BUS115 Module Seven Homework

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 be able to recover $2,000 in restitution.

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.

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.

Omkara, a furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A day before Gnome is going to ship the foam to Omkara, a flood destroys its entire inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that FirmFoam can supply her with an identical shipment for $65,000. This increase in price will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara wants to get out of both contracts. Can she?

a. Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform.

Silas has agreed to dig five wells on Noreen's property over the next month, working each weekday. One Friday, after Silas has completed three wells for Noreen, he informs Noreen that on Monday he is going to start a project digging sixty wells for Romeo and that job will take him about a year. What does this mean for Noreen?

a. Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract.

Envirotex owes Simla Inc. $1,200 for services rendered. An Envirotex corporate officer calls Simla's Chief Operating Officer (COO) and offers to settle the debt by assigning to Simla the right to payment of a $1,500 debt that Riann Corp. owes to Envirotex for its purchase of Envirotex merchandise. Simla's COO agrees to the deal and cancels Envirotex's debt. Riann never pays anyone, and Simla sues Riann. What will result?

a. The assignment is not valid because it was not in writing.

In Unite Here Local 30 v. California Department of Parks and Recreation, the California Court of Appeals decided whether Bridgette Browning and the members of Unite Here Local 30 were third-party beneficiaries of the concession contract between the California Department of Parks and Recreation (DPR) and Delaware North Companies (DNC). The court held that:

a. neither Bridgette Browning nor Local 30 were a third-party beneficiaries because the concession contract did not intend to benefit either of them.

Monty buys a big screen television from Martha and agrees to pay her back with interest over the next three years. A year later, Monty decides to stop watching TV and gives the TV to his friend Bo, assigning all his rights and delegating all his duties to Bo. Bo pays Martha for a few months and then stops, so she sues both Monty and Bo. Monty will be able to avoid liability if he can prove:

a. that Martha granted a novation.

John sold a Vermont lakeshore lot for $115,000 to Deborah who intended to build a house on the property. John indicated the land was suitable for the project, but Deborah soon learned that a wetland protection law prevented building near the lake. Deborah sued, seeking rescission of the contract. What is the likely outcome?

b. Deborah will likely win restitution damages.

Harlowe purchases a watercolor painting by a prominent local artist and a RecumbentSloth brand recliner from a yard sale. She pays cash for both items, and the seller promises to deliver them next week. Two days later the seller calls Harlowe and says he no longer wants to sell the items and sends Harlowe back her money. If Harlowe sues, will she be able to get the items she bought?

b. Harlowe will be able to get the painting but not the chair.

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.

b. Krug wins because of true impossibility.

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?

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

Thirty-five members of the Ortiz extended family were spread across three states—Illinois, New York and Florida—and they rarely were able to get everyone together. For Thanksgiving 2018, Mary Elizabeth Ortiz decided to surprise her family by booking a mountain retreat for the entire clan. She especially wanted to celebrate her uncle's return from overseas military service. On September 15, 2018, Mary rented a spectacular lodge in the Tennessee Smoky Mountains with over 20 bedrooms and an incredible view, paying in advance the full $2,500 per night fee for 3 evenings, but not purchasing travel insurance. The lodge had the following cancellation policy: "A sixty (60) day notice is required for cancellation. Cancellations that are made within 60 days of the arrival date, for any reason, forfeit the full advance payment and reservation deposit. You are advised to purchase travel insurance separately if cancellation costs are a concern." The rental contract also stated that the only exception would be for "acts of God, such as fires or earthquakes." One week before Thanksgiving, Mary's uncle had a heart attack and was hospitalized. The next day, November 16, 2018, Mary cancelled the reservation, and requested a full refund, which the lodge refused to provide. Does Mary have a claim for the return of her $7,500?

b. No, Mary has no theory that supports her claim.

Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports car after Ted replaces the engine and fixes the transmission. The contract contains a "time is of the essence" clause, requiring Ted to have the car ready for the sale by February 13. On February 12, Ted calls Aisha and says he needs two more days to complete the repairs. Aisha declines and buys another car. Did Aisha breach the contract?

b. No, because the contract contained a "time is of the essence" clause.

Anna worries that her brother Nick does not have good health insurance, so she writes a contract stating that if he mows her lawn on the last Saturday of every month she will buy him an expensive insurance policy that he could not otherwise afford "for at least the next six months, and longer if necessary." The next week, Nick gets a great job at an investment bank, which provides him health insurance coverage. Anna congratulates Nick and revokes the deal. The breach of contract infuriates Nick, who sues his sister. What will result?

b. The court will award Nick nominal damages.

Raven works as a senior computer programmer for a national engineering firm. Periodically the firm "rents" Raven out to other companies to solve their programming problems at the cost of $10,000 per day plus expenses. Raven has garnered an international reputation as a human "supercomputer" and her schedule is booked for nearly six months into the future. When multiple companies ask to schedule Raven for the same week, the firm delegates one of the jobs to another programmer, MinJoo. While MinJoo is also a very capable programmer, it generally takes her 3-4 days to complete a project that would only take Raven 1 day to finish. The firm sends MinJoo to the requesting company in Denmark, and the problem is resolved in 3 days at a total cost of $30,000, plus expenses. When the company discovers that MinJoo is not the legendary "supercomputer" they expected, they bring a claim against the firm. Does the company have a valid cause of action in this case?

b. Yes, because the company expected Raven.

