BLAW Exam 2 Questions

On Monday, Billy receives an offer from Andrew to buy Billy's house for $500,000. On Tuesday, Billy mails Andrew a reply, "I'll sell it to you for $600,000, and not a penny less." On Wednesday, Billy reconsiders so he mails Andrew the following note: "I accept your offer for $500,000, the house is yours." On Thursday, Andrew receives Billy's first note. On Friday, Andrew receives Billy's second note. What result? a. Billy and Andrew have a contract for $500,000. b. Billy and Andrew have a contract for $600,000. c. Billy and Andrew do not have a contract. d. Billy and Andrew have a contract for the fair market value of the house.

a. Billy and Andrew have a contract for $500,000.

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 an 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. Interactive wins because the seven steps were only an implied, not express, condition to its employment contract with Foley. d. Foley loses because he and Interactive had a unilateral, express employment contract that incorporated the seven steps.

a. Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps.

The town of Sanford, Maine, decided to auction off a plot of land owned by the town. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arlene mailed in a bid that turned out to be the highest of all the bids the town received. When the town refused to sell them the lot, they sued. Who will win? a. It will depend on whether the auction was with or without a reserve, or minimum price. b. Arthur and Arlene will win. c. The town of Sanford will win. d. Arthur and Arlene will win but will have to pay a higher price.

a. It will depend on whether the auction was with or without a reserve, or minimum price.

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

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

On August 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she can only accept the offer by mailing the money to arrive by September 2 at his university mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox by August 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment) until September 4th. Did Clarissa accept Calvin's offer? a. No, because Clarissa didn't meet all the requirements of the offer. b. No, because Calvin did not actually receive the money until September 4th. c. Yes, because the money arrived at Calvin's mailbox before September 2nd. d. Yes, because Clarissa paid Calvin's asking price for the laptop.

a. No, because Clarissa didn't meet all the requirements of the offer.

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 Simon's mother checked the "YES" box on the invitation, creating a contract obligation. c. Yes, because the classmate has a case for quasi-contract. d. No, because Simon was ill and that is a reasonable excuse to not attend.

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

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. Voidable by Yasmine b. Valid c. Unenforceable d. Voidable by Stewart

a. Voidable by Yasmine

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 promissory estoppel. b. No. Based on the facts, there is no contract. c. Yes. They can most likely recover damages based on judicial restraint. d. Yes. They can most likely recover damages based on quasi-contract.

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

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 Bespoke Tourism but not with Shirts-A-Lot. b. Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism. c. Yes, Polyquan has a contract with both companies. d. No, Polyquan does not have a contract with either company.

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

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. 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. c. No, CMPC is not obligated to pay because this was a bilateral contract, and MSI did not promise to perform. d. 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.

TuffGrip ran an advertisement for its brake pads in several national automotive industry journals. The ad listed a range of prices for the brake pads and a few technical specifications. At the bottom, the ad stated that TuffGrip had no liability in the event of a malfunction. Three large mechanic chains purchased the brake pads after seeing the ad, and signed standard TuffGrip purchase orders. Many of the brake pads that these mechanic chains installed in customers' cars failed, causing severe injuries to drivers who could not stop their cars. TuffGrip claimed it had no liability to the mechanic chains. Is TuffGrip correct? a. Yes, TuffGrip is not liable because the limitation of liability was a term clearly stated in the ad. b. Yes, TuffGrip is not liable because they sold the brake pads to other merchants. c. No, TuffGrip is liable unless the purchase orders also included the limitation of liability. d. No, TuffGrip is liable because the chains that purchased the brake pads had no notice that TuffGrip had disclaimed liability.

c. No, TuffGrip is liable unless the purchase orders also included the limitation of liability.

Oliver found some cozy-looking winter gloves for a great price in a catalog. He decided to purchase a pair for himself and additional pairs for every member of his extended family. He mailed in the order form, along with a check. Two weeks later the catalog company informed Oliver that it had run out of gloves and would not charge him. Oliver sues. What will result? a. Oliver will lose because his order was a counteroffer so there was no contract. b. Oliver will win because the catalog was fraudulent and misleading. c. Oliver will lose as long as the company can show it was acting in good faith. d. Oliver will win because he accepted the company's offer as soon as he mailed the order form.

c. Oliver will lose as long as the company can show it was acting in good faith.

