Contracts Bar Questions, MBE Contracts Questions

Which of the following is a true statement regarding discharge of contractual duties by rescission? A An agreement to rescind is itself a binding contract supported by consideration B Once an offeree of a unilateral contract has fully performed, the contract cannot be rescinded under any circumstances C A third-party beneficiary contract may be discharged by mutual rescission despite the vesting of the beneficiary's rights if the beneficiary is a donee beneficiary D A mutual rescission agreement must be in writing if the contract so provides

"An agreement to rescind is itself a binding contract supported by consideration" is a true statement. The consideration is the giving up by each party of her right to counterperformance from the other. A third-party beneficiary contract may not be discharged by mutual rescission if the third-party beneficiary's rights have vested, regardless of whether he is a creditor or donee beneficiary. Once an offeree of a unilateral contract has fully performed, the contract can be rescinded, but only if the rescission promise is supported by: (i) An offer of new consideration by the nonperforming party; (ii) Elements of promissory estoppel; or (iii) Manifestation of an intent by the offeree to make a gift of the obligation owed to her. A mutual rescission agreement may be oral, even if the contract to be rescinded expressly states that it can be rescinded only by a writing.

A. No, because the debt was extinguished by the settlement.

10. A 20 year old art student met friends at a local bar, where she consumed several strong drinks. Although her friends urged her not to drive home in her intoxicated state, she insisted that she was fine. As a result of her impaired reflexes, the art student got into an accident and died. Her father was the executor of her estate. A little while later, a friend of the art student called the art student's father. The friend told the father that the art student had owed him $500 for some art materials he had sold to her and added that he planned to file a claim against the art student's estate to recover the money. The friend honestly believed that the estate owed him $500, and the father honestly believed that the estate did not owe the friend anything. On behalf of the estate, the father offered the friend $200 to settle the $400 claim, in exchange for the friend's promise not to file a claim against the estate. The friend accepted the $200. IF the friend files an action against the father to recover the remaining $300, will he prevail? A. No, because the debt was extinguished by the settlement. B. No, because the father was never under any contractual obligation to pay the friend $500. C. Yes, because the promise not to file a claim against the art student's estate is not adequate consideration for an enforceable agreement. D. Yes, because the friend honestly believed that the estate owed him the full $500.

C. The instructor, because a contract for services rendered to the son was implied by the mother's actions.

100. A woman enrolled her 10 year old daughter in a reading enrichment program designed to increase speed and comprehension. The 12 week program was conducted at the child's school every Wednesday afternoon from 3:30 until 5:00 at a cost of $600, payable on completion of the course. The mother brought her daughter to all 12 sessions but because she was unable to secure a babysitter for her son, who was 8 years of age, she sent him into the tutoring sessions along with his sister to "see what he could learn" while she did her weekly grocery shopping. The instructor said nothing about the boy's presence, but at the last session the mother was presented with a bill for $1,200, which she refused to pay. Instead, she tendered a check for $600 reading "payment in full." If the instructor sues the mother for the additional $600, for whom should the court rule? A. The mother, because the son was never formally enrolled in the program. B. The mother, because the instructor never objected to the son's presence at the sessions. C. The instructor, because a contract for services rendered the son was implied by the mother's actions. D. The instructor, because a quasi-contract was formed, and the instructor is entitled to reasonable payment for services rendered.

D. The dealership will win, because the ads did not offer any specific automobiles for specific prices.

101. A large automobile dealership advertised its annual year-end sale on radio and television across the region. The ads specified: "One day only! Fantastic deals on luxury cars! Saturday, from 10-10, select models only $20,000. Hurry to claim yours -- a deal this good won't last!" A couple drove to the dealership and selected a top-of-the-line sedan, but when the salesman completed the paperwork, he listed the price as $28,999. The couple protested, citing the advertising promotion offer of $20,000. The salesman explained that the car they had chosen was not one of the "select models" and they would have to pay the regular sticker price if they wished to complete the sale. If the couple sues the dealership for breach of contract, which of the following accurately depicts the outcome? A. The couple will win, because they accepted the dealership's offer. B. The couple will win, based on the doctrine of promissory estoppel. C. The dealership will win, because advertisements are not legally binding offers. D. The dealership will win, because the ads did not offer any specific automobiles for specific prices.

B. The artist will win his action fro beach of contract, because he accepted the woman's offer.

102. A woman met with a prominent local artist and offered him $10,000 if he would agree to paint a series of portraits: one each of herself, her mother, her grandmother and her daughter. The paintings, which she planned to name "Four Generations," were meant to be a gift for her grandmother's 80th birthday. The artist agreed to begin the sittings in two weeks' time. The following day the artist began to prepare his studio for the sittings. He studied photographs of each of the women and experimented with various backdrops and lighting techniques to find the best choices for each of his subjects. He inventoried his supplies and purchased the paints and brushes he deemed in need of replacement. Several days before the first of the sittings was to commence, the woman phoned to say that she was abandoning the project due to a downturn in her grandmother's health. The artist sued the woman for breach of contract or, in the alternative, quantum meruit damages. Which result is most probable? A. The artist will win his action for breach of contract, because he began performance of a unilateral contract. B. The artist will win his action for breach of contract, because he accepted the woman's offer. C. The artist will lose his action for breach of contract, but he will win reasonable damages for services rendered. D. The artist will lose on both counts.

B. The artist will win his action for breach of contract, because he accepted the woman's offer.

102. A woman met with a prominent local artist and offered him $10,000 if he would agree to paint a series of portraits: one each of herself, her mother, her grandmother and her daughter. The paintings, which she planned to name "Four Generations," were meant to be a gift for her grandmother's eightieth birthday. The artist agreed to begin the sittings in two weeks' time. The following day the artist began to prepare his studio for the sittings. He studied photographs of each of the women and experimented with various backdrops and lighting techniques to find the best choices for each of his subjects. He inventoried his supplies and purchased the paints and brushes he deemed in need of replacement. Several days before the first of the sittings was to commence, the woman phones to say that she was abandoning the project due to a downturn in her grandmother's health. The artists sued the woman for breach of contract or, in the alternative, quantum merit damages. Which result is most probable? A. The artist will win his action for breach of contract, because he began performance of a. unilateral contract. B. The artist will win his action for breach of contract, because he accepted the woman's offer. C. The artist will lose his action for breach of contract, but he will win reasonable damages for services rendered. D. The artist will lose on both counts.

C. The manufacturer, because the installer knew that the manufacturer had substantially relied on his original quote when he submitted his bid.

103. A home builder began construction of a condominium complex containing 100 units. He invited bids for installation of washers and dryers from several manufacturers. One such manufacturer based his final bid in part on a quote from an installer who promised to handle the installations for $200 per unit. The installer knew that the manufacture was relying on his quote when he calculated his bid. The manufacturer was awarded the contract. He shipped 100 washers and dryers to the construction site, but the installer would not install them for less than $300 per unit. Faced with the builder's demand the the installation proceed as scheduled to avoid legal action, the manufacturer told the installer to "get the job done." When the installation was complete, the manufacturer sent the installer a check for $20,000. The installer promptly sued the manufacturer for an additional $10,000. In whose favor should judgement be rendered? A. The installer, because the manufacturer agreed to the increase. B. The installer, because the manufacturer was free to reject his counteroffer. C. The manufacturer, because the installer knew that the manufacturer had substantially relied on his original quote when he submitted his bid. D. The manufacturer, because the installer's price increase was not necessary.

B. The attorney created a revocable offer.

104. A tax attorney offered to sell his bicycle to a farmer for $500. The attorney prepared a signed writing that stated his offer was "firm" for one week. Three days later, the attorney informed the farmer that his offer was revoked. The farmer immediately told the attorney that the offer was accepted. After the attorney refused to see the farmer his bicycle, the farmer filed suit to enforce the contract. Which of the following is correct? A. The attorney created an irrevocable offer for a week. B. The attorney created a revocable offer. C. The farmer's acceptance was valid. D. The farmer accepted the attorney's firm offer.

A. The woman, because the offer to her friend terminated when the friend learned of the sale to another buyer.

105. A woman offered to sell her bicycle to her friend for $250. After hearing the price, the friend said, "Wow. Let me think about it." The woman then said, "OK, take your time." The next day, the woman sold the bicycle to her sister for $200. The friend thought about the bicycle and decided that she really wanted it. The next night she learned from a reliable mutual acquaintance that the woman already sold the bicycle to another buyer for $200. The friend sued the woman for breach of contract. Who should prevail? A. The woman, because the offer to her friend terminated when the friend learned of the sale to another buyer. B. The woman, because there was no consideration to keep the offer open for an extended period of time. C. The friend, because the offer became irrevocable for a reasonable time when the woman said "OK, take your time." D. The friend, because woman was a merchant.

C. The buyer, because the seller revived the offer, which the buyer subsequently accepted in a timely manner.

106. On Thursday, a seller sent a buyer a letter by over-night mail promising to sell him 1500 pairs of high end running shoes for $200,000. On the following Tuesday, the buyer faxed the seller a letter rejecting the offer. The letter stated "price too high; highway robbery!" The seller immediately called the buyer and said, "I received your letter. It's a good deal. Why don't you think it over?" The following day, the buyer learned that there was a high demand for the running shoes because a famous basketball player had endorsed them. He immediately telephoned the seller and said, "You were right. It's a good deal. I accept your offer." The seller then told they buyer, "Sorry, too late. They are all gone." The seller demanded the shoes and tendered a check to the seller for $200,000. The seller returned the check and the buyer sued for breach of contract. Who should prevail? A. The seller, because the buyer's letter faxed on Tuesday constituted a rejection which terminated the offer. B. The seller, because there was no consideration to keep the offer open beyond Tuesday. C. The buyer, because the seller revived the offer, which the buyer subsequently accepted in a timely manner. D. The buyer, because both parties were merchants.

B. Yes, because there was an offer for a unilateral contract that became irrevocable prior to the sportsman's attempted revocation.

107. A well-known fisherman lived in the southeast by the Gulf of Mexico. One day a local sportsman approached the fisherman and said, "If you catch a marlin weighing over 100 pounds today, I'll pay you $1,000." The fisherman then purchased special bait that he knew would attract a marlin and filled his boat with gas for the ride out of the fishing grounds. As the boat approached the fishing grounds, the fisherman baited the hooks with earring roe, set the lines, and began trolling for marlin. After the sportsman had his third beer, he exclaimed "New deal: I will only pay if you catch a marlin weighing over 500 pounds." That day, fisherman caught a 250 pound marlin. Can the fisherman recover $1,000 from the sportsman? A. Yes, under the doctrine of quasi-contract. B. Yes, because there was an offer for a unilateral contract that became irrevocable prior to the sportsman's attempted revocation. C. No, because there was no consideration. D. No, because the sportsman's revocation and modification were effective since the fisherman had not completed performance.

