Contracts 1B

Your very old Uncle Quintus has asked your advice about making sure that a transfer in the amount of $10,000 to his caretaker Kelly gets honored after his death. You should tell him to: A. Execute a promissory note in which he owes it to her in consideration of her great kindness to him. B. Execute a promissory note in which he owes it to her in consideration of $1 had and received. C. Put the gift in his will. D. Reconsider whether Kelly was all that good of a caretaker. E. Make sure the promise is written and not oral.

The $10,000 sounds like a gift. The lesson from Dougherty v. Salt is put it in the will rather than try to make it sound like there is a deal.

Bert says to Ernie, "We're having a tasting of different brands of 30-year-old Scotch at my place on Saturday. If you come over, you're free to participate." Ernie cancels his pedicure appointment, incurring a $25 cancellation fee, and rents a Zipcar. When Ernie gets to Bert's house, Bert refuses to let him in, saying that all the tasting spots are filled. In Ernie's small claims lawsuit against Bert for $25 plus the cost of the Zipcar, what is Bert's best defense? A. Courts will not enforce contracts involving the provision of liquors. B. Even though this is framed as a conditional promise, it is still in the nature of gratuity or gift, and cannot be enforced. C. What Ernie did was unjust. D. It wasn't foreseeable to Bert that Ernie had other plans on Saturday, and that Ernie would incur expenses getting to Bert's house. E. Ernie didn't suffer a detriment.

Review of bargain versus gratuity. B is correct.

In a future time, the United Federation of Planets has adopted the contract law of the present-day United States. Romulans constitute a minority group within the Federation. In order to maintain the ancient Romulan traditions, the Romulan families often provide "Birthright" trips to Romulus after a young Romulan turns 18 years of age. Octavia, a Romulan matriarch, said the following to her 13-year-old grandson, Jupiter: "If you present yourself to me personally at age 18 for the "Grandmother-Grandchild" coming of age ritual, I will fund your Birthright trip to Romulus." Shortly before Jupiter's 18th birthday, however, Octavia revoked the offer and then suddenly passed away. Jupiter turned 18, and has now made a claim against the executor of Octavia's estate for the Birthright trip. Funding of the trip was not included in Octavia's will. The executor, who has fiduciary obligations to others in Octavia's family, would like your assessment of the available defenses against Jupiter's claim. You should advise him: A. There is no effective defense to the claim. Octavia's promise was legally enforceable as a bargain, and Jupiter accepted her offer. B. There is no effective defense to the claim. Octavia's promise was legally enforceable, even though it was not a commercial bargain, because Jupiter relied to his detriment on it. C. The executor should assert that Octavia's promise was not a legally enforceable as a bargain, and even if it was, she and Jupiter never formed a contract. D. The executor should concede that Octavia's promise was legally enforceable as a bargain, but assert that Jupiter never accepted her offer. E. There is no effective defense. Octavia and Jupiter had a bilateral contract and the estate will be obliged to honor it.

Under R2K 32, where the offer is ambiguous as to the means of accepting, Valerie has the choice of treating it as unilateral or bilateral. B is correct because it's the quickest and surest way of creating a binding contract.

According to the Restatement (Second) of Contracts, a contract is: A. A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. B. A manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made. C. An agreement to exchange promises or to exchange a promise for a performance or to exchange performance. D. A promise upon which another party has relied, if the other party has objectively manifest it. E. A manifestation of mutual assent on the part of two or more persons.

A is Restatement 2d, §1 and is the correct answer. B is §2, the definition of a promise. C is from §3, the definition of a bargain. D is something I made up. E is from §3, the definition of an agreement.

Pebbles said to Bam Bam, "I am willing to sell you my tickets to the Kid Rock concert next month if you give me $300 for them." Bam Bam didn't have $300, but without telling Pebbles, he called home to see if Mom would spring for them, and when she said she would, he took the day off work, got into his car, and drove 250 miles round-trip to get the cash. As he got back to his apartment, the phone rang. It was Pebbles. "Sorry, Bam Bam," she said, "I gave the tickets away." If Bam Bam were to sue Pebbles, Pebbles's best argument in defense would be: A. Pebbles revoked her offer before Bam Bam tendered or began the invited performance or tendered a beginning of it, thus terminating Bam Bam's ability to accept it. B. Pebbles never made an offer. C. Bam Bam could only have accepted the offer by way of a reciprocal promise to buy the ticket. D. Pebbles never created an option by making an offer that induced Bam Bam to rely on it. E. Bam Bam never accepted a bilateral offer by beginning performance of the requested act.

A is correct because the best thing Pebbles can do is argue that this clearly invited acceptance by performance (giving her $300). Bam Bam's actions had nothing to do with performing the contract or tendering performance, thus allowing her to revoke before the R2K 45 option was created. There is arguably an offer here, so A is a better answer than B.

In the case of Kim v. Joe, the legal outcome depends on whether Joe and Kim were so intoxicated at the time of their meeting so as not to understand the consequence of their actions. In the trial court, the trier of fact (here a judge) determined that indeed they were so drunk as to be deemed objectively incapable of forming a contract. As a result, Kim, who wanted to enforce the agreement, lost at trial and is appealing. What is the correct outcome as to the appellate court's review of the determination of their state of intoxication? A. Normally appellate courts defer to the factual conclusions of the trier of fact, whether a judge or a jury. B. Normally appellate courts will review the underlying facts and draw their own conclusions. C. Appellate courts have a written record of the trial court proceedings and therefore are capable of making good judgments about the credibility of the factual evidence. D. Normally, appellate courts defer to the factual conclusions of a jury, but not to the factual conclusions of a judge when the case involves a bench trial. E. In cases involving equitable relief, the appellate court resolves them.

A is correct. B, C, and D are all wrong because appellate courts normally do defer to the factfinder, whether judge or jury. E is nonsense.

Able is trying to land a contract to manage the Mordor National Golf Course in Moline, Illinois. His friend, Baker, is a well-connected business person in Moline. Able calls Baker, and says the following: "Do you know Ronald Mordor, the owner of the golf course? I need to get in touch with him." Able doesn't say why. Baker replies, "Yes, I do know him. Here's his email address. You can let him know that you are a friend of mine." Able follows up with Mordor and gets the very rich contract. Baker later hears about the contract and sues Able for a finder's fee. If you were representing Baker, what would be your best theory of recovery? A) Even though there was no contract formed in the phone conversation, Able has been unjustly enriched at Baker's expense. B) Able's statement can be fairly interpreted as a manifestation of an intention to act in a certain way, made so as to justify Baker in understanding a commitment had been made. C) The conversation can be fairly interpreted as an implied in fact contract under which Able would pay a finder's fee to Baker. D) It would be unconscionable for Able to get the benefit of the contract and not pay Baker. E) Able implicitly promised to pay Baker, Baker justifiably relied on the promise to her detriment, and it would be unjust not to allow the recovery.

A is correct. It may not be a very good claim (see Bloomgarden) but the ONLY claim Baker is going to be able to make credibly is a restitution claim

Professor Marcos leaves her dog in a crate when she goes to school to teach her classes. She leaves at 9 a.m. and is usually home by 1 p.m. This past Thursday, the dean asked her to stay until 5 p.m. She called her neighbor, Harold, who happened to have a key to the house. "Could you let the dog out of the crate and take her out to do his business in the backyard?" she asked. Harold said, "Sure." Later that evening, Professor Marcos called Harold and said, "Thanks so much. I owe you big time. Any reasonable favor, just ask, and I will drop whatever I'm doing to help." A week later, Harold calls and tells Professor Marcos he needs her to dog-sit his puppy for three days. To do it, Professor Marcos would have to cancel her horseback riding lesson. Is there a basis for Harold's argument that Professor Marcos is legally bound to dog-sit rather than go horseback riding? A) Yes, if a court were to conclude that she was enriched by Harold's earlier performance and that it would be unjust for her not to fulfill her own promise. B) Yes, because Harold relied to his detriment on her promise. C) No, because a promise made in connection with a benefit that has already been received can never be enforceable. D) No, because there was no bargained-for exchange. E) No, because the legal system has no way of determining what "reasonable" means in this context.

A is correct. This is the theory of promissory restitution

Mary and John agree over the phone that John will purchase Mary's used iPad for $50, with Mary to deliver it on the following Tuesday. You are the judge. Should this be deemed to be a binding contract? A. No, because it is not in writing. B. No, because the agreement was over the phone. C. No, because the consideration was inadequate. D. Yes, because it appears to be a promise in consideration of a promise. E. Yes, because John relied on a promise made by Mary.

A is wrong because a contract does not necessarily have to be in writing to be binding. B is wrong for the same reason. There is no reason to suppose the consideration is inadequate, and courts generally do not inquire into the adequacy of the consideration if there appears to be a bargain. E is incorrect because there is no indication in the problem of any reliance. D is correct because the fact situation appears to show promises and a bargain (i.e. consideration).

On Thursday, Abigail and Zack were on the second-floor landing, each standing in front of their apartment doors with their keys in their hands. Abigail said to Zack, "If you come over on Saturday to watch the Michigan football game, I will treat you to some of the $85 bottle of Lagavullin scotch that my friend gave me." Zack replied, "It's a deal!" On Saturday, Zack knocked on Abigail's door. She opened it, looked at Zack, and said "Get lost." If Zack were to sue Abigail, which of the following theories would be the best one for Abigail to assert in defense based only on the foregoing facts? A. That Abigail and Zack actually never made promises to each other about the scotch. B. That Zack was under duress to accept the deal. C. That this was a social understanding and not an enforceable bargain. D. That Zack gave up going to his mother's house on Saturday and therefore relied to his detriment. E. That agreements regarding bottles of Lagavullin scotch are unenforceable.

A is wrong because application of R2K §2 would indicate these were promises - manifestations of intentions to act made so as to justify in another the expectation that a commitment had been made. B and D are MSU. E is wrong obviously. C is correct because this is clearly a social obligation.

A waiter, Igor, from the Chez Revere Beach, a five-star restaurant overlooking the ocean, has come to your office. Chez Revere Beach is one of the hottest restaurants. To dine there, you must book a reservation six months in advance. Henry and Emily Gale had dinner there and Igor waited on them. The total bill, including wine and dessert, was $600. Normally, Igor would expect a 20% tip, in this case, $120. Henry and Emily signed the credit card slip for $600 but did not include a tip. As a matter of principle, Igor wants to sue the Gales. The legal theory you will want to assert on his behalf is: A. In the context of a dinner at a five-star restaurant like Chez Revere Beach, a tip for a waiter like Igor is more in the nature of an implied contractual commitment than a gratuity once you sit down and accept the service. B. The law imports moral obligations into its rules, and the Gales had a moral obligation to give a tip to Igor. C. It is well-established that most of a waiter's income derives from tips and therefore there is a legal obligation to pay a tip if you go to a restaurant. D. The Gales promised to pay, and Igor bargained for a return promise. E. The owner of Chez Revere Beach breached an implied duty to Igor when she failed to notify incoming restaurant patrons of their obligation to add a tip to the bill at the conclusion of the meal.

A tip or gratuity seems, ordinarily, like it ought to be treated as a non-contractual obligation. But there are likely circumstances when a tip is more in the nature of an obligation. Probably having dinner at a fancy restaurant is one of them. A expresses that theory. B is not a legal theory. C is MSU about what is well-established. D is MSU about the facts. E is nonsense.

