, because Ruby is a minor, and Ruby may keep the car. Ruby, because she is a minor, but Ruby must return the car. Smitz, because Ruby is a minor, but Smitz must allow Ruby to keep the car. Ruby, because she is a minor, and Ruby may keep the car.

Ruby, because she is a minor, but Ruby must return the car

A customer at a Six Flags amusement park nearly drowned on a water ride. Six Flags amusement park nearly drowned on a water ride. Six Flags believed the ride had a design defect and wanted the ride believed the ride had a design defect and wanted the ride manufacturer's insurance company to defend Six Flags in manufacturer's insurance company to defend Six Flags in court against the customer's personal injury suit. Although Six court against the customer's personal injury suit. Although Six Flags and the ride manufacturer had never entered a formal Flags and the ride manufacturer had never entered a formal contract for ride construction, they HAD engaged in contract for ride construction, they HAD engaged in preliminary negotiations, faxed ride specifications, began preliminary negotiations, faxed ride specifications, began construction, and hand-wrote notes on the fax. WHAT DID THE COURT HOLD?

The court held that evidence showed parties' INTENT to be bound by their initial agreements

What if the offeree's response to the offeror's offer CHANGES A MATERIAL TERM of the original offer?

The offeree's change will be deemed a counter-offer, NOT an acceptance

Sarah is shopping at Sylvia's thrift store, and notices that the inside of the store needs repainting. Sarah offers to paint the store for $400. Sylvia does not respond to Sarah's offer. Later that day, Sarah returns to the store with painting supplies in hand and begins painting the store. Sylvia watches Sarah painting. When Sarah is finished, she demands payment of $400 from Sylvia. Will Sylvia have to pay Sarah for painting the store? Yes, Sylvia will have to pay Sarah for painting the store because silence is always an acceptance of an offer. No, Sylvia will not have to pay Sarah for painting the store because Sarah did not verbally agree to the contract. Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to the contract. No, Sylvia will not have to pay Sarah for painting the store because silence can never be an acceptance of an offer.

Yes, Sylvia will have to pay Sarah for painting the store, even though she did not verbally agree to this contract

Nadia needs help running her bakery. Nadia contacts her friend Zoey, who has baking experience but lives in another state, and offers Zoey a job. Nadia orally promises Zoey that she will employ Zoey for at least two years. Zoey quits her job in the other state, moves her family, and begins to work for Nadia. After three months, Nadia terminates Zoey's employment. Zoey sues Nadia, claiming they had a contract for two years. If Nadia defends the lawsuit by claiming the contract could not be enforced because it violates the statute of frauds, the court will likely hold in favor of: Zoey, under the theory of promissory estoppel. Zoey, because the agreement violated the statute of frauds. Nadia, because enforcement of the promise is necessary to avoid injustice. Nadia, under the theory of promissory estoppel.

Zoey, under the theory of promissory estoppel

A third party that is considered an incidental beneficiary to a contract _______ sue the promisor for breach of contract

cannot

In the preexisiting duty rule, a person already bound by a contract to perform a certain duty _____ have that duty act as consideration for a second contract

cannot

Mary offered to babysit for Ron's children for 2 hours at a rate a $10 per hour. Ron stated he wanted Mary to babysit for 2 hours, but would pay her $12 an hour. Ron's statement is an example of a

counteroffer

If an original offeror DOES accept the terms of the counteroffer, a valid contract _____ created

is

Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land: is enforceable because it complies with the statute of frauds. is enforceable, because there are witnesses to the deal. is not enforceable because of the theory of promissory estoppel. is not enforceable because it violates the statute of frauds.

is not enforceable because it violates the statute of frauds

The principle that one who is not a direct party to a particular contract normally does not have rights under that contract is known as _______

privity of contract

An exception to the doctrine of privity of contract arises when a contract is intended to benefit a ______ party

third

Alvin's Department Store agrees over the telephone to purchase $1,000 worth of blankets from Blanket Emporium. Blanket Emporium sends an invoice for the blankets before shipping them, and Alvin's Department Store refuses to go forward with the deal, saying their deal is not a valid contract. The oral agreement between Blanket Emporium and Alvin's Department Store for the purchase of $1,000 worth of blankets: does not violate the statute of frauds because it can be completed within one year. does not violate the statute of frauds, and is, therefore, enforceable. violates the statute of frauds, and is, therefore, unenforceable. does not violate the statute of frauds because it is not for the sale of real estate.

violates the statute of frauds, and is, therefore, unenforceable

A counteroffer is ______ of the original offer and _____ have to be accepted

a rejection, does not

A third party that is considered an intended beneficiary to a contract ____ sue the promisor for breach of contract

can

An offer _____ terminate automatically when the period of time specified in the offer has passed

can

Under the terms of a valid contract, Logan agrees to deliver fifty pounds of crab claws to Dominique by May 15. Dominique needs the crab claws for a wedding party that Dominique is catering on May 16, so time is of the essence of the contract. Logan contacts Dominique on May 15 and tells Dominique that the earliest Logan can deliver the crab claws is on May 17. Dominique cancels the order and quickly makes other arrangements for the wedding party she is catering. Logan then demands payment from Dominique for the full contract price, and Dominique refuses. If Logan sues Dominique for damages under the contract: Dominique will have to pay Logan the difference between what Logan was charging for the crab claws and what Dominique eventually paid Dominique will have to pay, but Logan must deliver the crab claws Dominique will have to pay or be in breach of contract Dominique will not have to pay because Logan breached the contract

Dominique will not have to pay because Logan breached the contract

Elvis agrees to provide guitar lessons to Angela's niece for three months for $600. Angela decides her niece really is not interested in guitar lessons, and assigns her rights under the contract to Jose, so Jose can use the lessons for his daughter. When Jose contacts Elvis to set up the first guitar lesson for his daughter: Elvis will be obligated to provide guitar lessons to both Jose's daughter and Angela's daughter Jose cannot enforce the contract against Elvis because the contract is for personal services. Elvis will be obligated to provide guitar lessons to Jose's daughter because this is a valid assignment Jose cannot enforce the contract against Elvis, because contracts are not assignable unless they contain a clause making them assignable

Jose cannot enforce the contract against Elvis because the contract is for personal services

Sam says "I plan to sell my insurance company for $500,000." John says he accepts and gives Sam a check for $500,000 (without Sam's saying anything else). Would a "reasonable person" believe a contract been formed? YES OR NO?