A. The contractor, because bids by subcontractors are generally considered offers.

108. A general contractor solicited bids from a window installation company for a new office building. The company sent the contractor a letter stating "We can do 1500 windows at $100 each." The general contractor signed a contract for the job. A week later, the window company decided it could get $150 per window from another contractor and refused to do any work for the general contractor. The general contractor filed suit against the window company. The window company answered the complaint and asserted that their letter did not constitute an offer. Who should prevail? A. The contractor, because bids by subcontractors are generally considered offers. B. The contractor, because the bid formed an option contract. C. The company, because the letter was ambiguous. D. The company, because their offer was not accepted.

D. The homeowner made an offer that proposed a unilateral contract, and the installer manifested an intent to accept the offer when he began performance by unloading the materials and equipment at the homeowner's house.

109. A homeowner said to a carpet installer, "My carpets are worn and filthy. I think the pad is shot, too. If you will replace the carpet and pad with all new materials, I'll pay you $6,000." The carpet installer replied, "Sure, but I'm really busy for the next two or three weeks." The homeowner then remarked, "OK, but let me know as soon as possible." A week later, the installer drove his installation van to the homeowner's home and unloaded the padding materials and other equipment needed to perform the carpeting job. When the homeowner looked out his window and saw the installer, he immediately ran outside and exclaimed, "What are you doing! No deal. I couldn't wait for you and decided to do it myself." The installer filed an action against the homeowner for breach of contract. Which theory provides the installer with the best chance of recovery? A. A bilateral contract was formed when the installer purchased the materials and equipment needed to do the carpeting job. B. A bilateral contract was formed when the installer said, "Sure, but I'm really busy for the next two or three weeks." C. The homeowner made an offer that proposed a unilateral contract, and the offer became irrevocable when the installer purchased the materials and equipment needed for the job. D. The homeowner made an offer that proposed a unilateral contract, and the installer manifested an intent to accept the offer when he began performance by unloading the materials and equipment at the homeowner's house.

B. Yes, because there was a valid offer, acceptance, and consideration.

11. An attorney and an accountant were lifelong friends. The attorney sent the accountant a birthday card that said, among other things, "I know that you have always loved my valuable collection of rare baseball cards. Volunteer for my charitable organization for one week a year, and after 10 years the collection will be yours." The accountant volunteered for the attorney's charity for one week every year for 10 years. However, by then, the attorney was married and had a son. He told the accountant, "I am so grateful for your work for my charity over the years but now that I have a son, I want him to have my baseball card collection." Is the accountant likely to prevail if he sues the attorney for the baseball card collection? A. Yes, because the doctrine of promissory estoppel would require enforcement of the attorney's promise. B. Yes, because there was a valid offer, acceptance, and consideration. C. No, because the agreement was an unenforceable unilateral contract. D. No, because the attorney's offer was an unenforceable gratuitous promise.

C. The painter can accept by painting the barn green by Sunday or by promising to paint the barn green by Sunday.

110. On Wednesday, a farmer told a painter "I'll pay you $500 for painting my barn green by this coming Sunday." Which of the following statements is most accurate? A. The painter can only accept by painting the barn green by Sunday. B. The painter can only accept by promising to paint the barn green by Sunday. C. The painter can accept by painting the barn green by Sunday or by promising to paint the barn green by Sunday. D. The painter will not be able to enforce the contract unless the offer is in a writing signed by the farmer.

B. The store owner, because the shoe maker received his acceptance before receiving notice of his rejection.

111. On April 18, a shoe maker mailed a letter to a retail store owner offering to sell a 100 of the latest model running shoes for $250 per pair, which was list price. The store owner received the shoe maker's letter on April 19. On April 20 the store owner mailed the shoe maker a letter of rejection. After a run on the popular running shoes, the store owner changed his mind and decided to accept the shoe maker's offer. On April 22, the store owner mailed a letter of acceptance to the shoe maker. On April 21, the show maker sent the store owner a letter revoking his original April 18 offer. On April 23, the shoe maker received the store owner's acceptance. On April 24, the store owner received the shoe maker's letter of revocation. On April 24, the shoe maker received the owner's letter of rejection. The shoe maker refused to sell the running shoes to the store owner, and the owner sued the shoe maker for breach of contract. Who should prevail? A. The store owner, because he mailed his acceptance before receiving notice of the shoe maker's revocation. B. The store owner, because the shoe maker received his acceptance before receiving notice of his rejection. C. The shoe maker, because the store owner mailed his rejection before his acceptance. D. The shoe maker, because he mailed his revocation before receiving notice of the store owner's acceptance.

B. The salon owner owes nothing, based on a unilateral mistake.

112. The owner of a beauty salon and spa was looking for ways to increase her clientele. A sales representative for a line of skin care products called After-Glo phones her to ask if she would be interested in purchasing his products. The owner replied "Afterglow? Oh, I'm a huge fan! All the celebrities use them! My clients would love them.. but I don't think I can afford them. They are so expensive!" The salesman realized immediately that the owner was mistaking his product, normally sold in discount stores and pharmacies, for the more costly products manufactured in Paris. He offered the salon owner a "special introductory offer"--six cases of moisturizer for only $100 per case. Overjoyed, she agreed immediately. When the first case of After-Glo arrived the owner realized her mistake and immediately called the salesman. She said "This is not what I thought I was ordering. It's awful--I'm sending it back, and don't send me any more of it!" After-Glo presents the owner with a bill for $600. Which of the following is a true statement? A. The salon owner owes nothing, based on intentional misrepresentation. B. The salon owner owes nothing, based on a unilateral mistake. C. The salon owner owes $100 for the first shipment of After-Glo. D. The salon owner owes $600, based on a valid bilateral contract.

B. The doctor, for $100.

113. A 15 year old boy was hired as a junior counselor at a summer camp. One afternoon, while accompanying several campers on a nature hike, the boy slipped on some wet grass and fell, breaking his wrist. He was immediately taken to a local doctor's office for treatment. The doctor's usual fee for an office visit was $100, but after setting and casting the wrist the doctor presented the boy with a bill for $200. The boy was returned to his home. His parents ignored the doctor's repeated request for payment of the bill, and the doctor sued to collect his fee. The court should enter a judgment in favor of A. the doctor, for $200. B. The doctor, for $100. C. The doctor, for the value of an implied-in-fact contract. D. The parents.

C. The woman, because the listing agreement had not yet expired.

116. A real estate broker signed a written listing agreement in which he agreed to serve as the exclusive agent for a woman who wished to sell her house. The agreement, which covered a 12-month period, guaranteed the broker a commission of 6% if the house sold at or above its appraised fair market value. Several weeks after the broker listed the house, a fully qualified buyer offered the full asking price and the broker prepared a contract of sale which the buyer signed. The woman, who had not expected the house to sell so quickly, declined to sign the contract because she had not yet found alternate housing. The broker persuaded the buyer to give the woman a bit more time, but a month passed with no progress so the buyer withdrew his offer and took his business elsewhere. The broker informed the woman that he was rescinding his agency agreement. She promptly filed suit for breach of contract and the broker countered with an action for damages in the amount of 6% of the buyer's offer. For whom should the court rule? A. the broker, because he performed his duty by producing a buyer who was ready, willing and able to purchase the house at far market value. B. the broker, because the woman acted in bad faith when she declined the buyer's offer. C. the woman, because the listing agreement had not yet expired. D. The woman, because the house had not yet sold.

D. The lady owes $30, based on quasi-contract.

117. In November, a young man placed fliers in the mailboxes of all the residents who lived in his subdivision advertising his services for snow removal. The flier read, "I will shovel your walkways and driveway for $30 whenever it snows." Two weeks later, the first snowstorm began in the evening and lasted throughout the night. The young man was up early the following morning shoveling. By noon he had cleared six houses including one belonging to the elderly lady who lived next door. The lady watched him from her window and when her walkway was cleared she came to her front door to offer him a cup of hot cocoa. He continued shoveling until her driveway was clear while she watched his progress from her place at the window. When he had finished, the young man came to the door and asked for $30, the same fee the other homeowners had happily paid. Which of the following is an accurate assessment of the outcome? A. The lady owes nothing, because she did not request the young man's services. B. The lady owes nothing, because she did not accept his offer to shovel the snow. C. The lady owes $30, because a unilateral contract was formed when the young man began shoveling her walkway. D. The lady owes $30, based on quasi-contract.

A. Enforceable, because the request for the modification was made in good faith.

12. While cleaning out his attic, a man discovered a large vase. It was pretty and well made. The man offered the vase for sale in an online ad. A woman responded, came to see the vase, and offered to buy it for $50. The man agreed. The woman did not have enough cash on her, so the man agreed to let her return the next day with the money. That night, the man's wife was cleaning the vase when she realized that the vase appeared to have been made by a famous sculptor who had died. Thus, the vase was actually worth a lot more than $50. The woman returned the next day with the $50. The man told her what he had learned about the vase and asked her for $100 instead. The woman agreed to pay the man an additional $50 for the vase. The modification by which the woman agreed to pay $100 for the vase is A. Enforceable, because the request for the modification was made in good faith. B. Enforceable, because enforcement of the original agreement to sell the vase for $50 would be unconscionable. C. Unenforceable, because the man was under a pre-existing duty to sell the vase for $50. D. Unenforceable, because the modification was not supported by consideration.

B. The contractor will fail because he deposited the check with no objection.

123. A contractor and a homeowner entered into a written agreement for the contractor to build a patio in the backyard of the homeowner's home, to the homeowner's satisfaction, in exchange for payment of $1,750. When the contractor completed the work, however, the homeowner claimed in good faith that the contractor had not performed the work properly, and he refused to pay the contractor anything. The nature of the contractor's business was such that he was in constant need of cash to pay his workers. On July 8, he sent a telegram to the homeowner, indicating that he desperately needed the $1,750 and requested that the homeowner send him the money before the end of the month. The homeowner replied in a telegram on July 12 that he would settle for paying the contractor $1,500 if the contractor agreed to repair the portions of the nation with which the homeowner was least satisfied. The contractor did not respond. On August 4, the homeowner mailed a check to the contractor in the amount of $1,500, with a note indicating "Payment in full for the construction contract as per telegram of July 12." The contractor received the letter and check on August 7, and, in desperate need of cash, deposited the check into his bank account. He spent the money immediately to pay his employees, but he refused to undertake any further work for the homeowner. The contractor then sued the homeowner for the remaining $250. What is the likely outcome? A. The contractor will fail, because he can recover only the reasonable value of his services. B. The contractor will fail, because he deposited the check with no objection. C. The contractor will succeed, if he can prove that the patio was constructed according to the homeowner's specifications. D. The contractor will succeed, because he deposited the check under severe economic duress.