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 because the contract was not express. b. Desiree will win. Olivia assumed the risk of not getting paid when she continued to bring pies beyond than the month-long contract. c. Olivia will win. The court will rule that they had an implied contract. d. Desiree will win because the contract was voidable by either party.

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

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 find that there is an implied contract, and Mountbatten will win. b. The court will rely on promissory estoppel, and Mountbatten will win. c. The court will uphold the original contract, and Mountbatten will lose. d. The court will apply a quasi-contract, and Mountbatten will win.

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

Mariposa Middle School is in need of more sports equipment, so a school administrator contacts Kiko's Sporting Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its order. Kiko tells the administrator she can order whenever she is ready and still enjoy the discount. Kiko faxes the administrator a handwritten note that reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15% discount off the final sales price of their purchase. Offer good for one use only. Offer open for the next 5 months. Signed, Kiko" The administrator tries to use the discount four months later but Kiko says she has revoked the offer. What will result? a. The offer is governed by the UCC and will be enforced because it is signed and in writing. b. The offer will be enforced because the terms are definite. c. The offer will not be enforced because the offer is open too long. d. The offer will not be enforced because the administrator is not a merchant.

c. The offer will not be enforced because the offer is open too long.

he 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. Yes, because the Tuftes intended to stay, and that is all that is necessary. b. No. The Tufte family must leave because the Travelers' offer expired before Travelers received the Tuftes' acceptance. c. Yes, because under the mailbox rule, an acceptance is generally effective when mailed. d. No. Travelers will win because of the mirror image rule.

c. 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 voidable, and either party can cancel it. b. Yes, Riley can take the $11,000, and he has no legal obligation to give Samuel the car. c. Yes, the contract is voidable, and only Riley can cancel it. d. No, the contract is void because Riley is a minor.

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

You are considering joining an online club. Before continuing to the membership page, the site presents you with hundreds of lines of dense legalistic text and asks you to agree to them. You click the "I agree" box. Will you be bound by the terms? a. Yes, but only if you read all of terms. b. No, unless you were actually aware of the contents of all of the terms. c. Yes, even if you did not read all of the terms. d. It depends on what state you are in.

d. It depends on what state you are in.

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 the cost of the class was more than $500. b. Jacquie, because the agreement was a bilateral contract. c. Tory, because everyone in the class receives a cookbook, pan, and food. d. Jacquie, because the class is primarily a service.

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

A national beverage company ran a promotion where consumers could collect "points" by purchasing the company's products, then redeem the accumulated points for items such as baseball caps and t-shirts. One television ad showed a teenager landing a $33.8 million-dollar aircraft in his schoolyard while "Harrier Jet: 7,000,000 points" flashed across the screen. After the commercial aired, John gathered the 7 million points and asked for a Harrier jet, yet the company refused to comply. Two days later the points for the jet had changed in the ad from 7,000,000 to 700,000,000. If John sues for the airplane, what is the probable outcome? a. John wins, because he accepted the company's offer by gathering 7,000,000 points. b. John loses, because an advertisement is never an offer. c. John wins, because the advertisement showed specific terms, and anyone could accept the offer. d. John loses, because no reasonable person would believe the advertisement was a serious offer.

d. John loses, because no reasonable person would believe the advertisement was a serious offer.

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.

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 $45, the average of the two prices. b. Yes. Mel must pay $50. c. Yes. Mel must pay $40. d. No. Mel made a counteroffer, which Jackie rejected.

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

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 the UCC, and Mary will win. b. The court will apply the UCC, and Mary will lose. c. The court will apply common law, and Mary will win. d. The court will apply common law, and Mary will lose.

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

Xuechen graduated from culinary school at the top of her class, and signed an employment contract to work as a chef for one of Chicago's best restaurants for a period of three years. Additionally, Xuechen signed a non-competition agreement that stated she agreed not work as a chef for any other restaurant in the Chicago city area for a period of five years. Shortly after she began working, Xuechen left her employer to work as a manager at another Chicago restaurant. Has Xuechen breached either of the contracts she signed? a. Yes, both contracts have been breached. b. No, the employment contract has not been breached, but the non-competition agreement has been breached. c. No, contracts have not been breached. d. Yes, the employment contract has been breached, but the non-competition agreement has not been breached

d. Yes, the employment contract has been breached, but the non-competition agreement has not been breached