Catherine, an expert in negotiation strategy, sits down at a table in an upscale restaurant. She pulls a $100 bill out of her wallet and tears it precisely in half. She says to the waiter, Xavier, "You know, of course, that exactly one-half of a bill is no good for either you or me. If you provide me with outstanding service, I will give you the other half of the bill as your tip." Xavier doesn't respond except to say, "May I bring you a cocktail?" At the end of the meal, Catherine signs the credit card receipt for the cost of the meal, but says to Xavier, "Sorry, but you aren't getting a tip." If Xavier were to sue Catherine to get the other half of the bill, her best legal argument in defense would be: A. Xavier didn't provide outstanding service. B. Catherine had several drinks before coming to the restaurant and therefore could not have objectively manifested willingness to enter a bargain. C. When a waiter does not acknowledge an unusual method of receiving a tip, there is no objective manifestation of a bargain. D. When a customer conditionally offers a $100 tip and the waiter accepts the offer, the waiter's mere performance of his ordinary duties does not constitute sufficient consideration to support the finding of a binding contract. E. Xavier would have performed anyway, and therefore did not rely on the promise.

A, B, and E are MSU. D is wrong because it suggests the court is going to assess the adequacy of the consideration. C is the best of these alternatives, because X's silence suggests the parties never actually made a deal.

A unilateral contract is: A. One in which a promise is exchanged for a performance, such as "I will pay you $5,000 if you put sand on my beach." B. One in which a promise is exchanged for a promise, such as "I will pay you $5,000 if you promise to put sand on my beach." C. One in which a promise gets made and the other party relies on the promise to its detriment. D. One in which a party performs and can infer there was a promise to pay made by the other party. E. One in which a party has the unilateral discretion to revoke a promise under which the only means of acceptance is performance by the other party.

A. Definitional.

What is specific performance? A. It is a remedy at law distinct from general performance which is an equitable remedy. B. It is an equitable remedy available in contracts for the sale of land. C. It is something that arose because the English law courts objected to the jurisdiction of the courts of chancery. D. It is a remedy that is unavailable when the particular parcel of land is not unique. E. It is a remedy not available for breach of a contract for the sale of land if one of the parties can find an expert appraiser who will determine the lost value on account of the breach.

B is correct.

Danielle, a construction contractor, sent by overnight delivery a written note to Isidore, a dry wall installer, that read: "I hereby offer the dry wall installation subcontract at 154 Richdale for $30,000; work to begin November 10." Isidore received the written note on September 25. He sent an email to Danielle on September 29 stating, "I accept your offer, but I will not be able to begin work until November 15." On November 15, Isidore showed up at the work site. Danielle barred him from entry. Isidore now wants to know if he has a good claim for breach of contract against Danielle. Your answer should be: A. No, because his power of acceptance expired due to lapse of time. B. No, because his response had the effect of a rejection. C. Yes, because he accepted the offer on September 29. D. Yes, because Danielle non-response to his email of September 29 constituted an acceptance by silence. E. No, because Danielle's note of September 25 did not constitute an offer.

B is correct. Counter-offer that acts as rejection.

Jill purchased a condominium from Jack for $150,000 under a contract, one paragraph of which provided the sale was "as-is, where-is, and with all faults." Jill believed that the market price for a pristine condominium of this sort was approximately $170,000, and that she would have to do about $20,000 worth of rehab once she owned it. It turned out that the required repairs cost Jill about $50,000. What is the most likely outcome of Jill's suit against Jack for $30,000? A. She ought to lose, because the contract was not in writing. B. She ought to lose, because the court will not address the adequacy of the consideration. C. She ought to lose, because you cannot sue for damages after the contract has been performed. D. She ought to win, because it turns out the consideration was not adequate. E. She ought to win, because the "as-is, where-is, with all faults" paragraph created an illusory bargain.

B is correct. This is a review of the principle that ordinarily courts won't assess the adequacy of the consideration.

Amy is replacing a window. She asks Bart, her next door neighbor (who is a lawyer) to come over and help her. It ends up taking an hour. Later, Bart sends her a bill on his law firm stationery for his hourly rate of $300. Amy should respond to Bart: A) By refusing to pay the bill because the act of sending it on law firm stationery implicitly constituted duress. B) By refusing to pay the bill because Bart was doing her a favor. C) By paying the bill because she would otherwise be unjustly enriching herself at Bart's expense. D) By paying the bill because there was an implied in fact contract. E) By paying the bill because there was an implied bargain.

B is correct. This is clearly a social favor.

The dean sat in on Professor Lipshaw's class and was awed by the quality of the teaching. The dean sent Professor Lipshaw an email the next day that said, "I know you already get paid for what you do, but as a token of the school's appreciation for your teaching, I promise you an extra research grant of $1,000." There is no evidence Professor Lipshaw did anything to rely on the promise. Later, the dean apologized to Professor Lipshaw as follows: "I was so overcome by your charisma I didn't know what I was doing. We really don't have the capacity to pay you that $1,000." If Professor Lipshaw were inclined to pursue a legal claim, what is his most plausible theory? A. The dean's promise was gratuitous and therefore binding. B. There was consideration in the form of a promise for a return promise. C. The promise should be binding to prevent injustice even though it was in recognition of a benefit previously received by the promisor from the promisee. D. There was consideration in the form of a promise for a return performance. E. The dean's promise constituted a charitable pledge supported by consideration or reliance.

C is correct because it is a "past consideration" case, and so the only way to prevail (absent any reliance as indicated) is to argue "injustice."

On Sunday, Lenore and Ophelia were on the second floor landing, each standing in front of their doors with their keys in their hands. Lenore said, "I have an unused Apple AirPort Extreme Wifi Router that costs $200 at BestBuy." Ophelia replied, "I will buy it from you for $100." Lenore said, "No, I can get more for it than that on Ebay." Later that evening, Lenore had second thoughts and emailed Ophelia as follows: "Forget what I said before. I accept your offer of $100." Ophelia immediately responded, "Sorry, no can do. I already bought another one." Lenore has asked your advice whether she has a good breach of contract claim against Ophelia. You should tell her: A. Yes, because her acceptance was a mirror image of the offer. B. Yes, because she had a power of acceptance. C. No, because she no longer had the power of acceptance. D. No, because there was no consideration for the promise. E. No, because there was no bargain.

C is correct. Lenore terminated her power of acceptance when she rejected the offer the first time. Since there was no power of acceptance, her later statement was meaningless.

Sam is with his dog Tia in the local dog park. Jasmine is throwing a squeaky ball to her dog. On a previous occasion, Tia grabbed a squeaky ball from another dog in the park, swallowed it, and required $4,000 worth of surgery to retrieve it. This time, Tia grabs Jasmine's squeaky ball, refuses to give it up, runs to the far side of the park, and manages to get the ball trapped in her throat. It so happens that Christine, an emergency veterinarian, is walking through the far side of the park at that moment. She sees Tia in trouble, and before Sam has a chance to make it to the other side of the park, she has corralled Tia, opened her medical bag, taken out some forceps, and extracted the ball. Sam arrives moments later, huffing and puffing from the run. Christine says, "I just saved your dog's life. If I had done what I just did in the clinic, the bill would be $300." Sam wants to know: "If Christine were to sue me for $300, what is the most likely outcome if she asserts a restitution claim? A) Christine is likely to win because there was an implied in fact contract. B) Christine is likely to win based on Sam's moral obligation to her. C) Christine is likely to win because it is reasonable to expect Sam would have asked her to do what she did even knowing the price. D) Christine is likely to lose because there was no implied in fact contract. E) Christine is likely to lose because Sam wasn't unjustly enriched.

C is correct. Sam was enriched by $300 and it seems entirely reasonable, given the history, that he would have gladly paid it to save his dog. This seems like a very good case for legal restitution, regardless what you think of Christine's morality.

Douglas was repairing his roof. His next-door neighbor, Edna, was a professional roofer. Douglas was having a hard time of it and saw Edna in her driveway. He called out, "Hey, Edna, do you have a minute to help me?" Edna climbed up the ladder, assessed the situation, and showed Douglas how to fix it. There was no other conversation. Later Edna sent Douglas a bill for $50. If Edna were to sue Douglas for $50, what is Douglas's most persuasive defense? A) The circumstances clearly indicated that he was asking Edna for a favor. B) There was no implied contract because nobody made a promise and there was no bargained-for exchange. C) If Edna expected that this was a contractual relationship rather than a favor, she should have made it clear at the time. D) It is never appropriate to expect payment after the fact for services rendered. E) Edna's conduct was unconscionable and not very neighborly.

C is correct. This could have either been a social favor or a professional engagement. Given the circumstances, Edna was in the best position to clarify that it was meant to be social.

Max is sitting in his dining room, drinking a mocha java as the snow falls. Thelma and Louise, two local youths, appear on his driveway with a snow blower. Louise traces a question mark with her hand in the air. Max gives a thumbs up sign. An hour later, after they have cleared the driveway of snow, Thelma and Louise knock on the door and ask Max for $25. Is Max legally obliged to pay them? A) No, because they never settled on a price. B) No, because there was no promise and no consideration. C) Yes, because the implied contract in fact was a promise to shovel for a promise to pay a reasonable price. D) Yes, because there was a quasi-contract. E) No, because the contract was not in writing.

C is correct. This is a classic instance of an implied in fact contract. The parties dealt with each other but did not expressly agree to terms.

Edward thinks he would like to buy a 12-year-old quarter horse named Ichabod from Attila. The asking price is $12,000. Edward, however, needs three months, first, to come up with the money and, second, to persuade his wife that buying a 12-year-old quarter horse is a good idea. Edward is worried that Attila will have other offers to purchase Ichabod, and will sell Ichabod before Edward is ready. Edward has asked you if there is a way to structure a proposal to Attila that will accommodate his concerns. It would be reasonable for you to suggest that: A. Edward should make an offer because he will then have a power to require Attila to accept. B. Edward simply wait until he is ready to approach Attila because there is no legal structure that could accommodate his concerns. C. Edward should give Attila a written offer to purchase Ichabod for $12,000 within three months, and offer Attila $500 for the exclusive right to purchase Ichabod during that time. D. Edward should give Attila a written offer to purchase Ichabod for $12,000 within three months, and have Attila promise not to accept any other offer in the meantime. E. Edward should give Attila a written offer to purchase Ichabod for $12,000, and provide that the offer expires in three months.

C is correct. What Edward needs is an option, which means that he has paid separate consideration for the privilege of having the power of acceptance stay open.

George is an electrical contractor. Phylicia is a general contractor. On October 15, 2016, Phylicia sent out bids for the electrical work on an office building. The bid contained a list of specifications and concluded as follows: "This is an offer that electrical contractors may accept only by appearing at our office on December 15 with three references from prior jobs and a completion bond made out to Phylicia." George very much wants to obtain the contract. What is his best strategy? A. Appear at Phylicia's office on December 15 with three references from prior jobs and a completion bond made out to Phylicia. B. Enter into agreements with electrical subcontractors so as to create a record of detrimental reliance. C. Send an email that says "I hereby tender performance of the contract." D. Begin the process of collecting references from prior jobs and obtaining a completion bond so as to create a record of detrimental reliance. E. Immediately send Phylicia a certified letter, return receipt requested, that says, "I hereby accept your offer and promise to appear at your office on December 15 with three references from prior jobs and a completion bond made out to you."