B. Yes, because there was an offer for a unilateral contract that became irrevocable prior to the restaurant owner's attempted revocation.

125. A well-known circus clown was approached by a restaurant owner. The restaurant owner told the clown, "If you balance yourself on top of my flagpole for two minutes, I will pay you $200." The clown then went to the sports store and purchased special shoes for balancing on the flagpole. After climbing up the restaurant owner's flagpole, the clown started balancing on top, at which point the restaurant owner screamed, "I hereby revoke my offer!" In a jurisdiction applying the modern rule, if the circus clown thereafter goes ahead and balances on top of the flagpole for two minutes, will he recover the $200? A. Yes, under the doctrine of quasi-contract. B. Yes, because there was an offer for a unilateral contract that became irrevocable prior to the restaurant owner's attempted revocation. C. No, because the agreement lacks consideration. D. No, because the restaurant owner's revocation was effective since the clown had not completed the balancing act.

D. No, because the customer had previously paid the higher price.

128. A ferry boat captain operated a ferry service based on the island of Columbia. Most of its customers used the ferry service to commute between Columbia and New Kent, on the mainland. On the first day of the month, such commuters could purchase a monthly transit pass for $600, making the average price of a round-trip approximately $20. In contrast, for passengers buying a single round-trip ticket, the round-trip price was $35. During the summer, the cost of fuel increased. While such increases happened every year, this year's increase was triple that of the previous four years. Due to the increased cost, there was a substantial possibility that the captain informed his customers that the price of a single round-trip ticket would increase to $55, the price of a monthly pass would increase to $1,200 and that even those who had already purchased monthly commuter passes would be required to pay an additional $20 for each round-trip. One customer in particular was very annoyed at the increase in price. However, he paid the additional $20 per round-trip for the rest of July. By the beginning of August, he could no longer afford to pay the cost of commuting to work. The customer sued to enforce the original commuter pass price and recover the extra amount paid during July. Will the customer be successful? A. Yes, because the captain had a pre-existing duty to provide transit at $20. B. Yes, because the increase in fuel price was foreseeable at time of formation. C. No, unless the captain can prove that it would be economically impossible for him to return to the lower price. D. No, because the customer had previously paid the higher price.

B. The banker, because his letter of March 1 manifested on its face to the three recipients that it was not intended to be construed as an offer.

129. A banker purchased two tickets for the Super Bowl. The tickets, which cost the banker $200 were now selling for between $600 and $800. On March 1, the banker sent to his three friends, an artist, a singer, and a dancer, an identical copy of the following letter: "Dear friends: I have two seats for the Super Bowl. Regrettably, I can;t attend. If anyone is interested, I will let you have the tickets for a reasonable price. However, I must have your reply by March 20. s/The banker." On March 19, the banker received a letter f rom the artist that stated, "I accept your offer and will pay you $600 for the two tickets." The banker did not immediately respond to the artist's letter. On March 22, the banker received the following letter from the singer: "My only wish in life is to go to the Super Bowl...I will pay $800 for your seats." The next day, the banker sent a telegram to the singer which read, "The tickets belong to you. You may take delivery upon payment of the $800." The dancer never responded to the banker's letter. The artist then gave $600 to the banker within a reasonable time, but the banker refused to give the tickets to him. In an action by the artist against the banker for breach of contract, judgment should be for whom? A. The banker, because his letter of March 1 and the artist's reply were too indefinite to constitute an offer and acceptance. B. The banker, because his letter of March 1 manifested on its face to the three recipients that it was not intended to be construed as an offer. C. The artist, because his was the highest bid submitted before the March 20 deadline. D. The artist, because the banker's attempt to sell the tickets to the singer was a breach of an implied promise to act in good faith.

B. The driver will prevail because she believed in good faith that the car accident was caused by the employee's negligence at the time she entered into the settlement agreement.

13. A store owner sent out an employee to make a delivery in the store's van. On the way, the employee got into an accident with a driver, who was injured. The driver sued the store owner and the employee for $50,000 in compensatory damages and $50,000 in punitive damages, arguing that the car accident was caused by the employee's negligence. Pretrial investigation and discovery revealed an uninterested witness to the accident. The witness claimed that the employee had been driving recklessly and ran a red light before slamming into the driver. In a signed writing a month before the trial, the driver offered to settle her claims against the store owner for a cash payment of $40,000. The store owner agreed, saying he would make the payment in two weeks. Based on the store owner's promise, the driver had her negligence action dismissed. Before the store owner paid the $40,000 to the driver, they learned that the witness's testimony was fabricated; the witness had not seen the employee driving recklessly or running a red light. The driver still believed in good faith that the car accident was caused by the employee's negligence. However, based on this new information, the store owner refused to pay the $40,000 to the driver. The driver then brought an action against the store owner for $40,000. What will be the outcome of this action? A. The driver will prevail because the agreement to settle the lawsuit did not require consideration. B. The driver will prevail because she believed in good faith that the car accident was caused by the employee's negligence at the time she entered into the settlement agreement. C. The store owner will prevail because the revelation of the witness's fabrication demonstrates that there was no consideration to support his promise to pay $40,000. D. The store owner will prevail because ag

C. The music store, because the advertisement will not be construed as containing a promise to sell a specific set of merchandise.

130. A music store ran the following ad in the newspaper on Thursday: "This Sunday ONLY take advantage of the best offer this side of the Mississippi Rock and Rap albums at outlandish prices, only $20 each. Come and get 'em!" On Sunday, after reading the advertisement, a professor went to the store to cash in on the awesome deal. The professor picked out three rock albums and went to the register to pay. The clerk asked the professor for his email address and found that he was already in the computer. He then charged the professor the regular rate for the albums. The professor mentioned the $20 ad in the paper. The clerk said, "I apologize, that was intended for new customers only, and you do not qualify, because you are already in the computer." If the professor sues the music store for breach of contract, for whom should the court rule? A. The professor, because he detrimentally relied upon the ad in the paper. B. The professor, because the music store's advertisement was an offer that the professor accepted by attempting to purchase the albums. C. The music store, because the advertisement will not be construed as containing a promise to sell a specific set of merchandise. D. The music store because the ad was intended to attract new customers.

B. The distributor will fail in asserting the Statute of Frauds as a defense, because under the circumstances,the paperclip company owner's letter satisfied the Statute of Frauds requirements for an agreement between merchants.

131. The owner of a paperclip company received a call from a distributor, who tole him that she needed more paperclips. The parties agreed that the paperclip company would send the distributor three separate deliveries. The day after the telephone call, the paperclip company sent the distributor a letter that stated, "Based on our estimation, you need more paperclips. We will therefore send to you three shipments over three months at the rate of $300 per shipment to restock your supplies." This letter was signed by the paperclip company owner, and properly identified the parties. The paperclip company subsequently sent the first shipment of paperclips to the distributor, and the distributor accepted the delivery. Four weeks later, the paperclip company owner sent the next shipment to the distributor. When the distributor received the second shipment of paperclips, she phoned the paperclip company owner and told him that she did not want any more paperclips, that she was rejecting the delivery and that she would also refuse to accept any future deliveries. The paper clip company filed a breach of contract actions against the distributor, claiming that the distributor had no right to refuse the second and subsequent shipments of paperclips. The distributor asserted that the Statute of Frauds as a defense. Which of the following is true regarding the viability of the distributor's Statute of Frauds defense? A. The distributor will fail in asserting the Statute of Frauds as a defense, because the paperclip company had partially performed the contract at the same time of the distributor's attempted repudiation. B. The distributor will fail in asserting the Statute of Frauds as a defense, because under the circumstances,the paperclip company owner's letter satisfied the Statute of Frauds requirements for an agreement be

A. The artist, because the offer lapsed at the end of their conversation.

132. A locksmith had known an artist for 20 years. One day, the two friends were watching a baseball game on tv when the artist said to the locksmith, "Hey you know your walls are really bare. If you want I'll paint a mural on your living room wall for $100." The locksmith replied, "That seems like a fair deal." A few seconds later, the home team hit a home run and the two men jumped up, started cheering, and gave each other a high five. Nothing further was said about painting a mural on the locksmith's wall. The next day, the locksmith telephoned the artist and said, " I accept your offer." The artist replied, "I cant paint your wall now, because after I left your house last night, I contracted to paint a mural at a bar." If the locksmith sues the artist for breach of contract, who will prevail? A. The artist, because the offer lapsed at the end of their conversation. B. The artist, because his contract with the bar effectuated a revocation of his offer to the locksmith. C. The locksmith, because the acceptance was communicated before the attempted revocation. D. The locksmith, because the revocation was ineffective.

A. the architect, because the transaction with the developer was not in writing.

133. At a local restaurant, a developer overheard an architect say to his buddy, "I've got to get rid of the warehouse, the district's been rezoned C-1 and the property taxes are way too high!" The developer went over to the architect and pulled him aside. The developer said he was familiar with the warehouse property and offered the architect $200,000 for it, saying that he would pay him immediately. When the architect wavered, the developer wrote architect a personal check for $10,000 and said, "This will show I am serious, you give me a deed here at lunch tomorrow, and I'll have the rest in cash. Let's shake on the arrangement." The architect shook the developer's hand and said, "OK, it's a deal." The developer gave the architect the $10,000 check and left the restaurant. The next day, the developer was at the restaurant with a cashier's check for $190,000. When the architect arrived, the developer offered the architect the check and asked for the deed. Although the architect had prepared and executed a warranty deed in the developer's favor, instead of delivering the deed the architect returned the developer's $10,000 personal check. The architect stated that he got another offer for the warehouse for $250,000. The developer refused to accept the return of his personal check and sued the architect specific performance. The court should find in favor of whom? A. the architect, because the transaction with the developer was not in writing. B. The architect, because a cashier's check is not the equivalent of cash. C. The developer, because he as partially performed the oral agreement. D. The developer, because the doctrine of equitable conversion treats him as the owner of the warehouse.

