Chapter 9: Contracts

What does consideration in a contract involve?

A promise that must be bargained for.

A phoned B and offered to sell him "my farm in New Hampshire for $100,000." B says, "I accept." A actually owns two farms in New Hampshire. He was referring to his 5-acre farm, whereas B was referring to his 10-acre farm. With regard to the agreement,

A valid contract has not been formed.

What is the term used when one party in a contract dies before the contract is completed?

A. Discharge

Delaney's Department Store had been trying for three years to collect $100 owed it by a customer. Finally the customer said, "Look, I'm broke. I can give you $50 right now and I'll wash the windows on the front of your store if you'll forget about the rest of it." Delaney's accountant, thinking that they would never see any money at all if they didn't accept this offer agreed to it. This is an example of

An accord and satisfaction

A transfer of rights is called an

Assignment

Wichelhaus (Buyer) purchased a shipment of Surat cotton from Raffles (Seller) "to arrive on Peerless from Bombay." Wichelhaus expected the goods to be shipped on the ship Peerless sailing from Bombay in October. Raffles expected to ship the goods on a different ship Peerless, which sailed from Bombay in December. When the cotton arrived two months later than expected, the buyer refused to take delivery. This situation illustrates which defense to the enforcement of a contract?

Bilateral or mutual mistake

Where can the modern contract action be traced to?

English Common Law

An injured party who has established a breach of contract is only entitled to turn to a court for equitable relief such as specific equitable, rescission, restitution and injunctions

False

In most situations, remaining silent or inaction by the person receiving an offer constitutes acceptance

False

In practice, the distinction between primary and secondary liability of a promisor is clear.

False

The Uniform Commercial Code covers both personal and intellectual property

False

The Uniform Commercial code covers only commercial paper and bank collection processes

False

Under the leading object rule, courts look both to the promise itself and to the individual for whose benefit the promise was made.

False

Ruby sells her car to Bob. She fails to tell him that the car has been previously wrecked, even though he had asked if it had ever been involved in a collision. If Bob later learns that the car was almost totaled six months prior to the sale and wants to rescind the contract, what would be his best defense to the enforceability of the contract?

Fraud

What was the first state to adopt the Uniform Commercial Code?

Pennsylvania

A, who is selling her house, was told when bought the house that it was fully insulated when built. She tells B this, and decides to buy the house. if B finds out that the house is not insulated and that, as a result, his heating bills were much higher than expected, B's proper remedy will be

Rescission

The agreement to accept something different from what was due under an original contract is called

Satisfaction

Cunningham contracted with the Cougars to play professional basketball. The Cougars at the time were owned by the Southern Sports Corporation. Which of the following statements is true?

The Cougars could assign their right to have Cunningham play to its successor corporation, the SlamDunk Corporation, and delegate their duty to pay him as well

Restitution is

The return of any property or money given in a contract

On December 20, 1952, Lucy and Zehmer met while having drinks in a restaurant. During the course of their conversation, Lucy apparently offered to buy Zehmer's 471.6-acre farm for $50,000 cash. Although Zehmer claims that he thought the offer was made in jest, he wrote the following on the back of a pad: "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000, title satisfactory to buyer." Zehmer then signed the writing and induced his wife, Ida, to do the same. She claims, however, that she signed only after Zehmer assured her that it was only a joke. Finally, Zehmer claims that he was "high as Georgia Pine" at the time but admits that he was not too drunk to make a valid contract and understood the nature of the discussion. Which of the following statements is false?

There is a contract because intentions are judged objectively and Zehmer admits to having contractual capacity.

An uncle, in writing, promised his nephew $5,000 if his nephew would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until the age of twenty-one, all of which was otherwise legal for the nephew to do at the time. The nephew performed as requested. Which of the following statements is true?

There is a valid contract and the nephew is entitled to the $5,000.

Marie was a famous model. Tempo magazine mailed her an offer to do a five-page photo layout for a new line of swimsuits for $35,000. Marie received the offer January 2. On January 3, Marie mailed Tempo the following note: "I accept. But must have twelve pages devoted to me, and accordingly, $50,000." Tempo received this note on January 5. On January 6, Marie called them and told them she would do the modeling under the original terms.

There is no contract. The offer terminated when Marie made her counteroffer.

A contract may be unenforceable if a party wanting to enforce the contract waits beyond the time period prescribed by law to bring a court action

True

A void contract is totally lacking in effect

True

At common law, an acceptance must be a mirror image of the offer

True

Consideration usually consists of an act or a promise to perform an act

True

Contract law rapidly developed as courts responded to parties' expectation that promises would be enforced

True

Statutes prohibit contractual restrictions on most assignments of rights.

True

The Uniform Commercial Code provides special rules for breaches of contract involving sale of goods.

True

The common law writ of assumpsit was the predecessor of the modern action

True

Under the Uniform Commercial Code, a court can order specific performance in a breach of contract suit over rare artwork.

True

Jesse writes to Nadine, "I'll pay you $50 if you clean my house by Saturday." On Friday, Nadine cleaned Jesse's house as requested. What kind of contract has been formed?

Unilateral

Jill says to Ben, "I offer to sell you my DVD player for $90." Ben replies, "If you do not hear otherwise from me by Thursday, I have accepted your offer." Jill agrees and does not hear from Ben by Thursday. Does a contract exist between Jill and Ben?

Yes, because the parties agreed that silence would constitute an acceptance.

An uncle, in writing, promised his nephew $5,000 if his nephew would refrain from drinking, using tobacco, swearing and playing cards or billiards for money until the age of twenty-one, all of which was otherwise legal for the nephew to do at the time. Would this agreement need to be in writing to satisfy the statute of frauds and be enforced?

Yes, if the nephew will not become twenty-one within a year

If goods are unique, a court could order

specific performance