C is wrong because that is not the standard on appeal. A is correct of the remaining four, because if you are raising multiple defenses to a claim, you only need to succeed on one of them to win. Indeed, that should be your intuitive reaction - one theory of defense worked so Ulysses defeats the claim.

George agreed with Spencer Spacely, the president of Spacely College, that George would contribute $1,000,000 "in consideration of" Spacely College's naming of a new central plaza in honor of George's mother. After Spacely College had begun work on the plaza, George notified it that, due to unforeseen circumstances, he would not be making the contribution. Spacely College filed a lawsuit against George. In Count I, it alleged that the foregoing facts stated a claim of breach of contract against George. In Count II, it alleged that the foregoing facts stated a claim of promissory estoppel against George. After discovery, on George's motion for summary judgment, the court held that there was no consideration as a matter of law but that there was a genuine issue of material fact as to the College's reliance on the promise. What effect would the court's holding have on Counts I and II? A. Count II would be dismissed but Count I could go forward to trial. B. Both Count I and II would be dismissed. C. Both Count I and II could go forward. D. There was no promise and therefore no claim possible against the College. E. Count I would be dismissed but Count II could go forward to trial.

Count II for P/E doesn't call for consideration, so E is correct. It can go forward.

Flintstone offers Pebbles an iPod Nano if Pebbles gets an A in paleontology. Pebbles replies, "Dad, an iPod Nano is something out of the Stone Age. If I get As in both paleontology and archaeology, will you get me an iPhone 7?" Flintstone agrees. If litigated, would this likely be considered an enforceable contract? A. Yes, because it satisfies all the elements contained in Restatement (Second) of Contracts § 71. B. Yes, because it constitutes a conditional promise. C. Yes, because there is consideration. D. No, because Flintstone never made a promise. E. No, because it is a typical intra-family promise.

Even though it looks like a bargain, this is a social commitment and gratuitous. E

The organization "Save the Bunnies" purchased a mailing list of subscribers from a magazine publisher. It undertook a mass mailing of unsolicited packages of fancy return address stickers along with a note that said, "Thank you for your interest in saving the bunnies. If you use these return address stickers, we will deem it to be a contract under which you have agreed to make a $5 contribution to save the bunnies." Having a printing company make up these stickers would cost somebody about $5. The CEO of Save the Bunnies has asked you whether the organization has a legal claim against recipient who use the stickers without making a contribution. Your advice should be: A) Yes, because the recipients have been unjustly enriched in the amount of $5. B) Yes, because there was an implied in fact contract. C)Yes, because there was consideration. D) No, because Save the Bunnies was a self-promoter. E) No, because Save the Bunnies did something unconscionable.

D is correct because StB is clearly a "self-promoter." This is simply a more subtle version of the NYC wiper man scheme.

The Society for Enlightenment is an organization, located in Brookline, which promotes secular humanistic ethics. It consists of 1,500 families. The Society runs a Sunday morning "ethical" school for children. It holds "reflection and contemplation meetings" on Saturday mornings. One of its rituals is the "Coming of Age" ceremony that occurs when a child turns fifteen. The child conducts one of the Saturday morning meetings and gives a talk on his or her ethical learning. The Coming of Age ceremonies have turned out to be very popular with the organization's families, and they reserve dates two years in advance. It has also become the custom for the families to have large celebrations in connection with the ceremony, often on the scale of grand weddings. In 2010, John and Abigail Adams reserved a Saturday date in November 2012 for their son Quincy's ceremony. The Society's Executive Director, Prudence Throckmorton, confirmed it to Abigail during a phone call. There was nothing written, but Ms. Throckmorton was aware of the celebration custom. In reliance on the confirmation, Abigail reserved the Boston Ritz Carlton ballroom for the evening of ceremony, incurring a $10,000 non-refundable deposit, and engaged the Canadian band Nickelback, Quincy's favorite, to play at the party for another $10,000 non-refundable deposit. In August 2012, Ms. Throckmorton advised the Adams family that she had made a mistake, that the November 2012 Saturday was not available, and that the first open Saturday would be in June 2013. The Adams family sues the Society to recover $20,000. Which of the following is the most likely result? A. Society wins, because anybody hiring Nickelback deserves to lose. B. Society wins, because this was a commercial undertaking and promissory estoppel does not apply even if the Adams family relied on Ms. Throckmorton's assurance. C. Society wins, because there was no consideration for Ms. Throckmorton's promise. D. Adams wins, if the court concludes that injustice can be avoided only by enforcement of the promise. E. Adams wins, because Ms. Throckmorton was aware of the Society's customs and that families would be relying on her commitments when arranging their celebrations.

D is correct. E tests the reliance factor, but D adds the factor that even if there is reliance the court has to determine that injustice can be avoided only by enforcement of the promise.

9. Raspberry Bakery, LLC ("Raspberry") rented a building from Commercial Realty, Inc. ("Realty") and operated the bakery in it. Five months before the lease expired, vandals smashed the large front window. The lease provided that Raspberry was responsible for making and paying for repairs of this kind. Raspberry immediately contracted with Acme Glass to replace the window. The price of the repair was $2,000, due 30 days after Acme's satisfactory completion of the repair. At the time of the repair, Realty was not aware that Raspberry had contracted with Acme. Acme dealt entirely with Raspberry, even though it knew that Raspberry leased the building. Sixty days after Acme had satisfactorily completed the repair, and before the Raspberry-Realty Lease expired, Raspberry became insolvent, abandoned the business and vacated the building. The effect of this under the lease was that Raspberry forfeited its right to the return of a $2,000 security deposit being held by Realty. The lease had provided, however, that the express purpose of the deposit was to cover any damage to the leased property except ordinary wear and tear. The only such damage occurring during Raspberry's occupancy was the smashed window. Acme's bill for the window replacement now remains unpaid. Acme has sued Realty to recover the $2,000. If you were to advise Realty about the situation, your best assessment would be that Acme is very like to: A) Lose, because Acme was a self-promoting intermeddler. B) Lose, because even though Realty received the benefit of something Acme had done, Acme was a gratuitous intermeddler and has no right to recover. C) Win, because Acme reasonably relied on Raspberry's promise, and injustice would result if the promise were not enforced. D) Win, because if Realty and Acme thought about it ahead of time, Realty would have used the $2,000 to have the window repaired. E) Win, because this is an implied in fact contract between Realty and Raspberry.

D is correct. Here, it would seem it's not a social favor, but closer to a professional undertaking Priscilla would have paid for (Same reasoning as Priscilla question)

Waldo, an adult, has significant mental disabilities. Diana, a real estate broker, knowing this, nevertheless persuades Waldo to pay $5,000 for an acre of Florida swamp land that has a true value of $500. Waldo's guardian has asked your opinion about the likelihood of success in a lawsuit against Diana to rescind the deal. The best advice is: A. "The objective circumstances indicate that there was a bargain, and Waldo is going to lose." B. "Courts will not examine the sufficiency of the consideration and Waldo is going to lose." C. "Waldo was clearly the victim of duress and therefore is going to win." D. "Waldo will win if a court decides that these facts merit applying the rules of exploitation rather than the rules of bargain." E. "Waldo will lose because he had the freedom to make a bad deal."

D is correct. This highlights a case in which there are two possible rules to apply to the case, and the outcome will depend on which rule gets applied. None of the answers except D recognize the possibility of more than one rule applying.

On the day of his Suffolk University Law School graduation, as he is about to receive his diploma, Gary Gunner says to the dean, "I am so grateful to this school for all that it has given me, I want to endow the corner of the grand atrium on the first floor where I spent at least six hours a day in one of the chairs. I plan, as soon as I can afford it, to contribute $1,000,000 for the upgrade and ongoing maintenance of that corner of the atrium, as long as I can have my picture on the post." Gary then does a Michael Jackson style "moonwalk" across the stage to the cheers of his classmates. Three years later, the dean learns from the newspaper that Gary has obtained a $5,000,000 plaintiff's personal injury verdict on behalf of a client, which under ordinary circumstances would mean that Gary would get a $1,666,667 fee. The dean immediately commits the school to a $50,000 upgrade of that corner of the atrium, and puts Gary's picture up on the post. After Gary refuses to contribute (having reconsidered how annoying his contracts professor was), the school sues him. What is Gary's best argument in defense? A. Gary's statement did not invite acceptance by performance and thus the dean's commitment to the upgrade of the atrium did not create a unilateral contract. B. Gary's statement at the commencement was a statement of present intention and not a promise. C. There was no implied in law contract as to which the school is owed restitution. D. There was neither bargained-for consideration nor justifiable reliance that would make this an enforceable promise. E. Gary's comments had none of the hallmarks of a serious offer on the solemn occasion of a university commencement, and could not have been considered a joke as a matter of law.

Definition of a promise under R2K 2. B is correct. D might be true as there wasn't any consideration and it's possible the reliance wasn't justified but that is a fact issue. It is far clearer that Gary didn't make a promise but only stated a present intention. As to E, it might be a joke, but not as a matter of law.

Several years ago, Grandma Moses said to Priscilla, who was then sixteen years old, "If you graduate from high school summa cum laude, I will buy you a car when you go off to college." Priscilla then gave Grandma a big hug. Sadly, Grandma Moses passed away before Priscilla finished high school. Priscilla did graduate summa cum laude. It happened that Franklin Sidway, a vice president of the local bank, was administering Grandma's estate, and refused to allocate funds for the purchase of a car. Priscilla has come to you for advice about whether she should sue the estate. What would be appropriate advice on the question whether Grandma's promise is now enforceable? A. You are likely to win because the "if" clause in the conditional promise was an objective manifestation of a bargain in which Priscilla incurred a detriment. B. You are likely to win because the promise was a manifestation of an intention to act made so as to justify Priscilla in understanding that Grandma had made a commitment. C. You are likely to lose because the statute of limitations had run. D. You are likely to lose because the administrator of the estate had no discretion to allocate the funds. E. You are likely to lose, even though the conditional promise made it look like a bargain, because a court would view this as a gratuity on Grandma's part.

Despite the form of the promise, this really is a gratuitous promise. The only way to win is to argue Hamer v. Sidway consideration, but you don't have that option here. E is the best answer.

Buffy is very wealthy. She has always admired Melinda's non-profit corporation, Save the World Bank, Inc., which engages in micro-lending in developing countries. Buffy decided she wanted to contribute $100 million dollars to Save the World Bank under a number of conditions, including Buffy's right to monitor the Bank's usage of the money. She hired a large Wall Street law firm to represent her in the drafting of the contribution agreement. Save the World Bank, Inc. also had legal representation. After Buffy signed the agreement, she had second thoughts. If you were representing the Save the World Bank in an action to enforce the agreement, what would you claim to be the evidentiary impact of her having hired a law firm? A. It suggests she was concerned with her estate planning. B. It suggests she was very careful. C. It is irrelevant to any determination in the case. D. It suggests that her contribution was not a conditional promise. E. It suggests that the agreement was a bargained-for exchange.