No It's an intent, not a valid offer

Tom offers to provide lawncare services to Giselle for $50 per mow from May through October. Giselle sends Tom an e-mail that states, "I accept, IF you send a written contract." Has Giselle accepted the contract?

No, Giselle has given a counteroffer

On Oct. 1, Max offered to sell Jonas 25 guitar lessons for $400. Max's offer stated Jonas must accept by written letter sent via FedEx 24-hour delivery. delivery. On Oct. 15, Jonas telephoned Max and left a phone message acceptance. To be safe, on Oct. 17 Jonas also sent a written acceptance letter via DHS 24-hour delivery, and Max received this written acceptance on Oct. 20. Assuming received this written acceptance on Oct. 20. Assuming Max would only accept a written letter, as of which date was the contract valid? Oct. 15 when Jonas telephoned Oct. 17 when Jonas mailed the DHS letter Oct. 20 when max RECEIVED the DHS letter Never, Jonas's phone call terminated max's offer

Oct. 20 when Max RECEIVED the DHS letter

The weekly Kroger advertisement states that five-pound chubs of ground chuck are available for eighty-nine cents per pound. Arlene sees the advertisement; she realizes that ground chuck has not been priced this low in quite some time, so she hurries to the store to purchase some. Arlene loads seven chubs of ground chuck in her shopping cart. When she goes to the checkout to pay, however, the cashier informs Arlene that the price in the advertisement is a typo and that the correct price is $1.89 per pound. Arlene insists that the store must honor the price listed in the advertisement, because it is an offer that she has just accepted. The cashier calls the store manager for a decision. The store manager will likely explain to Arlene: that the advertisement is a valid offer, and the store must honor the price in the advertisement. that the advertisement is a valid offer because it is in writing. that the advertisement is a valid offer because its terms are definite. that advertisements are not offers, but merely a request for offers.

That advertisements are not offers, but merely a request for offers

T/F: Most advertisements are treated as "invitations to negotiate" and, as such, are NOT considered "offers."

True

WHEN does revocation/rejection of an offer become effective?

Upon receipt

Dru is a contractor. He has submitted a bid to Candace for the construction of a pool, but he made a few mathematical errors when he totaled his estimated costs. Because of these errors, Dru's bid is about $75,000 lower than his actual estimated costs. If Candace accepts Dru's offer, can Dru later rescind the contract?

Yes

Seller promises to ship 1000 plastic cups. Buyer promises to pay $200 Does "consideration" exist to support a contract between buyer and seller?

Yes

Tom offers to provide lawncare services to Giselle for $50 per mow from May through October. Giselle sends Tom an e-mail that states, "I accept. Please send a written contract." Has Giselle accepted the contract?

Yes

Xin intends to sell her motor home for $17,500. She sends Devam an e-mail offering her motor home for sale, but she mistakenly types $15,700 as her price. (This is the first time Xin has supplied Devam with information on the sale price.) Devam reads Xin's e-mail and immediately accepts. Is Xin bound to the contract (is the contract enforceable)?

Yes

Landscape Supply agrees to provide Delta Lawn Service eight pallets of sod for the price of $260 per pallet. The agreement contains the following provision: "This Agreement may not be amended or modified except by an instrument in writing signed by the party to be charged with such amendment or modification." Delta decides it now needs 160 pallets of sod, and Landscape is willing to reduce the price to $255 per pallet because of the increased amount. Delta and Landscape can accomplish this change to the contract by: (HINT: Choose the best/most correct answer from the choices below): signing an amendment or rewriting the entire contract to include the changed provisions only crossing out the incorrect language and replacing it by hand with the correct terms or rewriting the entire contract to include the changed provisions signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions crossing out the incorrect language and replacing it by hand with the correct terms only

signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions

Milo is the owner of a sporting goods store that has only been open for three months. The holiday season is coming up, and Milo realizes that he will need extra help. Milo asks his friend Jess to help him out at the store. Milo and Jess agree that Jess will work during the months of November and December. However, because Milo is unsure how much help he will need and how much he will be able to pay, they agree to decide each week on the hours that Jess will work for the following week, and to decide the hourly rate after Jess has worked two weeks before she receives her first paycheck. Just before November 1, Jess takes a job at another store. If Milo tries to sue Jess for breach of contract, the court will probably decide: that the parties had no contract because the terms of the offer were not definite that the parties had a contract, and Jess breached the contract that the parties had no contract because the terms were not in writing that the parties had a contract, but the damages could not be ascertained because the hourly rate and number of hours had not been determined

that the parties had no contract because the terms of the offer were not definite

In determining whether a beneficiary is an intended or incidental beneficiary, the presence of one or more of the following factors strongly indicates that the third party is an intended beneficiary to the contract:

whether performance is rendered directly to the third party, or if the third party has a right to control the details of performance , or if the third party is expressly designated in the contract