C. The contract is not enforceable, because the artist never signed the letter.

134. A woman saw a new painting being painted by a famous artist. She immediately went over to the artist and the two orally agreed that the woman would purchase the painting for $5,000. The woman sent a signed letter describing the transaction to the artist. However, two days later, the artist decided not to deliver the painting. Which of the following is correct regarding the artist's obligation? A. The contract is enforceable, because the woman sent a signed letter describing the offer. B. The contract is not enforceable, because of the main purpose rule. C. The contract is not enforceable, because the artist never signed the letter. D. The contract is enforceable, because there was a meeting of the minds.

B. The contract can be enforced, because the teacher notified his friend of the contract.

135. A teacher owns three large plots of land in the suburbs. He decided to build an office complex on one of the plots so that he could rent out the offices to gain some extra income. The teacher met an agent of a construction company who laid out the plans for constructing such a complex. the two orally agreed that the company would do the work over a period of one year and eight months for a price of $2,000,000. The teacher, wanting to brag, then notified his old college friend via a signed letter of the details of the $2,000,000 transaction. Just before construction was to begin, the teacher balked at the deal and refused to go through with it. The construction company now seeks to enforce the contract. Which of the following is the best answer? A. The contract can be enforced, because the teacher and the company agreed on the terms. B. The contract can be enforced, because the teacher notified his friend of the contract. C. The contract cannot be enforced because the contract was for longer than one year. D. The contract cannot be enforced because the contract was for $2,000,000.

D. There was no contract between the parties as of June 5.

136. After negotiations, a scientist wrote to a carpenter and said, "I will pay you $1,000 if you build a custom entertainment center in my apartment according to the measurements i am including here. I must have your reply by May 30." The carpenter replied by letter, saying, "Will not do it for less than $1,500." The scientist received the reply on May 15. On May 20, the carpenter wrote to the scientist and said, "I reconsidered. I will do the work for $1,000. Unless I hear from you to the contrary, I will begin work on June 5." The scientist received this letter on May 22, but did not reply to it. The carpenter, without the scientist's knowledge, then began the work on June 5. Which of the following best characterizes the legal relationship between the scientist and the carpenter as of June 5? A. A contract was formed on May 20, when the carpenter posted his letter. B. A contract was formed on May 22, when the scientist received the carpenter's letter. C. A contract was formed on June 5 when the carpenter began to work. D. There was no contract between the parties as of June 5.

B. The contract is enforceable, and the delivery must take place within a reasonable time.

137. A man owns a landscaping business. The man, seeking to expand his business decided to purchase more landscaping equipment. He contracted the equipment store, and the two parties entered into a written contract whereby the man would buy landscaping equipment for $5,000. The contract did not state the date on which the store must make delivery. Which of the following is correct?: A. The contract is enforceable, but the parties must renegotiate the date of delivery. B. The contract is enforceable, and the delivery must take place within a reasonable time. C. The contract is not enforceable, because a necessary term is missing. D. The contract is not enforceable, because of the Statute of Frauds.

C. Win, because the customer's agreement to compromise his claims was sufficient consideration for the bar owner's agreement to pay $10,000

14. A bar owner owned a bar in a small town. One Friday night, there was a fight between the bartender and a customer. The customer subsequently brought an action against the bar owner, alleging that the bartender had committed a battery against the customer when he threw the customer against a parked car, breaking the customer's jaw. The customer sought $30,000 in compensatory damages and $30,000 in punitive damages. In a signed writing two weeks prior to trial, the customer offered to settle his claims against the bar owner for a cash payment of $10,000. The bar owner agreed and said she would make payment prior to trial. A week later, the bar owner telephoned the customer and repudiated any agreement to settle the lawsuit. The customer brought a second action against the bar owner to enforce the settlement agreement. The customer will A. lose, because the bar owner's promise is a defense to a lawsuit on the underlying duty. B. lose, because such an agreement is void as against public policy. C. Win, because the customer's agreement to compromise his claims was sufficient consideration for the bar owner's agreement to pay $10,000. D. Win, because the bar owner's promise to pay $10,000, made in connection with pending litigation, is enforceable without consideration.

B. $4,000

16. A soon-to-be motorist resides in a state that provides that the age of majority is 18 years of age. A month before his 18th birthday, the motorist agreed in writing to purchase a car for $4,500 from a car dealership. The market value of the car is $3,500. When he turned 18 the motorist wrote the car dealership the following letter, "I made a bad deal with you guys, and I'm not willing to pay the $4,500, but I will pay $4,000." Before the car dealership could respond, the motorist wrote them another letter telling the car dealership to "forget the whole deal." In an action by the car dealership against the motorist, what can the car dealership recover?: A. $4,500 B. $4,000 C. $3,500 D. Nothing

D. No, because the minds of the parties had not met.

17. An investor inherited a large, but minority block of a public company's stock. The public company's chief executive officer and and major shareholder, hired the investor as the public company's head purchasing agent and had the investor elected as a vice president of the public company. On June 1 of last year, the investor invited bids from several coal companies for ten lots of metallurgical coal. A coal mining specialist bid $750,000. This was an excellent price because it was substantially under the market price for metallurgical coal. The investor immediately made a written agreement to purchase the coal from the coal mining specialist and promised to have him elected to the public company's board of directors at the shareholder's meeting schedules for August 15. The investor had always wanted to be a director so that he could better protect his interest in the public company. Several weeks before the coal was to be delivered, the coal mining specialist notified the investor that the coal mining specialist had requested a price increase to $825,000, which the investor confirmed in writing after conferring with the CEO. When the investor received the coal mining specialist's bid for $750,000, the investor was reasonably certain that coal mining specialist had made an error in calculations. Does the investor's acceptance of the bid result in an enforceable contract under the prevailing American rule?: A. Yes, because although most courts grant relief for a mutual mistake, relief usually is not granted for a unilateral mistake. B. Yes, because although most courts grant relief for errors in judgment, relief usually is not granted for an arithmetical error. C. No, because there was a mutual mistake. D. No, because the minds of the parties had not met.

D. No, because the student had the power to disaffirm the contract.

18. A 16 year old high school student loved classic rock and roll music from the 50's and 60's and he had developed a collection of rare vinyl records, which he sometimes sold to private collectors for a profit. One evening, a plumber came to the student's family's home to fix a leak in the bathroom and caught a glimpse of the student's extensive record collection. When the plumber inquired about the records the student explained that he had an "eye" for valuable classic records, and that because he purchased them at very low prices, he was able to pass on his savings on to his customers. Impressed with the students apparent expertise, the plumber asked whether the student had come across a particular record by a musical group popular in the early 50's. The student had no, but told the plumber that he would keep an eye out for the record and contact the plumber if one became available. The plumber told the student that he would be willing to pay $450 for the record, and the student agreed. Several weeks later, the student noticed the record for sale in a used music store, and he purchased it immediately. Upon examining the record, he saw that the record had a number of flaws and would probably be classified as in "Good" condition, a relatively average rating used to place a value on vinyl records. Nevertheless, the student contacted the plumber and told him that he'd found a "Near Mint" condition copy of the record- the second-best condition possible for a used record. The plumber again expressed that he would pay the student $450 for the record, and the student told the plumber he could come immediately to collect the record. Upon doing so, the plumber noticed that the record's condition was not true "Near Mint", and he expressed his disappointment to the student. However, since the record was quite rare, the plumbe

C. No, because the personal shopper relied on a material misrepresentation.

19. A porcelain doll collector was 17 years old and had been buying and selling antique and custom-made dolls for the past five years. An older personal shopper, who had never been interested in dolls before, saw the doll's collector's showcase at an antique toy convention and decided that she would to own one. The personal shopper asked the doll collector if she knew where she could get such a doll, and the doll collector showed the personal shopper a very rare and old doll she had in her collection. Although the doll was missing two buttons and a strap on her dress, when the personal asked the doll collector whether the lack of buttons and strap would affect the doll's potential resale value, the doll collector replied that it would have no effect at all. Actually, the doll collector knew that the lack of the buttons and strap probably would interfere substantially with the potential market/resale value of the doll. Unaware of this significance, the personal shopper arranged to come by the doll collector's house the following weekend to bring the collector $150 cash and to pick up the doll. The doll collector wrote the terms of their agreement with lipstick on a small receipt she had gotten from buying lunch earlier in the day and both parties signed it. A few days later, the personal shopper found out from one of her clients that the incomplete dress would diminish the resale value of the doll considerably. The personal shopper called the doll collector that night and told her that the deal was off. The doll collector sued the personal shopper for breach of contract. Will the doll collector prevail? A. Yes, because the agreement was a voidable obligation only at the doll collector's election. B. Yes, because it was not reasonable for the personal shopper to rely on the doll collector's statement. C. No, becau

D. No, because the freelance anchor dispatched the acceptance before the station manager attempted to revoke her offer.

20. A television station's weekend news anchorwoman was scheduled to do her usual work on November 5-7. Unfortunately, she came down with acute laryngitis and emailed the station manager that she would be unable to work that weekend. On November 1, the station manager mailed letters to three freelance anchors, offering to pay a $500 bonus if one of them could take over the anchor duties for that weekend on short notice. One of the freelance anchors received the letter the next day and immediately dropped a note in the mail: "I would love to work for you next weekend. As a matter of fact, I need to! I'm a month behind in my rent and worried about getting evicted. Hope you don't mind that I've dyed my hair red since we last spoke, but I could get a quick blonde dye if you like." After the freelance anchor sent the letter, but before the station manager received it, the regular anchor phoned the manager to tell her that, due to a new cough syrup she was trying, the anchor was recovering quickly and thought she would be able to do her usual weekend work. The station manager immediately phoned the freelance anchor to tell her she was no longer needed. The freelance anchor was very disappointed and sued the television station for breach of contract. The station asserted in its defense that there was no conflict, because the freelance anchor had never effectively accepted the station manager's offer. Will the station win on the grounds of this defense? A: Yes, because the manager had the right to reject the freelance anchor's attempted acceptance, since it contained an additional term B: Yes, because there was no salary term contained in the freelance anchor's letter C: No, because the station manager's attempted revocation by telephone was not communicated through the same medium as the station manager's offer. D: No, b

D. No, because the freelance anchor dispatched the acceptance before the station manager attempted to revoke her offer.

20. A tv station's weekend news anchorwoman was scheduled to do her usual weekend work on November 5-7. Unfortunately, she me down with acute laryngitis and emailed the station manager that she would be unable to work that weekend. On November 1, the station manager mailed letters to three freelance anchors, offering to pay a $500 bonus if one of them could take over the anchor duties for that weekend on short notice. One of the freelance anchors received the letter the next day and immediately dropped a note in the mail: I would love to work for you next weekend. As a matter of fact, I need to! I'm a month behind in my rent and worried about getting evicted. Hope you don't mind that I've dyed my hair red since we last spoke, but I could get a quick blonde dye if you like." After the freelance anchor sent the letter, but before the station manager received it, the regular anchor phoned the manager to tell her that, due to a new cough syrup she as trying, the anchor was recovering quickly and thought she would be able to do her usual weekend work. The station manager immediately phoned the freelance anchor to tell her she was no longer needed. The freelance anchor was very disappointed and sued the tv station for breach of contract. The station asserted in its defense that there was no contract because the freelance anchor had never effectively accepted the station manager's offer. Will the station win on the grounds of this defense? A. Yes, because the manager had the right to reject the freelance anchor's attempted acceptance, since it contained an additional term. B. Yes, because there was no salary term contained in the freelance anchor's letter. C. No, because the station manager's attempted revocation by telephone was not communicated through the same medium as the station manager's offer. D. No, because the

A. The summer camp, because the letter should have reasonably been understood as an offer that required a timely response in return.