E is correct

Sam orders $15,000 worth of office furniture from Staples, with payment due on delivery. He is short of cash, so he e-mails his friend, Thelma, who owes Sam $15,000 from card games they have played over the last year, that Sam needs the cash to pay on the delivery of the furniture. Thelma e-mails back that "the check is already in the mail; I sent it yesterday." It turns out Thelma's statement was a bald-faced lie. Because he doesn't have the cash when the furniture arrives, Sam cannot take delivery, and Staples charges him a $1,000 return and restocking fee. Assuming Sam decided to take legal action against Thelma for the $1,000 Sam was out of pocket, the best theory of recovery applicable to these facts would be: A. Promissory estoppel. B. Charitable subscription. C. Assumpsit. D. Trespass on the case. E. Equitable estoppel.

E is correct, not A, because there was no promise relied upon. It was a statement of present or past fact.

Next door to Max lives Annie. During this particular snowfall, Annie is on vacation in Cozumel, Mexico. Her driveway is full of snow. Thelma and Louise decide to shovel it as well. When Annie returns home the next day, she finds a clean driveway. Thelma and Louise knock on her door and ask her to pay them $25. Annie refuses to pay. Assume Thelma and Louise bring a legal claim for $25. If you were representing Annie, what would be your best theory in defense? A) Thelma and Louise have subjected Annie to duress. B) $25 is not a fair price. C) Asking to be paid after the fact is unconscionable. D) Thelma and Louise did a poor job. E) Thelma and Louise were intermeddlers.

E is correct. Here there is no implied in fact contract. Thelma and Louise want to get recovery based on the supposition you would have asked them to do it. The best theory in defense of the claim is that they were gratuitous or officious intermeddlers.

Priscilla owns a vacation home in Blue Hill, Maine. She is not there much of the year. Quincy does Priscilla's lawn maintenance and plows the driveway in the winter. Quincy happens to be near the house when the plumbing springs a leak and the automated alarm system calls the police. Quincy goes in with the police, fixes the leak, cleans up, and sends Priscilla a $200 bill. What is Quincy's best legal argument in favor of getting paid? A) There was an implied contract because there was the equivalent of a bargained-for exchange. B) Priscilla should be estopped from denying her responsibility to pay the bill. C). There is a moral imperative to compensate people who have done favors for others, regardless of the legal obligation. D). The doctrine of estoppel in pais applies here. E). Priscilla has been unjustly enriched because it seems clear that if she had been asked, she would have agreed to have paid Quincy do what he did.

E is correct. Here, it would seem it's not a social favor, but closer to a professional undertaking Priscilla would have paid for.

In 2018, Tom purchased a home in Euphoria City (the largest city in the State of Euphoria) that is part of the Euphoria Lakes Homeowners Association (the "Association"). There is a master deed that governs all the property in the Association. The master deed states: "No homeowner shall display signs or other advertising devices (including political or advocacy messages) on the exterior of the home or on the lot without express written permission from the Association." During the fall 2020 campaign for the governor of Euphoria, Tom put up a flag in support of William Jennings Ryan, the nominee of the Euphoria Gold Standard Party. Tom's neighbor Ben and the Association sued Tom, seeking removal of the flag. Tom wants to keep the flag in place. What is the likely result of the lawsuit? A. Tom wins, because his constitutional right to free speech takes precedence even over a private contract. B. Tom wins, because the master deed isn't really a contractual commitment on his part. C. Tom wins, because a court enforcing the contract would be a state actor denying a First Amendment right. D. Tom loses, because the Association performs the function of a government and is therefore the equivalent of a state actor. E. Tom loses, because there is nothing constitutionally impermissible per se in a private agreement restricting signs in a residential neighborhood, and enforcement of the restriction does not constitute improper state action.

E is correct. This is an instance, as discussed in class, in which private rights under the "neutral" law of contracts might conflict with other rules or social norms. Nevertheless, as we saw, sometimes the private rules will prevail. If the restriction were a racial exclusion covenant, the constitutional principle under the Fourteenth Amendment would prevail. But contracts restrict the right to speech all the time, and those restrictions aren't seen as being directed to constitutionally suspect classifications like race, religion, or ethnicity.

Barney said to Fred, "I am currently planning on taking off next week and playing golf on Friday." Relying on that statement, Fred made a reservation at Winged Claw Country Club and charged the $2,000 fee on his credit card. When Fred arrived to pick up Barney on the following Friday, Barney said, "Oh, I can't golf today; Betty wants me to go to the mall." At that point, Fred was out Barney's $1,000 share of the fee. If Fred were to sue Barney for the $1,000, Barney's best defense would likely be: A. Barney never made a promise to Fred. B. Fred unreasonably relied on Barney's statement. C. The interest of justice would not be served by enforcement of the promise. D. There was no consideration. E. This was clearly a social obligation and social obligations are never enforced.

E is wrong because P/E could be used in social or family situations. D isn't helpful because the point of P/E cases is that there ISN'T consideration. As between A and B, there's no question Fred appeared to rely on the statement, but proving it was unreasonable raises a fact issue. The best answer is A because a court could rule as a matter of law that Barney never made a promise.

In November 1995, Elroy said to Jane, "I offer to sell you my copy of the famous Bob Dylan poster that was included in his 1967 Greatest Hits album. Bob himself autographed the poster. You can have it for $100." Jane's only response at the time was, "Oh, come on, Elroy." The two never spoke of it again until November 2016, when Dylan was awarded the Nobel Prize for Literature. The value of the poster had gone up to almost $1,000. Jane called Elroy and said, "Elroy, I accept your offer." Elroy no longer has any desire to sell the poster. His best defense if Jane were to sue is: A. Jane's acceptance was not a mirror image of the offer. B. Jane's statement in 1995 constituted a rejection of the offer. C. Jane's statement in 1995 constituted a counterclaim. D. Jane should have negotiated an option. E. Jane's power of acceptance ended by lapse of time.

Elroy clearly made an offer. Jane neither accepted nor rejected it with her statement. Elroy never revoked the offer. The best argument is that it didn't stay open for 21 years. E is correct.

Elmer promised to make a $12,500 contribution to Bugs's soup kitchen for homeless Looney Tunes characters. After thirty days, Bugs had not received any money. He called Elmer and asked about it. Elmer said, "Oh, I sent the check three days ago. It ought to show up soon." Bugs set down the phone and committed in writing to purchasing $12,500 worth of construction improvements to the soup kitchen. In fact, Elmer's assistant, Porky, had forgotten to mail the check. When the check didn't arrive, Bugs called Elmer again. This time Elmer checked with Porky and learned the check had never been sent. At that point, Elmer reconsidered the contribution and told Bugs he had changed his mind. The legal theory Bugs and the soup kitchen would need to assert against Elmer is: A. Promissory estoppel, because Elmer promised Bugs that the check was in the mail. B. Equitable estoppel, because Elmer led Bugs to believe that the check was in the mail. C. Equitable estoppel, because Elmer promised Bugs that the check was in the mail. D. Promissory estoppel, because Elmer led Bugs to believe that the check was in the mail. E. Estoppel in pais, because Elmer promised Bugs that the check was in the mail.

Equitable estoppel, as we saw in discussion of Ricketts v. Scothorn, is not about a promise that induces reliance, but a statement about existing or past fact that turns out to be false and induces reliance. B is correct.

Jeff Tech, Inc. is a startup company negotiating its first round of venture capital investment. Cunha Capital Partners signed a term sheet with Jeff Tech under which Cunha agreed to invest $1,000,000 in the company and receive 5,000 shares of convertible preferred stock. The term sheet did not state explicitly whether it was binding or not binding, but it contained the following provision: "Cunha's investment in Jeff Tech shall be evidenced by a definitive agreement to be executed by both Cunha and Jeff Tech." The preparation of the definitive agreement ended when the lawyers for Jeff Tech and Cunha could not agree on an appropriate representation from Jeff Tech to Cunha regarding Jeff Tech's ownership of all of the intellectual property being used to make its products. Cunha refused to go forward and Jeff Tech sued based on the term sheet. Cunha's best theory of defense to the lawsuit, based on these facts, will be: A. There was no consideration for Cunha's investment of $1,000,000. B. The term sheet did not constitute a promise to invest. C. The term sheet was an agreement to agree and therefore not enforceable as a real bargain. D. Cunha shouldn't have to invest when there is a real question as to the right to use the intellectual property. E. Jeff Tech's promise constituted an illusory bargain.

Except for the provision about the definitive agreement, the facts suggest the term sheet was a real bargain. The best fact in the narrative for Cunha is the fact that the deal had to be sealed with another signed agreement, as in Phytelligence. Thus, C is the best answer.

Johannes visits Fitness Plus, a local gym in his neighborhood. Oscar, one of the membership specialists, shows him around the facility. When they are done, Oscar asks, "Are you interested in joining?" Johannes responds, "Yes, it's a possibility." Oscar says, "What we do at this point is send you our terms via email." Johannes replies, "That's fine," and gives Oscar his email address. Later that day, Oscar sends Johannes an email that states in the final paragraph in bold face and a large font: "By receiving this email you agree to enroll at Fitness Plus for one year at a price of $15 per month, and we will assume, unless we hear from you otherwise, that you have joined our club." Johannes sees the email but deletes it and never follows up. Several weeks later he receives his first invoice from Fitness Plus for $15. He would like to know if he is now obliged to pay it. A. No, because this is not a circumstance in which silence operates as an acceptance. B. No, because Fitness Plus never made an offer to join. C. No, because an offer made by email is not valid. D. Yes, because Oscar made an offer that entailed that it could be accepted in the event of Johannes's silence. E. Yes, because all of the circumstances taken together indicate that Johannes manifested his assent to a contractual relationship with Fitness Plus.

Fitness is imposing an obligation on Johannes. Silence can't possibly operate as an acceptance here.

Gerard wants to sell his 12 horsepower dual stage snow blower. He posts a notice on the community bulletin board that says: "Snow blower for sale. 12 hp. Dual stage. Good condition. I will accept any reasonable offer. Call Gerard at 617-555-3322." On Monday, Thomas calls Gerard and offers $500 for the machine. They complete the purchase later that day. Gerard then forgets to remove the notice. On Tuesday, Stephanie calls Gerard and offers $400 for the machine. When Gerard tells her that it has already been sold, Stephanie says, "I'm a law student and have been looking for a small claims case to litigate. You are about to become a defendant, bub." Gerard would like to know what he can do to defend against Stephanie. A good defense would be: A. Gerard's notice on the community board merely invited a bargain and was not an offer. B. Gerard was not obliged to keep the offer open because Stephanie did not negotiate that issue with him. C. Stephanie's offer would not have constituted adequate consideration in light of the previous offer for $500. D. Thomas's previous acceptance terminated Stephanie's power of acceptance. E. Stephanie's power of acceptance terminated by lapse of time.

Gerard's original statement was an invitation to make an offer - an advertisement - and not an offer. A is correct.