Pamela was injured in an auto accident by an uninsured driver. Pamela filed a claim with her insurer, American Mutual, for $2,000 under her "uninsured motorist" coverage. American Mutual told her that if she sought that money, her premiums would go "sky high," so Pamela dropped the claim. Later, after speaking with an attorney, Pamela sued. What claim was her attorney likely to make?

c. A claim for punitive damages.

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:

c. A condition precedent.

After his niece's college graduation, Dalton gives her a card that reads, "Congratulations to my dear Diana! To start you on your road to success, I am assigning you my fixed annuity payments from Hedgehog Bank. Love, Uncle Dalton." Dalton's tax advisor is not pleased to hear this, so Dalton calls Diana to revoke the assignment. Diana sues. What is the most likely result?

c. Dalton's assignment was in writing, so it cannot be revoked.

A century and a half ago, an English judge stated: "All painters do not paint portraits like Sir Joshua Reynolds, nor landscapes like Claude Lorraine, nor do all writers write dramas like Shakespeare or fiction like Dickens. Rare genius and extraordinary skill are not transferable." What legal doctrine is the judge describing?

c. Delegation of duties: substantial interest in personal performance

Hector is outraged by the Ellsworth Elementary School charity auction when the school invalidates his winning bid on a trip to Paris, refunds his money, and refuses to give him the plane tickets he won. He suffers no real harm because a group of sympathetic parents pool their money and buy him a comparable trip, but the breach by the school still stings, so he sues. What result is most likely?

c. Hector will win nominal damages.

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?

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

Damon contracts with Steve Redmont of Redmont Roofers, Inc. to replace the roof on his 1850 Greek Revival mansion in Ohio by April 15. The project involves cutting and shaping intricate trim pieces all along the roofline, as well as replacing the slate shingles and underlying wood support system. Steve begins to get frustrated on April 2 because the project is taking too long, so at about the halfway point, he calls Damon and says he won't finish the project. Damon sues Steve in court and asks specific performance. Will the court likely grant this remedy to Damon?

c. No, because specific performance is not an appropriate.

Nationwide Discount Furniture hired Rampart Security to install a fire alarm in its warehouse that would notify Rampart and Nationwide in the event of a fire. Rampart failed to notify Nationwide when a fire did in fact break out. The fire spread next door and damaged a building owned by Gasket Materials Corp. Gasket sued Rampart for breach of contract, and Rampart moved for summary judgment. How will the court likely rule?

c. Rampart's motion for summary judgment is granted because Gasket is an incidental beneficiary.

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?

c. 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.

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?

c. Restitution

Over spring break, you go to Florida and accidentally spend too much on your checking account's debit card. When you get back to school, you are shocked to see you owe your bank $220, which you pay back immediately. However, you have not even had time to recover from your sunburn before the bank informs you that, pursuant to the liquidated damages clause in the contract you signed when you opened the account, you are being charged a $55 "overdraft fee" for every transaction you made on your debit card after your balance was $0. Unfortunately, you made nine such transactions, which means you owe the bank an additional $495 in fees (9 x $55 = $495). What is your best argument against the overdraft fees?

c. The fee is too high, and the bank is simply imposing a penalty.

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?

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

Alais is a clothing fashion designer known for her French style of elaborate heirloom smocking combined with industrial elements. Planning for an upcoming show in Paris on September 26, she orders on September 10 300 yards of a custom reflective material from Rutherford Industries for her seamstresses to hand smock. The supplier promises to deliver the material before September 20, so Alais will have time for her staff to complete the sewing. When the cloth doesn't arrive until the evening of September 21, Alais files a claim for breach against Rutherford. Who prevails?

d. Alais prevails because the breach was material.

Franklin hires Angela to paint his portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a masterful job. Franklin disagrees. He thinks the painting makes him look like a toad. Franklin refuses to pay, and Angela sues Franklin. Who wins and why?

d. Angela loses because this is a personal satisfaction contract.

May pays Charlie to construct a skating rink on her property. She soon changes her mind and, in writing, assigns her right to have the rink built to Jane, whose sons love to play hockey. Neither May nor Jane inform Charlie of the assignment. May goes on a long trip and discovers a skating rink in her backyard when she returns home. Jane sues Charlie and May. What result?

d. Charlie has no further obligations under the contract

Ike is building a water park in Charleston, South Carolina, with attractions that are larger and more extravagant than anything in the area. Ike cannot afford delays in construction and is nervous about his contractor's ability to finish the project on time. What can Ike do protect himself?

d. Include a liquidated damages clause in the contract.

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?

d. 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.

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?

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

Romanita is offered $500 to climb to the top of the academic center, the tallest building on the university campus. Before climbing the 80 foot tower, Romanita purchased ropes, boots and a safety harness, as well as other equipment, at a cost of close to $150. After two weeks of preparation and encouragement by the offeror, Romanita arrives at the tower. However, just before her feet leave the ground on her ascent up the tower, the offeror withdrew the offer, citing safety concerns. Does Romanita have a claim for the $500?

d. No, but she has a potential claim for the cost of the climbing equipment.

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?

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

Evans built a house for Sandra, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the "great room" cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze. Evans wanted the money Sandra promised for the job, but Sandra refused to pay. Who wins?

d. Sandra wins because Evans did not substantially perform.

Cozette hires Baldrick to cook dinner for her family three nights per week for an entire year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate sues Cozette for Baldrick's salary for the rest of the year. What result?

d. The agreement will be discharged due to true impossibility.

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?

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