21. An owner of an exclusive private summer camp for children hired a clown to perform for the children during the week of August 10 through 16. Unfortunately, the clown came down with acute laryngitis and informed the camp owner by letter that she would be unable to perform until sometime in late August. On August 1, the camp owner sent the following letter by overnight mail to three other clowns. "I'm in a bind. I had lined up a clown for the week of August 10 through 16, but she's sick and can't perform. I need another clown. You have to be here at camp by August 9 at the latest so I can pre you on this year's program. Camp is filled to capacity, so money is no problem." All three letters were identical and were received by the respective clowns on August 2. As soon as the first clown received the letter, she canceled her plans to perform at a local renaissance fair the week of August 10 and without letting the camp owner know of her intentions, she showed up at camp during breakfast the morning of August 9. After doing several cartwheels down the dining room center aisle, the first clown landed smiling in front of the camp owner and sang: "Winter, spring, summer, or fall, all you have to do is call, and I'll be there. Your clown problems are over!" The camp owner took the clown by the arm, and as inconspicuously as possible, slipped out of the dining room. She told the clown that the clown she had originally hired had gotten her voice back and was going to perform as originally planned. The owner explained that because the first clown to receive the letter had not communicated any response to the letter, the owner was not expecting her. Who will win if the first clown to receive the letter sues the summer camp? A. The summer camp, because the letter reasonably should have been understood as an offer that required

A. The summer camp, because the letter reasonably should have been understood as an offer that required a timely response in return.

21. An owner of an exclusive private summer camp for children hired a clown to perform for the children during the week of August 10 through 16. Unfortunately, the clown came down with acute laryngitis and informed the camp owner by letter that she would be unable to perform until sometime in late August. On August 1, the camp owner sent the following letter by overnight mail to three other clowns. "I'm in a bind. I had lined up a clown for the week of August 10 through 16, but she's sick and can't perform. I need another clown. You have to be here at camp by August 9 at the latest so I can prep you on this year's program. Camp is filled to capacity, so money is no problem." All three letters were identical and were received by the respective clowns on August 2. As soon as the first clown received the letter, she canceled her plans to perform at a local renaissance fair the week of August 10, and without letting the camp owner know of her intentions, she showed up at camp during breakfast the morning of August 9. After doing several cartwheels down the dining room center aisle, the first clown landed smiling in front of the camp owner and sang: "Winter, spring, summer, or fall, all you have to do is call, and I'll be there. Your clown problems are over!" The camp owner took the clown by the arm, and as inconspicuously as possible, slipped out of the dinning room. She told the clown that the clown she had originally hired had gotten her voice back and was going to perform as originally planned. The owner explained that because the first clown to receive the letter had not communicated any response to the letter, the owner was not expecting her. Who will win if the first clown to receive the letter sues the summer camp? A. The summer camp, because the letter reasonably should have been understood as an offer that requi

C. The engineer was hired for at least 6 months, because that is what was told to him by the company representative.

28. A company that was involved in oil drilling was interested in hiring a new engineer. The company interviewed a few engineers until it met a certain, highly qualified engineer. During the interview, the company representative orally told the engineer that they would be interested in hiring the engineer for at least 6 months. The enginner took the company's offer and the two parties signed an agreement. However, the agreement did not mention any duuration term for the engineer's employment. Which of the following is correct? A. The engineer was hired at-will, because that is the default rule. B. The engineer is hired at-will, because he was not given any written assurances to the contrary. C. The engineer was hired for at least 6 months, because that is what was told to him by the company representative. D. The employment agreement is not valid, since it is missing an essential term.

B. The contractor is entitled to a payment for the reasonable value of services rendered.

29. A man owned a home in a small town. The man's home was in need of certain repairs. The man heard from a friend that a certain contractor did repairs for a very low price. The man contacted the contractor and the two parties agreed that the contractor would make the repairs. However, the two did not discuss the price. The contractor then completed the repairs and asked for payment. Which of the following is correct? A. The contractor is entitled to a payment at a rate told to the man by the friend. B. The contractor is entitled to a payment for the reasonable value of services rendered. C. The contractor is not entitled to any payment because no price was discussed. D. The contractor is only entitled to partial payment.

B. The contract is enforceable, but the delivery must take place within a reasonable time.

30. A woman owned a gardening business that enjoyed much success in a large city. The woman was seeking to expand her business so she decided to purchase more gardening equipment. She contacted a gardening store and the two parties entered into a written contract whereby the woman would buy gardening equipment for $3,000. The contract did not state the date on which the store had to make delivery. Which of the following is correct? A. The contract is enforceable, but the parties must renegotiate the date of delivery. B. The contract is enforceable, but the delivery must take place within a reasonable time. C. The contract is not enforceable, because the necessary term is missing. D. The contract is not enforceable because of the Statute of Frauds.

A. The place of delivery will be the producer's place of business. Under the UCC, where pertinent terms are missing, certain default provisions will supplant the contract. The default rule for a missing delivery term is that the place of delivery will be the seller's place of business unless otherwise agreed. Here, since the contract did not mention the place of delivery, the place of delivery will be the producer's place of business.

31. A business man sold curtains at his store in a small town. One day, he decided to buy more curtains, because of growing demand. He contacted a curtain producer and the two parties agreed that the producer would sell 20 curtains to the businessman for $2,000. The two parties signed a contract to that effect. However, the contract did not specify where the delivery was to take place. Which of the following is correct?: A. The place of delivery will be the producer's place of business. B. The contract is enforceable but the parties must renegotiate the place of delivery. C. The place of delivery will be the businessman's place of business. D. The contract is not enforceable.. The place of delivery will be the producer's place of business.

C. No, because the orchestra had already agreed to perform at the dance performance.

32. A ballet company and an out-of-town orchestra entered into an agreement requiring the orchestra to perform live at the ballet company's performance in return for payment of a specified performance fee. Two weeks after the agreement had been signed, an airport workers union went on strike, leading to moderate increases in price of flights. The orchestra asked the ballet company to adjust the performance fee to reflect the increased cost of flying the orchestra members to the part in the performance. The ballet company agreed. Is the ballet company required to pay the increased fee? A. Yes, because the modification to the contract was made in good faith. B. Yes, because the strike was an unforeseen circumstance. C. No, because the orchestra had already agreed to perform at the dance performance. D. No, because the UCC does not require contract modifications to be supported by consideration.

D. The contract is not voidable because the store owner bore the risk of mistake.

34. A store that sold small appliances was going out of business. Anxious to sell off its inventory, the store owner held a large clearance sale. A buyer came in during the sale and said that he would buy all of the remaining DVD players. While the store owner drew up the contract, the buyer told the store owner that he could get a lot more for each of the DVD players if he sold them over the internet. The store owner said that he highly doubted it and wished the buyer the best of luck. Two weeks later, the store owner learned that the buyer had just doubled his money on one of the DVD players by selling it on-line. The store owner sought to void the contract for mistake because the buyer still had 50 more DVD players. What is a court likely to decide? A. The contract is voidable for mutual mistake. B. The contract is voidable for unilateral mistake. C. The contract is not voidable for mistake because it is governed by the UCC. D. The contract is not voidable because the store owner bore the risk of mistake.

D. The contract is not enforceable, because it was oral.

41. A producer of windows sold windows to local windows shops. One day, an owner of a local windows shop contacted the producer and orally ordered 12 windows, each at a price of $50. The producer promised to send the windows in one week. However, in three days, the producer refused to send the windows and instead denied the existence of the contract. The owner of the windows shop sought to enforce the contract. Which of the following is correct? A. The contract is enforceable, since there was a meeting of the minds. B. The contract is enforceable as to nine of the windows, and not enforceable as to the other three windows. C. The contract is not enforceable, because a merchant has a right to reject a contract before the date on which he must perform. D. The contract is not enforceable, because it was oral.

D. The contract is not enforceable, but the man can still recover damages via promissory estoppel.

42. A man owned a store that sold dishwater. One day, he decided to expand his inventory by buying more dishwater for his store. He contacted a dishwater production company and spoke to a company sales agent over the phone. The two agreed that the man would buy 100 sets of dishes for a total of $5,000. The man then asked if he needed to show up in person to the company headquarters so that both parties could sign the contract, but the agent stated that there was no such need since the agent would send the man a letter describing the offer. However, the agent never sent the offer letter, and, two days later, the company denied the existence of the contract. The man suffers damages as a result. Which of the following is correct? A. The contract is enforceable, and the man will receive damages via promissory estoppel. B. The contract is enforceable, because the contract does not need to be evidences by signed writing. C. The contract is not enforceable, and the man will not receive any damages. D. The contract is not enforceable, but the man can still recover damages via promissory estoppel.

A. The contract is enforceable, and the engineer will receive $120,000

43. A businessman ran a factory that manufactured motorcycles. One day, the businessman decided to hire an engineer to improve three of the machines that helped produce motorcycles in the factory. The businessman contacted an engineer and the two parties orally agreed that the engineer would work for 14 months on improving the machines and in exchange would receive $120,000. The engineer worked for 14 months and completed the project, but then the businessman refused to honor the contract. The engineer sought to enforce the contract. Which of the following is the best answer? A. The contract is enforceable, and the engineer will receive $120,000. B. The contract is enforceable, because the two parties made an oral contract. C. The contract is not enforceable, because the contract was for longer than one year, and the engineer will not receive any payments. D. The contract is not enforceable, because the contract was for longer than one year, but the engineer will receive payment for the reasonable value of his services.