Axel said to Zack, "I intend to sell you my iPad on Tuesday for $300." Zack said, "That sounds great to me." Then they shook hands. On Tuesday, Axel refused to sell the iPad to Zack. Zack has threatened to sue Axel. Axel would like advice on whether he has legal exposure to Zack. A reasonable answer would be: A. There is no issue of fact, and the court would decide as a matter of law that Axel never made a promise to Zack; as a result, Axel would not be held to have entered into a contract with Zack. B. There would be an issue of fact whether Axel made a promise to Zack and, if the fact-finder concluded he did, Axel would likely be held to have entered into a contract with Zack. C. There is no issue of fact, and the court would decide as a matter of law that Axel made a promise to Zack; as a result, Axel would be held to have entered into a contract with Zack. D. Because Axel's statement constituted a statement of present intention, the case will be dismissed. E. The case will be dismissed as a matter of law because no reasonable person could consider the statement to be an objective manifestation of a commitment.

In context, it is not absolutely clear whether Axel's statement is a commitment or statement of present intention. He uses the word "intend" which sounds like present intention, but they shook hands which made it seem like this, in context, was a commitment. All of the answers except B are far too firm in concluding there is no issue of fact here.

On Sunday, June 21, the Boston Red Sox advertised "Surprise Bat Day" with a full page ad in the early edition of the Boston Globe that said, "The first 10,000 patrons to arrive at today's game will receive a Louisville Slugger with David Ortiz's name embossed on it." By mistake, the bat supplier has only delivered 9,950 bats. An enterprising young lawyer files a class action on behalf of the last fifty of the first 10,000 patrons who did not get their bats. The complaint contains four counts: Breach of Contract, Intentional Infliction of Emotional Distress, Conversion, and Violation of Massachusetts Consumer Protection Act. As to the Breach of Contract count, the best defense for the Red Sox is most likely going to be: A. The advertisement does not constitute a promise. B. The advertisement is only a statement of present intention. C. The claim is barred by the doctrine of laches. D. The promise in the advertisement is unsupported by consideration. E. The claim was wrongfully filed in a law court, and needs to be pursued in a court of equity.

It does appear to be a promise. At this point, the best defense (and the only one of these options) is to argue that the promise of a bat is gratuitous and not supported by consideration. So D is the best answer available here. Note that later in the semester we will talk about promissory estoppel, in which an otherwise gratuitous promise could become enforceable by way of the promisee's reliance, where injustice would otherwise result. I have tried to write reliance out of the question by having it be a surprise (i.e. you'd be going to the game anyway?) but in any event if you thought of it you wouldn't find it in the answers, and you'd revert back to "no consideration."

Mary calls Nancy on the phone and says, "I offer to install 100 square yards of ABC carpeting pursuant to the attached specifications, in exchange for a deposit of $100, and the payment of the balance of $2,000 upon completion." Nancy says in response, "Let me get back to you." Immediately after hanging up, Nancy sends Mary an e-mail that says, "I accept your offer." Before Mary sees the email, she calls Nancy back and says, "I'm sorry, it was all a mistake, I hereby revoke my offer." If Nancy asks you about her legal status vis-à-vis Mary on these facts, the correct advice would likely be: A. She has a binding contract because she relied to her detriment on Mary's offer. B. She has no claim against Mary because she was able to revoke her offer before Nancy's acceptance was effective. C. She has no claim against Mary because her promise was illusory. D. She has no claim against Mary because Mary was able to revoke her offer before Nancy was able to perform. E. She has a binding contract on the terms of Mary's offer.

Mailbox rule. Nancy's acceptance was effective upon it leaving her control via the email. The revocation of the offer came too late. E is correct.

Mary, an acquisitions editor for the Barnyard University Press, meets with Priscilla, a law professor who wants to publish a book about Kantian influences on Bulgarian evidence law. The present manuscript is in long hand because Priscilla could not afford a computer or a typist. Mary says, "I will take it up with my boss, the editor-in-chief, but this sure looks like something we might want to publish." Hearing this, Priscilla borrows $500 from a friend to have the manuscript typed. After Priscilla pays the typist and receives back the manuscript, Mary calls and says, "What a disappointment! I didn't realize what a hot topic this was. We already have a book under contract, and we won't be able to go forward with yours." In the ensuing lawsuit Priscilla brings against Barnyard University Press, Barnyard's best argument in defense is: A. Priscilla's reliance on Mary's statement was unreasonable under the circumstances. B. It was unreasonable for Priscilla to believe that a publisher would want a book on Kantian influences on Bulgarian evidence law. C. Mary's statement was not a manifestation of willingness to enter into a bargain so made as to justify Priscilla in understanding that her assent to the bargain was invited and would conclude it. D. Priscilla had no reason to believe Mary's statement was true. E. Justice does not require Barnyard to reimburse her for the typing.

Mary's statement wasn't an offer under R2K 24. Hence, R2K 87(2) doesn't apply. C is correct. A could be correct for purposes of 87(2) if the statement had been an offer, but it is a fact issue and we don't know the facts.

Kim and Midori sign a contract under which Kim is to act as Midori's sales agent for a new line of artisanal fountain pens. The contract provides that Kim is to be Midori's exclusive agent, and that Kim is to "do the best I can." A week after signing the contract, Midori agrees with Kei that Kei may also be a sales agent for the pens. Kim sues Midori for breach of contract. Midori's best defense will be: A. The consideration was adequate. B. The consideration was inadequate. C. Kim's promise was illusory. D. Kim never made a promise. E. There was no consideration.

Midori's best argument is that the contract didn't actually require Kim to do anything. We really don't have enough facts to determine if consideration is the issue in the contract between Kim and Midori. It looks like a bargained-for exchange, and adequacy of consideration is not favored as a defense. Akin to the "Al and Buster" example, the best argument here is the illusoriness of the promise.

Christopher, a construction contractor, sent by overnight delivery a written note to Juanita, an electrician, that read: "I hereby offer the electric installation subcontract at 154 Richdale for $30,000; work to begin October 15." Juanita received the written note on September 21. Juanita did not do anything with it until October 7, at which point she sent an email to Christopher stating, "I accept your offer." Christopher immediately replied, "I am sorry but just yesterday I hired a different electrician." Juanita has asked you whether she has a sound legal claim against Christopher. A. Yes, because she had the power of acceptance on October 7. B. No, because she did not have the power of acceptance on October 7 C. No, because Christopher's response on October 7 terminated Juanita's power of acceptance. D. No, because Christopher relied to his detriment on Juanita's failure to respond. E. Only if the amount of time she allowed to elapse was reasonable under the circumstances.

One way that the power of acceptance can terminate is by lapse of time, which is going to be a reasonable fact issue. D is MSU. In C, Christopher's revocation came after the purported acceptance. If the acceptance were valid, the revocation would have no effect. The real issue is E - did the P/A terminate by lapse of time?

You are representing Mega Corporation in connection with the possible purchase of Ultronic Corporation's factory in the State of Euphoria. The draft purchase agreement provides that Mega may terminate the agreement and not make the purchase if it pays a fee to Ultronic of $250,000. Hence, Mega Corporation's contractual liability seems to be capped at $250,000. Mega Corporation's CEO, Gretchen, is okay with that. But she attended one semester of law school and recalls something about "promissory estoppel" under which promises she might have made to Ultronic during the negotiations, but not written into the agreement, might be binding on Mega Corporation if Ultronic were justifiably to rely on them. The way you should allay Gretchen's concern is to: A. Assure Gretchen that the courts never apply promissory estoppel doctrine in commercial transactions. B. Offer Gretchen your opinion that, even if there were another written or oral promise made or inferred during the due diligence investigations, and even if Micro Corp were to rely on it, the nature of sophisticated law practice is such that a court would not find it necessary in the interest of justice to enforce the promise. C. Include a provision in the draft purchase agreement stating clearly that the written agreement is the entire agreement between the parties, that no other written or oral agreements bind Mega, and that Ultronic acknowledges it is not entitled to rely on any promise, representation, or other understanding not included in the written document. D. Structure the transaction as a charitable pledge. E. Tell Gretchen not to speak to anybody at Ultronic.

The answer is to draft a merger clause in the agreement making it clear that the only agreement between Mega and Ultronic is what is in the written agreement. C is correct.

Joseph's Rent-to-Own, Inc., located in one of the poorer neighborhoods of a large city, uses form contracts under which customers "rent" home appliances on a weekly basis. If the customer completes the contract, which is usually a two-year term, the customer ends up paying four to five times the normal retail price of the appliance. If you were representing a client who had rented a refrigerator under one of these contracts and now wished to rescind it, the best legal theory under these facts would be: A. The consideration is adequate. B. The bargain is unconscionable. C. The consideration is inadequate. D. The customer never made a promise. E. There was no consideration.

The better tack is not to fight the consideration issue, because there was a deal. It was just a really bad deal. So B, unconscionability is the best argument.

Wilbur said to Ed, "I will pay you $6,000 if you paint my house by June 30." Ed didn't reply. On June 25, Ed was driving his van down Wilbur's street. Just before Ed turned the van into Wilbur's driveway, Wilbur flagged down Ed. Ed rolled down his window. Wilbur said, "My dog had to have emergency surgery to remove a tennis ball from her stomach, and it cost me the $6,000 I was going to pay you. You can't paint my house." If Ed were to sue Wilbur for breach of contract, Wilbur's best defense would be: A. Wilbur revoked his offer before Ed tendered or began the invited performance. B. Equity should relieve Wilbur of his obligation to honor the contract because of the emergency. C. Ed's action constituted a counter-offer, which acts as a rejection of the original offer. D. There was no consideration for Wilbur's promise. E. Wilbur's original statement to Ed did not constitute an offer.

The facts don't tell us whether Jupiter relied or not, so B is MSU. There is no indication of a bargain here, hence A and E are wrong. The question is what defenses the executor should interpose, and there is no reason not to assert that it was a gratuitous gift promise AND that Octavia revoked it before she died.

On Friday, Barry and Yolanda were on the third floor landing, each standing in front of their doors with their keys in their hands. Barry said, "I have this amazing unopened bottle of 24-year-old Lagavullin scotch. It's worth at least $150." Yolanda replied, "I'd love to buy it." Barry said, "I will sell it to you tomorrow for $100." Yolanda responded, "Let me think about it." That evening she sent Barry a text: "Will buy scotch for $100 but only if in original packaging." Barry did not respond. On Saturday, Yolanda knocked on Barry's door. He opened it, looked at Yolanda, and said, "Get lost." If Yolanda were to sue Barry, which of the following theories would be the best one for Barry to assert in defense based only on the foregoing facts? A. That Barry and Yolanda actually never made promises to each other about the scotch. B. That Yolanda was under duress to accept the deal. C. That this was a social understanding and not an enforceable bargain. D. That Yolanda gave up going to her mother's house on Saturday and therefore relied to her detriment. E. That agreements regarding bottles of Lagavullin scotch are unenforceable.

The point of this question is to emphasize that this is an "contract or no contract" problem, in which the offer and acceptance rules are relevant, and not a "gift vs. bargain" problem in which the consideration rules are relevant. A is correct.