C. No, because the student made a mistake.

52. When her father died, a college student returned home to manage his estate. She began placing items within the home for sale, including books located in the library. She placed an online advertisement for a set of old dusty hardcover books that she presumed to be worth very little. A coffee shop owner wanted to create a window display made of old books and he contacted the student about her advertisement. She agreed to sell the set of books for next to nothing and the coffee shop owner planed to pick the books up ten days later. The day after her conversation with the shop owner, an elderly man interested in buying furniture came to the house and saw the books. The elderly man told the woman that she was very lucky to be in possession of so many rare first edition books and offered to buy them at a much higher price than the one quoted to the coffee shop owner. The woman immediately contacted the coffee shop owner and told him that she was not going to sell the books at the price originally quoted. Finding out that the books were so valuable, the coffee shop owner sued the woman in an attempt to force the woman to specifically perform on the contract. Will the coffee shop owner's suit succeed? A. Yes, because the college student would not be disadvantaged by the sale. B. Yes, because they are unique items. C. No, because the student made a mistake. D. No, because the student made a faulty assumption regarding future facts.

B. The singer, because she revoked her offer by selling the guitar and informing the guitarist before the guitarist accepted the offer.

55. A famous singer decorated her studio with guitars she purchased from all over the world. The singer loved to entertain, and held a large party in her home. At the party, a famous guitarist admired a framed two-neck guitar the singer had purchased from a rock musician in Liverpool, England. The guitarist told the singer that she would love to own such an unusual guitar. On July 10, the singer mailed a letter to the guitarist saying, "I have been pondering about how much you liked the guitar you saw at my party, and I want you to own it. The price is $50,000." The guitarist was pleased to receive the letter on July 12. Unknown to the singer, the guitarist had already mailed the singer a letter on July 11 offering to purchase the guitar for $50,000. The singer received the guitarist's letter on July 15. On July 16, a drummer, who had also attended the party and admired the same guitar, visited the singer and offered $51,000 for the guitar. The singer immediately accepted and gave the drummer the guitar. The singer then left a message in the guitarist's voicemail box informing her of the sale. The next day, July 17, the guitarist showed up at the singers home with $50,000 to purchase the guitar. The singer asked the guitarist if she had gotten the voicemail message. The guitarist said that she had, but insisted that the guitar was rightfully hers. If the guitarist sues the singer for breach of contract, who will prevail? A. The singer, because her letter of July 12 was too vague to be considered a valid offer. B. The singer, because she revoked he offer by selling the guitar and informing the guitarist before the guitarist accepted the offer. C. The guitarist, because the singer made a firm offer by her letter of July 12 and could not revoke it before the guitarist's acceptance on July 17. D. The guitarist, b

B. The singer, because she revoked her offer by selling the guitar and informing the guitarist before the guitarist could accept the offer.

55. A famous singer decorated her studio with guitars she purchased from all over the world. the singer loved to entertain and held a large party in her home. At the party, a famous guitarist admired a framed two-neck guitar the singer had purchased from a rock musician in Liverpool, England . The guitarist told the singer that she would love to own such an unusual guitar. On July 10, the singer mailed a letter to the guitarist saying, "I have been pondering about how much you liked the guitar you saw at my party, and i want you to own it. The price is $50,000." The guitarist was pleased to receive the letter on July 12. Unknown to the singer, the guitarist had already mailed the on July 11, offering to purchase the guitar for $50,000. The singer received the guitarist's letter on July 15. On July 16, a drummer, who had also attended the party and admired the same guitar, visited the singer and offered $51,000 for the guitar. The singer immediately accepted and gave the drummer the guitar. The singer then left a message in the guitarist's voicemail box informing her of the sale. The next day, July 17, the guitarist showed up at the singer's home with $50,000 to purchase the guitar. The singer asked the guitarist if she had gotten the voicemail message. the guitarist said that she had, but insisted that the guitar was rightfully hers. If the guitarist sues the singer for breach of contract, who will prevail? A. the singer, because her letter of July 12 was too vague to be considered a valid offer. B. The singer, because she revoked her offer by selling the guitar and informing the guitarist before the guitarist accepted the offer. C. the guitarist, because the singer made a firm offer by her letter of July 12 and could not revoke it before the guitarist's acceptance on July 17. D. The guitarist because the guitarist

B. Yes, because the cabinet maker had not yet accepted the offer.

56. A housing contractor offered to hire an expert cabinet maker to design and install 10,000 rare and expensive agarwood cabinets for a new upscale housing development. Three days later, before the cabinet maker had accepted the offer, the contractor told the cabinet maker that he had changed his mind. Ten days later, the cabinet maker learned that the contractor hired his unemployed, inexperienced nephew for the job. The cabinet maker filed suit against the contractor. Should the contractor prevail? A. Yes, because adequate consideration was never discussed. B. Yes, because the cabinet maker had not yet accepted the offer. C. No, because as a professional, the contractor's offer is a firm offer and therefore irrevocable for a reasonable period of time. D. No, because three days is an unreasonable amount of time in which to revoke an offer.

D. The designer, because the parties did not have a valid contract.

57. After a two week unpaid internship, a designer offered his services to an architect for $150 per hour. The architect replied, "Sounds good but I'll get back to you tomorrow." The next day, just as the architect was about to accept the designer's offer to work for her, the architect received a text message from the designer that said, "leaving for parts unknown on vacation, I need to clear my head. I'll call when I get back." In need of immediate services for a big project, the architect was forced to hire another designer for $250 per hour. The architect then filed an action for breach of contract against the designer seeking to recover the extra expenses she incurred. Who should prevail in the action? A. The architect, because she detrimentally relied on the graphic artist's promise of performance, causing the creation of an enforceable contract. B. The architect, because the designer's vacation deprived her of the benefit of the bargain. C. The designer, because the architect's refusal acted as a counteroffer, which effectively revoked the designer's offer. D. The designer, because the parties did not have a valid contract.

C. The fabricator, because the manufacturer was required to hold the offer open for 60 days.

58. On January 1, an adhesive manufacturer offered to sell 50 pints of special high strength flight grade structural epoxy adhesive to an airplane fabricator for $50,000. In return for $500, the manufacturer gave the fabricator a signed written statement the recited the offer and stated that the manufacturer promised not to revoke the offer for a period of 60 days. Three weeks later, on January 21, the fabricator wrote to the manufacturer: "If you cannot discount the price by $50 per pint of adhesive, we will not be able to make the purchase from you." The manufacturer received the letter on January 28 and decided on that day to sell the adhesive to the fabricator's competitor, who was happy to buy all 500 pints of the adhesive at full price. On February 14, after receiving an influx of new orders for wing parts and propellers, the fabricator changed his mind and sent the manufacturer a letter stating: "I hereby accept your offer to sell the 500 pints of adhesive for $50,000. Please find a cashier's check enclosed for the full amount." The manufacture received the letter and check by same day courier service on February 14. The manufacturer informed the fabricator that he no longer had the adhesive material in stock. The fabricator became livid because he could not fulfill his orders and filed suit against the manufacturer for breach of contract. Who should prevail? A. The manufacturer, because the offer was terminated when the fabricator learned of the sale to the competitor on January 28. B. The manufacturer, because the offer was terminated when the fabricator sent its letter of January 21. C. The fabricator, because the manufacturer was required to hold the offer open for 60 days. D. The fabricator, because the offer was terminated when the manufacturer received the letter and check on February 14.

B. The uncle, because his text message to the student operated to revoke his offer.

59. A law student received a letter from his uncle, stating that he would make his beachfront summer home available for rent for the summer. The uncle indicated that, while he often rented out the house for $3,000 or more per week, he would allow the student to rent it for $1,700 a week if the student agreed to paint the porch and mow the law once a week from July through August. The letter stated that if the student wished to accept the offer, he should send his reply by mail to the uncle's Post Office box, and that the deal would be effective upon the uncle's receipt of the letter. The student was extremely excited at the prospect of renting the beach house and envisioned many late night parties on the beach. The student immediately sent his acceptance of his uncle's offer by third party over-night priority delivery. That evening, he received a text message from his uncle indicating that he had changed his mind and that he and his companions would be spending the summer in the summer home. After reading the text message, the student became irate and filed suite against his uncle for breach of contract. Who will prevail? A. The uncle, because the student's failure to send his response by mail as directed caused the offer to lapse. B. The uncle, because his text message to the student operated to revoke his offer. C. The student, once his uncle receives the letter of acceptance as stated in the offer. D. The student, because his acceptance of the offer was effective once he sent his letter by overnight priority delivery.

B. The company's fax on June 20 formed a valid contract with the manufacturer.

61. A "green" company wanted to install solar panels around the perimeter of the company's property to help heat the outdoor employee pool. The company contacted a solar panel manufacturing company to investigate purchasing the solar panels. The solar panel manufacturer estimated that the company needed 250 panels, and offered the panels to the company at $50 per panel, delivery included. The solar panel manufacturer indicated that they would keep their offer open until July 1. On June 15, the company wrote to the manufacturer asking if they would sell 200 panels to them under the same terms. The manufacturer did not respond. On June 20, the company sent a fax to the manufacturer indicating that they wanted to purchase 250 panels at $50 each, delivery to the company's property to be included. Which of the following is accurate? A. The company's fax on June 20 was not an effective acceptance, because the manufacturer did not indicate they would accept an offer by fax. B. The company's fax on June 20 formed a valid contract with the manufacturer. C. The company's letter on June 15 constituted the company's substantial acceptance of the manufacturer's offer. D. The company's letter on June 15 constituted a counteroffer that was not accepted by the manufacturer.

D. She will be able to disaffirm the lease, because she recently turned 18 years of age.

62. Shortly after her a birthday, a 17-year-old was drafted in the first round by a leading professional soccer team. She celebrated her signing by signing a ten-year lease for a high-end, one-of-a-kind Italian sports car. One year later, while celebrating her 18th birthday, the soccer player wrecked the car. One week after the accident, the soccer player seeks to disaffirm the lease. Which of the following is most accurate?: A. She will not be able to disaffirm the lease, because she is no longer a minor. B. She will not be able to disaffirm the lease, because the lease constituted a contract for necessaries. C. She will be able to disaffirm the lease, because the ten-year lease term was an unconscionable length of time for a car lease to a minor. D. She will be able to disaffirm the lease, because she recently turned 18 years of age.

B. No contract was formed, because a posted offer has no legal effect.

63. On October 1, a manufacturer of golf balls mailed to a chain retailer of golf accessories the following written offer: "Will sell 1,000 cases of the newest extra long range golf balls at our list price of $100 each. Available for immediate delivery. Please respond ASAP by return mail." Also on October 1, unaware of the manufacturer's offer, the retailer mailed a letter to the manufacturer containing the identical terms: "Will purchase 1,000 cases of the newest extra long range golf balls at your list price of $100 each." Both letters were mailed through the U.S. postal system. As of October 3, neither party had received the other's correspondence. Which of the following statements is most accurate? A. No contract was formed, because there was a "meeting of minds" but no acceptance. B. No contract was formed, because a posted offer has no legal effect. C. A contract was formed with UCC gap filler provisions controlling for delivery and payment terms D. A contract was formed when the retailer mailed its letter because the cross-communications contained identical terms.

B. No contract was formed, because a posted offer has no legal effect.

63. On October 1, a manufacturer of golf balls mailed to a chain retailer of golf accessories the following written offer: "Will sell 1,000 cases of the newest extra long range golf balls at our list price of $100 each. Available for immediate delivery. Please respond as soon as possible by return mail. "Also on October 1, unaware of the manufacturer's offer, the retailer mailed a letter to the manufacturer containing the identical terms: "Will purchase 1,000 cases of the newest extra long range golf balls at your list price of $100 each." Both letters were mailed through the U.S. postal system. As of October 3, neither party had received the other's correspondence. Which of the following statements is most accurate? A. No contract was formed, because there was a "meeting of the minds" but no acceptance. B. No contract was formed, because a posted offer has no legal effect. C. A contract was formed with U.C.C. gap filler provisions controlling for delivery and payment terms. D. A contract was formed when the retailer mailed its letter because the cross-communications contained identical terms.

D. Yes, because the parties made a mutual mistake.

64. A woman inherited a champion French poodle from her mother. Not knowing anything about show dogs, the woman put the dog up for sale for $300, describing it as a "fixed" pet quality dog, not suitable for breeding. A young woman purchased the poodle for her sister, a dog lover who specifically wanted a neutered, more docile dog to play with her young children. A subsequent examination revealed that the dog, in fact, was not "fixed" and was therefore worth $6,500 as a stud dog. When the seller learned the truth, she filed a lawsuit seeking the return of the dog. Should the seller prevail? A. No, because the law holds an offeror responsible for his own mistake. B. No, because $300 was adequate consideration for the sale of the dog. C. Yes, because the law does not aid unclean hands. D. Yes, because the party made a mutual mistake.

A. The collector, because his friend was not aware of the offer when he told the collector about his uncle.

65. A long time baseball card collector always wanted an original Mickey Mantle rookie card but had never been able to afford one. Following a severe slip and fall on the ice, he received a large insurance settlement. He placed an ad in the paper offering to "pay $100 to the first person who can provide me a solid lead on an authentic 1951 Micky Mantle rookie card in pristine condition." A friend knew that the collector had always wanted the card, but was not aware of the ad. One day, the friend told the collector that his uncle had a Mantle rookie card that he might be willing to part with for the right price. One week later, the collector contacted the uncle and bought the card for $5,000. The card was indeed an authentic 1951 Mickey Mantle rookie card in pristine condition. The friend found out about the ad and demanded that the collector pay him $100. The collector refused to pay claiming that the card was not "in pristine condition." The friend filed suit against the collector in small claims court. Who should prevail? A. The collector, because his friend was not aware of the offer when he told the collector about his uncle. B. The collector, because his advertisement was not an offer. C. The friend, because the collector bought the card in pristine condition based on the lead he provided. D. The friend, because the friend performed as requested by the offer.

A. The collector, because his friend was not aware of the offer when he told the collector about his uncle.

65. A long time baseball card collector always wanted an original Mickey Mantle rookie card but had never been able to afford one. Following a severe slip and fall on the ice, he received a large insurance settlement. He placed an ad in the paper offering to "pay $100 to the first person who can provide me a solid lead on an authentic 1951 Micky Mantle rookie card in pristine condition." A friend knew that the collector had always wanted the card, but was not aware of the ad. One day, the friend told the collector that his uncle had a Mantle rookie card that he might be willing to part with for the right price. One week later, the collector contacted the uncle and bought the card for $5,000. The card was indeed an authentic 1951 Mickey Mantle rookie card in pristine condition. The friend found out about the ad and demanded that the collector pay him $100. The collector refused to pay claiming that the card was not in "pristine condition" The friend filed suit against the collector in small claims court. Who should prevail? A. The collector, because his friend was not aware of the offer when he told the collector about his uncle. B. The collector, because his ad was not an offer. C. The friend, because the collector bought the card in pristine condition based on the lead he provided. D. The friend, because the friend performed as requested by the offer.

A. The veterinarian because the owner has no legal basis on which to rescind a valid contract.

66. A famous poodle named Bark won the most competitive dog show in the United States two years in a row. Since her retirement, her owner had not been able to successfully breed her. A veterinarian specializing in new techniques for breeding show dogs that have not been able to conceive approached the dog's owner, explaining that he had always been a devotee of dog shows and had had a lifetime ambition to own a winning poodle. The veterinarian did not tell the owner that he wished to try a new technique of Bark. The owner, who was merely in dog shows for the money, sold bark to the veterinarian for $25,000, a reasonable price for a barren, retired dog, but far less than the worth of the dog if she could be bred. Soon after the veterinarian purchased the dog, he extracted the eggs from her ovaries, fertilized them in a test tube, and implanted them in her womb. When the owner learned that Bark was pregnant with a little, the owner sued the veterinarian to rescind the sale. Who should prevail? A. The veterinarian, because the owner has no legal basis on which to rescind a valid contract. B. The veterinarian, because he failed to disclose that he specialized in the breeding of infertile animals. C. The owner, because her ignorance of the fact that the dog was capable of being bred successfully constituted a unilateral mistake. D. The owner, because a mutual mistake is grounds for rescinding the contract.

D. Promissory Estoppel

67. A young man liked to hang around a local granite shop after school to watch the stone masons cut and polish the granite. The man dreamed of opening his own granite kitchen remodeling business one day. He helped out by doing various odd jobs around the shop. One day, the shop owner asked him if he'd like a candy bar. The young man refused, saying, "The candy bar causes me to break out. I can't get a date because of my skin problems as it is." The shop owner had terrible skin problems as a teenager and felt sorry for the young man. He said "I'll pay for the skin doctor. Go get your zits looked at by a dermatologist, and I'll pay the doctor's bill and the bill for any medicine you need." The next day, the young man went to the board certified dermatologist, who examined the man, gave him an injection and prescribed a series of antibiotics. The doctor's bill and medicine cost $1,450. The young man brought the receipts to the shop owner. The owner felt that the charges were outrageous and refused to pay. What is the young man's best legal argument for requiring the owner to pay the bills? A. Quantum merit B. Adequate consideration C. Brea of implied contract D. Promissory estoppel

C. The father's promise is enforceable, because sufficient consideration exists.

68. A medical student was accepted by a medical school for the fall term. Several generations of the student's family had attended this prestigious medical school. In fact, the student's grandfather had a research wing named after him. Two weeks before the start of the fall term, at a party to celebrate the student's acceptance into the school, her father announced to the student, in the presence of more than 10 party-goers, "My favorite daughter, it's your obligation to uphold the family tradition for excellence at the school. In regard, if you promise to study a minimum of seven hours a day, I will pay you $5,000 for each 'A' you achieve during your first year; $10,000 for each 'A' you achieve during your second year; and $15,000 for each 'A' you achieve during your third year." The student answered, "It's a deal. You are going to lose a lot of money Dad." During the first year, the student studied at least seven hours a day and received four A's. When the student asked her father to pay up, her father told her a story about a famous legal case where a student could not collect from an uncle who promised to pay for grades for "want of consideration." The student sued her father for breach of contract claiming damages of $20,000. The father defended on the grounds of lack of consideration. Which of the following is correct? A. The father's promise is unenforceable, because it constituted a conditional promise to make a gift. B. The father's promise is unenforceable, because it was non-detrimental. C. The father's promise is enforceable, because sufficient consideration exists. D . The father's promise is enforceable, but it constituted a voidable proposal.

C. The artist, because his announcement was merely an invitation for an offer.

69. An artist was tired of living in the city. He wanted to move to the countryside to inspire his painting. He placed the following classified announcements in the local paper. "I am interested in selling my Condon for any reasonable price. I am moving to the country. First come, first served. "When a local real estate broker saw the ad, he could not believe his luck. The condo was in great location and would sell in no time allowing him to turn a huge profit for almost no effort. He jumped on the subway and raced to the condo. As he stepped out of the station, the broker saw the artist, who informed him that he was the first to come in response to the announcement. The broker told the artist that he wanted to purchase the condo the same day for $400,000 in cash with no contingencies. The fair marker value of the condo was $350,000. The artist told the broker that he had a spiritual awakening and realized that he should not sell the condo. The broker was angry because he had arranged to borrow the money at 10% interest rate. He filed an action seeking specific performance to compel the artist to sell hi the property for $400,000. Who will prevail? A. The broker, because he accepted the artist's offer by communicating his desire to purchase the property and borrowing the money. B. The broker, because he was the first person to respond to the announcement. C. The artist, because his announcement was merely an invitation for an offer. D. The artist, because the broker did not yet tender payment of the purchase price.

D. Yes, because the order was an offer that the seller effectively accepted before the buyer attempted to revoke it.

70. A buyer mailed a signed order to a seller that read: "Please ship us 10,000 widgets at your current price." The seller received the order on January 7, and that same day mailed to the buyer a letter, which was properly stamped, addressed, and signed, stating that the order was accepted at the seller's current price of $10 per widget. On January 8, before receipt of the seller's letter, the buyer telephoned the seller and said, "I hereby revoke my order." The seller protested to no avail. The buyer received the seller's letter on January 9. Because of the buyer's January 8 telephone message, the seller never shipped the goods. Under the relevant and prevailing rules, is there a contract between the buyer and the seller as of January 10? A. No, because the order was an offer that could be accepted only by shipping the goods; and the offer was effectively revoked before shipment. B. No, because the buyer never effectively agreed to the $10 price term. C. Yes, because the order was, for a reasonable time, an irrevocable offer. D. Yes, because the order was an offer that the seller effectively accepted before the buyer attempted to revoke it.