Abigail and Zack were sitting in the Euphoria Bar on March 12. Zack was on his third vodka martini (shaken not stirred). Zack said to Abigail, "I bought a new Tesla for $75,000 three weeks ago, but I hate it. I just want to get rid of it. I'd be happy to sell it for half - $37,500 - just to be done with it." Abigail said, "I'll pay you $37,500 for it." On a bar napkin, Zack wrote out "Tesla, Zack to Abigail, price $37,500, delivery on March 15", and both Zack and Abigail signed it. Then Zack need to use the men's room, and he got off the bar stool and stumbled but managed to catch himself before he fell. On March 15, Abigail called Zack, told Zack she had a cashier's check for $37,500 and was ready to take delivery. Zack refused, claiming they never really had an enforceable deal. Your advice to Abigail about the likely outcome of a lawsuit against Zack for breach of contract should be: A. Zack will be entitled to void the transaction under Restatement (Second) §16 because Abigail had reason to know that by reason of intoxication Zack was unable to understand in a reasonable manner the nature and consequences of the transaction. B. Zack will be bound to the transaction because of the rule that he is legally bound to the contract not by his unexpressed intentions by the reasonable interpretation of his words and actions. C. A court will not enforce the deal because $37,500 is insufficient consideration for a three-week-old Tesla that retails for $75,000. D. Zack will win because words written out on a bar napkin cannot reasonably be considered a manifestation of an intention to act made so as to justify an understanding in another that a commitment has been made. E. Predicting the outcome requires an assessment of the factfinder's possible conclusions on the level of Zack's sobriety; if the conclusion is that Abigail should have reasonably been able to tell that he was too drunk to know what he was doing, she ought to lose; otherwise, if she reasonably should have thought Zack knew what he was doing, she ought to win.

The point of this question is to emphasize the difference between a factual issue and a legal issue. A and B are wrong because there is no way for you to determine based on this evidence whether Zack was so drunk that he couldn't understand. The three martinis and the stumble are possibly bits of evidence he could use to prove his drunkenness, but it's an open issue, and if you draw a conclusion one way or the other, you are engaged in MSU. C and D are clearly wrong. E is correct, reflecting that there are two possible legal consequences (if X, then Y), depending on what X is. And, as pointed out in class, you engage in trying to resolve X, you are very likely on the wrong path.

Gino sold 100 shares of common stock in High Flying Corporation to Thelma. Gino said to Thelma, "As sure as the earth orbits the sun in an ellipse, I can commit that the value of this stock will double in a year." At the end of the year, the stock has not increased in value. Thelma has come to you for advice about whether she has a good contract claim against Gino. It would be reasonable for you to tell her: A. "The statement is clearly one of opinion, and the court would issue a judgment in favor of Gino as a matter of law." B. "The statement is clearly one of promise, and the court would issue a judgment in your favor as a matter of law." C. "Your claim will be barred by the doctrine of laches." D. "Whether this constituted an opinion or a promise is a fact issue. You are only going to win if a fact-finder concludes, in the context of your transaction with Gino, that this really was a promise." E. "The outcome will depend on whether Gino had a subjective intention to make a commitment, whether or not he expressed it."

The question is whether the statement is so clear on its face as not to raise any factual issue about how it could be received by another. It uses the word "commit" which sounds like a promise, but it is on a subject, the future performance of stock, that most people would think is necessarily be a matter of opinion. D is the best response. In a situation like this, you'd be skeptical that Thelma has a claim based on "promise," and would want to tell her that she is only going to win if there is something about Gino or what he knows that could allow her to infer it was a commitment.

The general manager of a local public television station in the State of Euphoria has posed the following problem to you. About 25% of the people who sign and return pledge cards in the station's direct mail campaign never actually make the contribution. The general manager concedes that it would be a stretch to say that the station actually makes commitments based on single returned pledge card. It would be prudent to advise the general manager that: A. Recovery is possible because it is a charitable subscription as opposed to a mere promise, and charitable subscriptions are enforceable even when there has been no consideration or reliance. B. Recovery is possible on the theory of collective promise, in which the court infers reliance based upon an imputation of the state of mind of the signer of the pledge card. C. Recovery is possible because there was an enforceable contract. D. Recovery is possible because the doctrine of promissory estoppel applies when injustice would arise from the failure to enforce a promise. E. Recovery is unlikely unless the courts in Euphoria have adopted the rule in Section 90(2) of the Restatement (Second) of Contracts allowing charitable subscriptions to be recoverable even without consideration or reliance.

There is a Restatement provision (90(2)) providing that charitable contributions could be enforceable even without reliance, but the courts in Euphoria would have to have adopted it as law. E is correct.

Xerxes sent by overnight delivery a letter to Catherine that read: "I agree to buy the building at 5 Main Street you have listed for sale on Coldwell Banker's website at the price set forth there." Catherine received the letter on September 21 and that same day sent Xerxes an e-mail message stating that the offer was accepted at a price of $595,000 (the price then shown on the web page). On September 22, before receipt of Catherine's e-mail (which managed to get lost in Xerxes's junk mail folder), Xerxes telephoned Catherine and said, "I hereby revoke my offer." Catherine protested to no avail. Xerxes proceeded to search his e-mail files and found Catherine's e-mail on September 23. Xerxes has asked your opinion whether he is likely bound to a contract to buy 5 Main Street as of September 24. A. Yes, because there was a promise and consideration. B. Yes, because Catherine accepted the offer before Xerxes attempted to revoke it. C. No, because the offer and acceptance weren't in writing. D. No, because the offer was one that could be only be accepted only by delivering title to the property. E. No, because Xerxes never agreed to pay $595,000.

There might be an issue about the point at which Ed tendered or began the performance, but nevertheless, Wilbur's best defense is A, which is that he revoked before Ed tendered or began.

Xerxes made an offer to purchase Darius's home on a standard form available from a local title insurance agency. Xerxes specified that the purchase price was $300,000 and promised that the offer would remain open until 5:00 pm on Thursday, April 22. On Thursday, April 22, Xerxes happened to find another house (being sold by Ned) that he liked better. At 4:12 pm, Xerxes called Darius to tell say that the $300,000 offer was revoked. Darius said, "I beg to disagree. It's not 5:00 pm yet and I accept the offer." Xerxes refused to buy Darius's house. In Darius's suit against Xerxes for specific performance, the likely result will be: A. Darius wins because Xerxes promised that the offer would not expire until 5:00 pm on Thursday, April 22, thus creating an option contract. B. Darius wins because his acceptance was, for all intents and purposes, contemporaneous with Xerxes's attempt to revoke the offer. C. Darius wins because Xerxes's purported revocation of the offer was not in writing. D. Xerxes wins because Darius no longer had the power of acceptance when he attempted to accept the offer. E. Xerxes wins because Darius's acceptance was not a mirror image of the offer.

This has the appearance of an option because of Xerxes's promise to keep the offer open for a specified period. But there is no consideration for the option, and so the promise is gratuitous. Xerxes retains the right to revoke the offer, thus terminating the power of acceptance. He did so before Darius accepted, and thus D is correct.

Boston Builders, Inc. ("BBI") is a large paving contractor. In January, BBI learned about a project to rebuild two miles of the southbound lanes of Interstate 93 south of the New Hampshire border. Before putting in its bid to the Massachusetts Department of Transportation (the project manager) for the entire building project, BBI invited bids on the steel guard rails, with the contract to be awarded on or before March 31. On August 15, Sullivan Steel submitted a bid to BBI to supply the guard rails for a total price of $500,000. The bid stated that it would remain open until March 31. On March 30, BBI's president contacted Sullivan Steel's bid manager, and stated that BBI was willing to award the contract to Sullivan Steel, but only at a contract price of $400,000. Sullivan Steel's bid manager replied, "No, that won't work, and we withdraw our bid." The next day, BBI sent Sullivan Steel a written notice to the effect that the $500,000 guard rail bid had been accepted. Sullivan Steel's president has just left you an email that says, "We don't want to do business with these squirrely characters. Are we bound to a contract?" You should tell him: A. Sullivan's offer to supply guard rails was one that it should reasonably have known would induce action or forbearance on BBI's part before acceptance, that did in fact induce such action, and which will be binding as an option contract in order to avoid injustice. B. Sullivan's revocation of its offer was ineffective because it was not a mirror image of the offer itself. C. The doctrine of equitable estoppel will apply to estop Sullivan from denying the effect of the bid it had submitted in the past. D. Sullivan's withdrawal of its bid should have the effect of relieving Sullivan of any further obligation to BBI. E. Sullivan does not need to perform because, even though there was an agreement, it was not binding on account of a lack of consideration.

This is a case of "bid chopping." BBI can't hold the bid open as an option and at the same time be negotiating a lower price against it. So when Sullivan withdrew, that should end its obligation. D is correct.

You have received a complaint alleging that your client, Spacely Sprockets, Inc., breached a contract with Jetson Fuel Supply Company. After reading all of the allegations and doing some research, you conclude that, even if all of the factual allegations in the complaint were true, they still wouldn't satisfy the elements of a breach of contract. The procedural step you could reasonably take at this point would be: A. Asserting an affirmative defense of lack of capacity on the part of Jetson Fuel Supply Company. B. Answering the complaint and denying all of the allegations as being untrue. C. Filing a motion to dismiss the complaint for failure to state a claim on which relief could be granted. D. Filing a counterclaim against Spacely Sprockets alleging that it failed to state a claim on which relief could be granted. E. Calling counsel for Jetson Fuel Supply Company and threatening to file a motion for costs unless the complaint were amended to state a legitimate cause of action.

This is a civil pro question. The way you test the legal sufficiency of the allegations is to file a motion to dismiss for failure to state a claim. C is correct.

The Flintstone family moved to Rock Vegas five years ago. They enrolled their daughter, Pebbles, in the exclusive Ex Ante Prep School. In addition to paying tuition, the Flintstones have since made a voluntary contribution of $5,000 every year to the school's Annual Fund. Each time, Mother Flintstone has attached the check to a note that says, "With gratitude for accepting our family. We look forward to being members of the Ex Ante community and making similar contributions for years to come." This year, Pebbles is entering the 10thgrade (that is, she has three more years at Ex Ante). The Flintstones have announced that they are not making any more contributions beyond the tuition. This year, the school needs to refurbish the swimming pool, and was counting on the Flintstone's contribution. Grover Slate, the school's headmaster, has asked you to identify the biggest hurdles to a successful legal claim against the Flintstones for this year's $5,000. You should advise Grover: A. There was no quid pro quo consideration for Mother Flintstone's promises, and therefore there was no bargain. B. Promissory estoppel only applies in family circumstances, and this is a commercial transaction. C. It would be necessary to establish both that Mother Flintstone's notes were promises and that they reasonably induced reliance on the part of the school. D. There was no reliance as a matter of law. E. There was no promise as a matter of law.

This is a gift case so it would have to depend on P/E, not consideration theory. The question is whether anybody could reasonably infer a promise and reliance on the promise, either as a matter of law or fact. C is correct.

Benjamin said to Yolanda, "I hereby offer to purchase your 1988 Buick Skylark for $400. I promise to keep this offer open until you show up at my house this coming Friday at 1:00 p.m." At noon on Friday, Benjamin happened to see Yolanda getting out of the 1988 Buick Skylark in the parking lot of the neighborhood grocery store. Benjamin shouted at her, "I've had second thoughts about buying the car. Forget it." Yolanda has now sued Benjamin for breach of contract. Your advice to Benjamin about the most likely result is: A. Yolanda ought to win because she began performance of the contract. B. Yolanda ought to win because Benjamin promised to keep the offer open until Friday at 1 p.m. C. Yolanda ought to win because she relied on the offer to her detriment. D. Benjamin ought to win because his revocation of the offer was almost a mirror image of the offer itself. E. Benjamin ought to win because he had the right to revoke the offer before Yolanda accepted it.

This is a review of the mailbox rule. B is correct.

Maxine wants to buy Pegasus, a nine-year-old thoroughbred horse, from Octavius, who has had an ad about Pegasus posted on the stable bulletin board for the last several months. On Wednesday, Octavius says to Maxine, "I offer to sell Pegasus to you for $15,000, and the offer is open until Friday at noon." On Thursday, Maxine comes to the stable thinking she is ready to accept Octavius's offer. When Maxine arrives, she sees that Pegasus's stall is empty and the ad has been taken down. Maxine asks Bonnie, the stable manager, "Where is Pegasus?" Bonnie replies, "Oh, late last night, Octavius came in, put Pegasus in a trailer, packed up the rest of his equipment, and said he sold Pegasus to his step-brother Romulus." On Friday, at 11:58 a.m., Maxine calls Octavius's cell phone and gets his voicemail. She says, "Octavius, I am accepting your offer and have left $15,000 in escrow with Bonnie. Please immediately return Pegasus to the barn." Only then does Maxine call you to find out if she has a claim against Octavius. The best advice is: A. "Your power of acceptance didn't expire until noon on Friday, and you exercised it in a timely fashion." B. "Octavius never communicated directly with you to revoke his offer, so your power of acceptance never terminated." C. "The mailbox rule was in effect, and since your acceptance preceded Octavius's revocation, you had an effective contract to buy Pegasus." D. "Your right to accept Octavius's offer most probably terminated when Bonnie spoke to you on Thursday." E. "You had no right to purchase Pegasus because the mailbox rule says you need to accept by way of a letter inserted into a mailbox."

This is a review of the mirror-image acceptance rule. D is correct.

Max and Erma signed a document that read, "Erma has an open offer to purchase Max's one-half acre lot at 152 Main Street. The total purchase price will be $100,000. This offer will expire on June 5." On June 3, Erma sent Max a note that read, "I choose not to purchase the lot. Thank you for your courtesy." Later that day, having received Erma's note, Max signed an agreement to sell the lot to Francis for $125,000. On June 4, Erma sent Max a note that read, "I have changed my mind and now choose to purchase the lot." Upon Max's refusal to sell, Erma sued Max. What is Max's best defense to the claim? A. Max has no good defense to the claim, since the option had not expired when Erma sent her second note. B. Erma's rejection of the open offer on June 3 ended her power of acceptance, and she had no right thereafter to accept. C. Max's acceptance of the higher offer was reasonable, given all of the circumstances. D. Erma's failure to put $100,000 in escrow gave Max reasonable grounds to be concerned about her ability to complete the transaction. E. Erma's June 4 was not a mirror-image acceptance of the offer.

This is a review of the rule that rejection terminates the power of acceptance. B is correct.

Audrey sent a handwritten note to Zack as follows: "I offer to pay you $5,000 to paint my house with Benjamin Moore Premium Paint, with the work to be commenced on April 1 and completed by April 30. The terms of payment will ¼ upon your acceptance of this offer, ¼ on April 15, and the balance upon completion of the job to my reasonable satisfaction. Please respond." Zack responded with an email note as follows: "I accept your offer, but for the same price, I will use Sherwin Williams Extra Premium Paint, which will do a better job." Audrey did not respond. On April 1, Zack showed up at Audrey's house to find another painter starting the job. Zack has asked you whether he has a good legal claim against Audrey. You should tell him: A. Yes, because his acceptance was materially identical to the offer. B. Yes, because his acceptance provided a significant benefit to Audrey over the terms of her original offer. C. No, because Audrey's offer was vague. D. No, because his acceptance was not a mirror-image of the offer. E. No, because an email response to a handwritten letter operates as a rejection.

This is a simple revocation of an offer before acceptance. The promise to keep the offer open is gratuitous. There is no option, so B is incorrect. Nor did Yolanda show up at Benjamin's house so A is incorrect. C is MSU. D is utter nonsense. E is correct.

Paula was a real estate agent working for the Darla Dare Agency, Inc. ("DDAI"). Darla was the president of DDAI. The normal arrangement between DDAI and its agents was that DDAI and the agent split evenly all commissions received as the result of the sale of a home. In January 2016, in order to increase volume, Darla offered a bonus program which read as follows: "For the year 2016, DDAI and its agents will split the first $100,000 of the year's commission revenue evenly as usual. As a bonus, however, agents will receive an additional 25% of any commission revenue in excess of that first $100,000. That bonus will be paid to anybody who is still an agent of DDAI as of October 31, 2016." In the first six months of 2016, Paula generated $300,000 of commission revenue, and had duly received her 50% share. On June 30, 2016, she quit DDAI to go to work for Century 21. Shortly after October 31, 2016, Paula called you to ask whether she had a good claim against DDAI for $50,000, representing the additional 25% of her commission revenue above $100,000. Your opinion is: A. Yes, because the offer did not invite a promise as acceptance, and an option contract was created when Paula began the invited performance, so that DDAI did not have a right to withdraw the offer before October 31, 2016. B. Yes, because a bilateral contract was created when Paula accepted the offer by beginning her performance. C. Yes, because a promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. D. No, because she wasn't still an agent of DDAI on October 31, 2016. E. No, because where an offer invites acceptance either by promise or performance, the contract should be construed as bilateral, and Paula never accepted by way of a return promise.

This is a test of your understanding of R2K 45. Beginning performance under a unilateral contract offer creates an option under which the offeree has the right to accept, but the offeree has to complete the performance to effect the acceptance. Because Paula wasn't still an agent on Oct. 31, she didn't perform as required. D is correct.

Alice calls Chris, the painter, and says, "Can you be out here to paint the living room and both bedrooms by September 4? If you can finish it by then, we'll pay you your normal hourly rate plus all expenses." Chris says, "Let me check my calendar and get back to you." Chris determines that he has uncommitted days and is free to paint on September 2 and 3, and sends Alice an e-mail that says, "Can do. Will be there on Sept. 2." Unfortunately, the e-mail ends up in Alice's spam folder and she never sees it. When Chris shows up on September 2, another painter is already there, and Alice refuses to let him in the house. In Chris's suit against Alice for breach of contract, what is the most likely result? A. Chris wins, because there is some doubt whether Alice's offer invited Chris to accept by promise or by rendering the performance; thus Chris was free to choose his mode of acceptance, and his e-mail constituted an effective acceptance. B. Chris wins, because he relied on Alice's offer to his detriment, and it would be unjust not to enforce it. C. Alice wins, because Chris's acceptance would only have been effective on her receipt of it, and she never received it. D. Alice wins, because Chris had uncommitted days on his calendar, and therefore did not suffer a detriment in relying on the offer. E. Alice wins, because under the mailbox rule an acceptance must be placed in a mailbox to be effective.

This is an application of R2K 32. A is correct.

Achilles and Ajax executed a written agreement that stated as follows: "Achilles has an option to purchase Ajax's five-acre lot located at 137 Priam Road, Troy for a purchase price of $500,000. This option will expire on December 31 at 5:00 pm. The consideration for the option is $100." Achilles never paid the $100 to Ajax. On December 31 at 4:30 pm, Achilles came to Ajax's office with a cashier's check for $500,000. Before Achilles could say anything, Ajax said, "I'm sorry but I have determined that I do not wish to sell the property." Achilles replied, "Here is your money; please prepare and sign a deed." In Achilles's suit against Ajax, the likely result will be: A. Achilles wins because he and Ajax had a written option agreement that was valid for having recited a consideration for the option, even if Achilles never paid the $100. B. Achilles wins because Ajax accepted by remaining silent for so long. C. Achilles wins because Ajax's statement on December 31 was not a valid rejection of the offer. D. Ajax wins because Achilles never paid the consideration for the option; accordingly, Achilles's power of acceptance terminated when Ajax made his statement on December 31 before Achilles accepted. E. Ajax wins because Achilles's purported acceptance was not a mirror image of the offer.

This is an application of the "safe harbor" for option agreements under R2K 87(1). Even though Achilles never paid the consideration, nevertheless the agreement recited a one, and that is all R2K 87(1) (per the text and the comments) requires. Thus A is correct.

Associated Construction Corporation ("ACC") is a general contractor in the business of building medium-sized office buildings. In July, ACC learned of a new construction project at 55 Harbor Square, owned by Harbor Partners. Before putting in its bid to Harbor Partners for the entire building project, ACC invited steel suppliers to bid on a contract to supply the girders, with the contract to be awarded on or before December 31. On August 15, Sullivan Steel submitted a bid to ACC to supply the girders for a total price of $300,000. ACC did not respond, but instead showed the bid on August 30 to McIntyre Steel, who submitted a bid to supply the girders for $225,000. On September 30, Harbor Partners awarded the building contract for 55 Harbor Square to ACC. On November 30, McIntyre Steel went bankrupt, and notified ACC it would be unable to supply the girders. On December 10, Sullivan Steel withdrew its bid. On December 11, ACC notified Sullivan Steel that it had been awarded the contract for $300,000. Sullivan Steel had committed all of its resources to other projects and refused to sell to ACC. The president of Sullivan has asked you whether Sullivan is exposed to a claim from ACC. Your best assessment is: A. The classical rules of offer and acceptance will apply, and Sullivan had no right to terminate ACC's power of acceptance. B. Sullivan's offer might have been considered an option and therefore non-revocable, except that ACC's inequitable conduct in using the bid to obtain a lower one from McIntyre ought to relieve Sullivan of any obligation. C. Sullivan's offer to supply girders was one that it should reasonably have known would induce action or forbearance on ACC's part before acceptance, that did in fact induce such action, and which will be binding as an option contract in order to avoid injustice. D. ACC's notice to bidders invited acceptance by performance, and Sullivan accepted by submitting a bid. E. ACC and Sullivan entered into a binding bilateral contract, which was evidence by mutual promises from one to the other.

This is an instance of bid-shopping in which ACC loses the option created under 87(2). B is correct.

Victoria is standing by the coffee machine at work. She says out loud, "For $100, I'd take early retirement right now and get out of this zoo." Her boss, Edward, happens to be walking by and hears what she has said. He takes $100 out of his wallet and says, "Consider yourself retired now." Victoria replies, "Oh, Eddie, that's not nearly enough. I'd need at least $1,000." So Edward takes another $900 out of his wallet, hands it to her, and has security escort her out of the building. When Victoria asks your advice, a correct thing to say would be: A. "The whole thing sounds like a joke, and you ought to win a lawsuit to be reinstated, but making it sound like you were really bargaining with him over the amount wasn't the smartest thing to do." B. "Don't worry. The whole thing was clearly a joke and it is almost certain that a judge who hears the case will see it that way." C. "You are clearly out of luck. You are legally bound to a contract not by your unexpressed intentions but by the reasonable interpretation of your words and actions, which here unambiguously indicated you wanted to retire." D. "You will win because objectively speaking any deal about retirement has to be made formally in an office with a representative of HR present, and not in casual conversation by a coffee machine." E. "Security marching you out of the building constitutes duress, and therefore you could not legally have entered into a binding contract."

This is an instance of the facts lying somewhere between a clear joke (in which case the joke rule applies) and a bargain (in which case the bargain rule applies). If you have to predict what will happen, A is the best answer because it acknowledges the two possible rules and makes a sensible assessment of the likely result. B, C, and D fail to recognize the possibility of another rule applying. E makes no sense because getting marched out of the building had nothing to do with the existence of an agreement.

In the State of Euphoria, there is a unique cause of action called "defibrillation of contract." If somebody alleges that you defibrillated a contract, the possible defenses you might assert include the following: Restitution, Bursitis, Loquacity, and Indigestion. Ren sued Stimpy, alleging that Stimpy had defibrillated a contract. Stimpy interposed all four possible defenses. At a trial without a jury, the court found that Stimpy had established the defense of Indigestion, and entered judgment on Stimpy's behalf. The most likely explanation for why the court did not address the defense of Loquacity is: A. Since Stimpy had won on Indigestion, there was no need to address the merits of the Loquacity defense. B. In Euphoria, if you can show Indigestion, you have implicitly also shown Loquacity. C. Stimpy did not have standing to assert Loquacity. D. Defibrillation of contract is not a real cause of action, so courts don't have to address hypothetical defenses. E. The State of Euphoria never adopted the Uniform Commercial Code.

This is another instance of it only taking one successful defense to defeat a claim. It isn't necessary to prevail on the others. A is correct.

Abigail and Zack were sitting in the Euphoria Bar on March 12. Zack was on his third vodka martini (shaken not stirred). Zack said to Abigail, "I bought a new Tesla for $75,000 three weeks ago, but I hate it. I just want to get rid of it. I'd be happy to sell it for half - $37,500 - just to be done with it." Abigail said, "I'll pay you $37,500 for it." On a bar napkin, Zack wrote out "Tesla, Zack to Abigail, price $37,500, delivery on March 15", and both Zack and Abigail signed it. Then Zack need to use the men's room, and he got off the bar stool and stumbled but managed to catch himself before he fell. On March 15, Abigail called Zack, told Zack she had a cashier's check for $37,500 and was ready to take delivery. Zack refused, claiming they never really had an enforceable deal. Your advice to Abigail about the likely outcome of a lawsuit against Zack for breach of contract should be: A. Zack will be entitled to void the transaction under Restatement (Second) §16 because Abigail had reason to know that by reason of intoxication Zack was unable to understand in a reasonable manner the nature and consequences of the transaction. B. Zack will be bound to the transaction because of the rule that he is legally bound to the contract not by his unexpressed intentions by the reasonable interpretation of his words and actions. C. A court will not enforce the deal because $37,500 is insufficient consideration for a three-week-old Tesla that retails for $75,000. D. Zack will win because words written out on a bar napkin cannot reasonably be considered a manifestation of an intention to act made so as to justify an understanding in another that a commitment has been made. E. Predicting the outcome requires an assessment of the factfinder's possible conclusions on the level of Zack's sobriety; if the conclusion is that Abigail should have reasonably been able to tell that he was too drunk to know what he was doing, she ought to lose; otherwise, if she reasonably should have thought Zack knew what he was doing, she ought to win.

This is identical to the one question Unit 1a mini-quiz. This is a fact question. E is correct.

Valerie is a house painter. David has just said to her, "If you paint my house in two weeks, I'll pay you $10,000." Valerie wants to lock David immediately into a binding commitment. What is her best strategy? A. Wait two weeks and then paint the house. B. Send an email immediately that says, "I accept your offer to paint your house for $10,000." C. Take steps to buy paint and other supplies so as to create a record of detrimental reliance. D. Send an email immediately that says, "I hereby tender performance of the contract." E. Send an email immediately that says, "I hereby acknowledge your offer and my intention is to begin painting in two weeks.

This is pretty clearly ONLY inviting acceptance by performance. So to insure there is an acceptance, do what the offer requires. A is correct.

Isaac was an "at-will" sales agent of Rocket Corporation. This means that Isaac could quit at any time, and Rocket Corporation could terminate him at any time. On March 1, Rocket Corporation announced that all sales agents were henceforth subject to a non-compete agreement of six months in the event that they quit their jobs. On April 1, Isaac quit his job at Rocket Corporation, and went to work for a competitor, Missile Corporation. The president of Rocket Corporation now wants to know whether there is a reasonable basis for suing to enjoin Isaac's continued employment with Missile Corporation. You tell him that, if any theory is going to succeed, it will have to be something like: A. "The non-compete agreement isn't void because it is not against public policy." B. "Isaac agreed to the non-compete." C. "Isaac has a case of laches." D. "Isaac's continued employment on March 2 constituted consideration for the non-compete agreement." E. "Isaac's showing up for work on March 2 constituted a promise."

This reflects the two cases we reviewed at the end of the unit. If this is a state like Pennsylvania, no theory is going to succeed because there are no facts suggesting that there was any consideration for the non-compete other than continued employment. You would have to hope you are in a state like Michigan that holds there to be consideration in a change to the terms of at will employment by the employer simply continuing the employment. Hence, D is correct.

As to the "Conversion" count in the complaint referred to in Question 1, the reason it ought to be dismissed is: A. The fact there was a contract is a valid defense to the conversion claim. B. Conversion is not appropriately the subject of a class action. C. Nothing in the facts suggests that the Red Sox stole anything. D. Conversion is an equitable claim that can only be pursued in a court of equity. E. The conversion claim is barred by the statute of limitations.

This requires that you know what "conversion" means. C is correct. I'm willing to say that when you read Question 1, you should have already asked yourself, "Why conversion? There's no indication the Red Sox stole anything.

Sandy Student applied for a high-paying summer internship at United Corporation. She needed one recommendation from a professor by the deadline. She asked the notoriously absent-minded Professor Pompous if he would write the recommendation and send it to United. Pompous said,"Of course, Sandy, I promise to do it right away!" Student did not ask any other professors to submit a recommendation. Pompous forgot to send the recommendation, the result of which is that Student did not get the high-paying internship and had to settle for a much less remunerative summer job. Pompous would now like your advice as to whether he has legal exposure on apotential claim from Student for the lost income. A good answer would be: A. There is a valid claim for breach of contract based upon the promise made by Pompous and bargained-for consideration in the form of a detriment to Student. B. The doctrine of promissory estoppel would support a claim that Pompous's promise was binding if a court concluded that Student reasonably relied on it and injustice could be avoided only by its enforcement. C. There is no valid claim because Student unreasonably relied on Pompous in view of his absent-mindedness. D. There is no valid claim because Student was unreasonable in seeking only one recommendation, and hence there is no injustice that would arise if the promise were not enforced. E. There is no valid claim, because even if there were a promise, and even if Student did rely on it, courts will not enforce such promises because of the chilling effect on members of the academy.

This would arguably be the basis for a P/E claim. A is wrong because there is no quid pro quo or bargain. C and D ask you to resolve a fact issue. E is silly. B is correct.

Sam Geezer, aged 60, who had no plans for early retirement, had worked for Grateful Foods, Inc., for twenty years. One day, he had a conversation with the company's president, Barry Grateful. Sam said, "Someday I would love to retire, move to Tuscany, and buy a vineyard." Barry was panicked because he did not want to lose Sam. A month later, Barry handed Sam a written and signed resolution of the company's Board of Directors stating that if Sam worked for at least five more years, when and if Sam should decide to retire (that decision being solely at Sam's discretion), Grateful Foods, Inc. would pay him a $6,000 per-month pension for the rest of his life. (At that time, Grateful Foods, Inc. had no established retirement plan for its employees.) Five years later, Sam retired, moved to a small village between Florence and Lucca, Italy, and purchased a vineyard that produced 2,000 bottles a year of top-flight Chianti. Sam received the promised $6,000 monthly pension from Grateful Foods, Inc., for two years. At that point, Sam, now responsible for employing six Tuscans and shipping a lot of wine, and thus unable to move back to the United States, received a letter from Grateful Foods, Inc., advising him that the pension would cease immediately because of recessionary budget constraints affecting in varying degrees all managerial salaries and retirement pensions. In a suit against Grateful Foods, Inc., for breach of contract, Sam will probably A. Lose, because the Board's promise to him of a lifetime pension to an employee-at-will was an example of "past consideration" and therefore an unenforceable gift promise. B. Lose, because the Board's resolution was merely a statement of present intention and not a promise. C. Win, because he timed his decision to retire and to buy the vineyard in reasonable reliance on the Barry's promise to him of a lifetime pension. D. Win, because he retired from the company pursuant to a contract under which the promise of the lifetime pension was bargained-for consideration. E. Win, because even though Sam never signed anything, this was an implied-in-fact contract.

Unlike the Hayes case, this is an instance in which Sam and Grateful Foods made a deal, plain and simple. D is correct.

Professor Lipshaw was working at his desk in his home near Porter Square in Cambridge, Massachusetts. There came a knock at the front door, which caused his two dogs to bark and howl loudly. The professor walked downstairs and opened the door to find Jessica, a volunteer for RedPeace, an organization dedicated to fighting the blight of too-loud music spilling out of earbuds in subway cars on the MBTA Red Line between Porter Square and Park Street. Because the dogs wouldn't stop barking, and because Jessica didn't appear to want to leave, Professor Lipshaw quickly signed filled in the blanks and signed a RedPeace pledge card in which he committed to contribute $100 to RedPeace, as the card recited in its boilerplate, "in consideration of the undersigned's desire to commute in peace and quiet." Two weeks later, a bill arrived from RedPeace for $100. Given the circumstances, if RedPeace were to sue Professor Lipshaw, what would his best argument in defense be? A. Despite the form's recitation of consideration, this was a charitable promise and therefore not an enforceable bargain. B. The circumstances of the dogs barking and Jessica's refusal to leave constituted actionable duress. C. He didn't make a promise. D. The form of the pledge card, in reciting a consideration, created a legal obligation enforceable as a bargain. E. The terms of form contracts are just as enforceable as negotiated terms.

Your correct intuition after reading these facts ought to be that this sounds like a charitable commitment and therefore, as reflected in Massachusetts in the King case, enforceable only if there is consideration or reliance. D and E take the wrong side. B and C are unsupported by the facts. A is the best (only) argument, even in light of the form's use of "consideration". The Dougherty v. Salt case would tell you that merely saying there was consideration doesn't mean there WAS consideration.

Mr. and Mrs. Peters owned a lot in Lakeview Acres, a homeowners' association bordering Crooked Lake. They never built a house on it, having purchased it merely to gain access to the Association's community beach and boat dock on the lake. The Peters tired of paying real estate taxes on the property and three years ago executed a document in which the Peters donated the lot to the Association in exchange for their non-transferable right to use the community beach and boat dock for the rest of their lives. Last week, Mr. Peters was down at the beach and got into an argument with Max Mingus, the newly-elected president of the Association. Max has asked whether the Association is legally bound to let the Peters use the beach and dock. Your advice should be: A. The Peters can be barred because the transaction constituted a non-binding charitable gift. B. The Peters cannot be barred because they and the Association executed an enforceable contract. C. The Peters cannot be barred under the doctrine of charitable pledge. D. The Peters can be barred because it was an implied condition of the transaction that they behave reasonably while using the property. E. The agreement is unenforceable unless it was notarized and signed by three witnesses.

Your intuitive reaction reading the problem should be: "That sure sounds like a contract to me. There was an exchange of promises and performances - the Association got the land in exchange for a promise of access." If you were writing the answer as an essay question, that is what you would say, and B happens to match it.