C. The woman, because the captain was under a preexisting duty.

79. A woman was about to celebrate her 75th birthday. Her children surprised her with a 14-day trip on a large luxury cruise liner. The woman, who could not swim and was terrified of water, approached the ship's captain on the first night of the trip and said, "I'm only doing to please my family. I hate boats! If you can get me safely back home to dry land, I will pay you $1,000." The captain gave her his promise that she would return home safe and sound. When the ship returned to port two weeks later, the captain approached the woman as she disembarked and asked for the $1,000. The woman laughed and said, "Oh, that! I guess I was just being silly." The captain sued the woman for breach of contract. The court should rule in favor of A. The captain, because the woman made a valid offer which the captain accepted by performing B. The captain, because service contracts lasting less than a year do not need to be in writing C. The woman, because the captain was under a preexisting duty. D. The woman, because her conversation with the captain was based on an abnormal fear.

B. The woman will win, because she justifiably relied on her grandfather's promise.

80. A young woman graduated from a prestigious law school at the top of her class. Knowing that it had always been her grandfather's hope that she would join his practice, a small law firm in a rural town, the woman went to work for her grandfather after graduation. After a year of working there, she received an attractive offer from a large international law firm with a six-figure salary and an array of benefits. After telling him of the offer, the woman's grandfather told her that, while he could not afford to pay her as much of a salary, he would give her his promise that when he died, his estate would pay all of her undergraduate and law school loans. The woman rejected the offer from the firm and continued to work in the small town with her grandfather for a minimum wage. The grandfather died three years later with a valid will which left his entire estate t a charitable organization. His executor refused to honor the granddaughter's request for payment of her student loans. If the woman sues the estate to enforce grandfather's promise, what is the most likely result? A. The woman will win, because a bilateral contract was formed when she began to perform at her grandfather's firm. B. The woman will win, because she justifiably relied on her grandfather's promise. C. The woman will lose, because the grandfather's promise was not in writing. D. The woman will lose, because the promise was illusory.

A. The sister because there was a bargained-for exchange.

81. A man approached his sister who was planning on having a baby. The man, who was a huge baseball fan, loved the number seven. One day, he said to his sister, "If you name your baby Seven, I will pay you $499 per month for two years." The man's sister agreed and named her first son Seven, the number of the man's favorite baseball player. Afterwards, the man failed to pay and told his sister he decided not to pay her the money because someone else had named their baby Seven. The sister was so annoyed that she sued her brother for breach of contract. Who should prevail? A. The sister, because there was a bargained-for exchange. B. The sister, because naming the child was a condition of a gift made in consideration of carrying out a moral obligation. C. The man, because naming the child was a mere gift promise unsupported by consideration. D. The man, because the sister did not experience any recognizable legal detriment in the naming of her child.

C. Unenforceable, because he promise was not supported by legally sufficient consideration.

82. A baseball player and his agent negotiated a lucrative contract for the upcoming season. As a result, the team owner orally promised the player a $100,000 bonus payable after the last game of the regular season because of the player's "good attitude and strong leadership skills." At the end of the season, the owner informed the player's agent that because attendance was down and profits were not as large as he expected, the promised bonus would not be paid. The player filed suit against he owner for breach of contract. How is the court most likely to rule regard the legal effect of the promise? A. Enforceable, because the player conferred a material benefit on the owner in exchange for the owner's promise to pay. B. Enforceable, because the owner was legally obligated to pay the bonus as he promised. C. Unenforceable, because the promise was not supported by legally sufficient consideration. D. Unenforceable, because the promise was not in writing.

D. Want of consideration.

83. A medical student was involved in an accident while driving her brother's motorcycle. Her failure to yield at a stop sign caused her to collide with a car operated by a minister. Both the minister and the medical student were seriously injured in the accident. The student was in a medically induced coma due to a brain injury. The medical student's brother believed that since the student had been driving his vehicle, that he himself was liable for damages resulting from the accident. The brother went to visit the minister in the hospital, where he was in a full body cast because of spinal injuries from the accident. The brother told the minister that he would personally reimburse the minister for any out of pocket medical expenses resulting from the accident. The brother also told the minister's doctor to take good care of the minster, and that he would "take care of" all the minister's bills. A month later, the medical student died in the hospital. She had no assets. The minister filed suit against the brother to recover for medical expenses, pain and suffering, and lost wages resulting from the accident. Which of the following is the brother's best defense? A. The statute of frauds. B. The indefinite nature of his promise to the minister. C. The brother was mistaken as to whether he was liable for damages. D. Want of consideration

D. The collector will be able to rescind the contract, based on a mutual mistake.

84. A young man inherited his uncle's home. While cleaning out the attic, he found a book sealed in plastic with a note attached reading "David Copperfield-1st edition." Without opening the plastic covering, he offered the book for sale in a publication specializing in rare books. Several days later he received a phone call from a collector who offered him $500,000 for the book. The young man had a contract prepared listing the book as a "first edition of a David Copperfield, by Charles Dickens." He signed the contract and mailed it, along with the book to the buyer. The following day he received an offer for $550,000 which he refused saying that the book had already been sold. When the buyer received the book, he took it to a reputable authenticator, who determined that the book was not a first edition but a third edition only worth $300. The collector returned the book with a letter saying that he was rescinding the contract. If the young man sues the collector for breach of contract, which of the following is accurate? A. The young man will be able to enforce the contract because he acted in good faith. B. The young man will be able to enforce the contract because he relied to his detriment on the agreement with the collector. C. The collector will be able to rescind the contract, because it was based on fraud. D. The collector will be able to rescind the contract based on a mutual mistake.

A. None, because the agreement was unenforceable under the statute of frauds.

90. In anticipation of a busy winter season, the owner of a dive shop in Key West telephoned a surf board manufacturer and ordered 100 of the latest model light-weight graphite surf boards for delivery on December 1. The manufacturer promised to deliver 100 boards at the price of $150 per board. On November 15, the manufacturer realized they only had 90 boards in stock. Without notifying the dive shop owner, the manufacturer delivered the 90 boards to the dive shop on December 1. When the dive shop owner learned that the shipment was for 90 boards instead of 100 boards, he refused to accept delivery and refused to make any payment. The dive shop owner ordered , accepted and paid for 100 replacement boards from another manufacturer. The cost of the replacements was $20,000. The dive shop owner brought suit against the manufacturer for breach of contract. What damages, if any, is the dive shop owner entitled to? A. None, because the agreement was unenforceable under the Statute of Frauds. B. $5,000, the cost of replacement minus the contract price. C. $1,500, the cost of the 10 board shortage. D. $15,000, the entire contract price. A. None, because the contract was unenforceable under the Statute of Frauds.

A. None, because the agreement was unenforceable under the Statute of Frauds.

90. In anticipation of a busy winter season, the owner of a dive shop in Key West telephoned a surf board manufacturer and ordered 100 of the latest model light-weight graphite surf boards for delivery on December 1. The manufacturer promised to deliver 100 boards at the price of $150 per board. On November 15, the manufacturer realized they only had 90 boards in stock. Without notifying the dive shop owner, the manufacturer delivered the 90 boards to the dive shop on December 1. When the dive shop owner learned that the shipment was for 90 boards instead of 100 boards, he refused to accept delivery and refused to make any payment. The dive shop owner ordered, accepted, and paid for 100 replacement boards from another manufacturer. The cost of the replacements was $20,000. The dive shop owner brought suit against the manufacturer for breach of contract. What damages, if any, is the dive shop owner entitled to? A. None, because the agreement was unenforceable under the Statute of Frauds. B. $5,000, the cost of replacement minus the contract price. C. $1,500, the cost of the 10 board shortage. D. $15,000, the entire contract price.

D. The teenager can only repudiate the contract within a reasonable time after her 18th birthday.

92. A man sold his $1,500 racing bicycle to a 17-year-old neighbor. The teenage did not tell her parents about the deal because her 18th birthday was the following week. The teenager figured that she didn't need her parents' permission because the age of majority in the jurisdiction was 18. When the teenager's parents found out she paid the neighbor $1,500 for a used racing bicycle, they were furious. Which of the following statements is most accurate?: A. The teenage cannot repudiate the contract before her 18th birthday. B. The teenager's parent's can repudiate the contract before her 18th birthday. C. Neither the teenage nor her parents can repudiate the contract. D. The teenager can only repudiate the contract within a reasonable time after her 18th birthday.

C. The couple owes the neighbor $100 if he completes the tree removal.

95. A retired couple owned a home surrounded by a variety of large, beautiful trees. One evening a violent thunderstorm brought down one of the largest trees. It fell directly over the couple's driveway, blocking access to their garage and vehicles. The couple phoned several tree removal services, but all of their crews were assisting other customers. The husband then went to his neighbor, who owned a chain saw, and offered him $100 if he would come and cut up the tree. Within the hour the neighbor appeared with his chain saw and began cutting and removing tree branches. He had removed almost half of the tree when a township vehicle arrived. The driver told the couple that he was authorized to clear the debris free of charge. The husband went to the neighbor and said "Thanks anyway, but the deal is off -- this guy will do it for free." Which of the following accurately reflects the situation? A. The couple owes nothing because the township was under a preexisting duty to remove the tree. B. The couple owes nothing because the husband withdrew his offer before the neighbor completed his performance. C. The couple owes the neighbor $100 if he completes the tree removal. D. The couple owes the neighbor $50 for services rendered.

D. The model will lose, because there was no contract.

96. A fashion designer interviewed a model for a job in an upcoming photo shoot. He told her that the work would last for three days, and she would earn $1,000 per day plus expenses. The model was interested but wanted a written contract before she would commit to the booking. The designer mailed her a written contract outlining the terms they had discussed. When the model received the contract, she sent the designer an e-mail stating. "I have conserved your offer, but I cannot do the job for less than $1,500 per day. Please let me know if this is acceptable." The designer did not reply to the e-mail and eventually hired another model to do the work for $1,000 per day. When the first model learned of the new hire, she sued the designer for breach of contract. Which of the following is a correct statement? A. The model will win, and be awarded damages of $1,000. B. The model will win, and be awarded damages of $1,500. C. The model will lose, because she responded by e-mail. D. The model will lose, because there was no contract.

C. The niece, because the aunt did not effectively communicate the revocation of her offer to the niece.

97. A woman owned a valuable diamond necklace which her niece had long admired and one day hoped to purchase from her aunt. Eventually the aunt offered to sell the necklace to her niece, but only if the niece could pay the asking price by January 1. The niece agreed. On December 20, the woman attended her company Christmas party and wore the necklace. The CEO's mother was visiting for the holidays. She was so taken with the necklace that she offered to purchase then and there for more money than the niece had agreed to pay. The woman sold the necklace on the spot. Two days later the niece appeared at her aunt's home with a check and asked for the necklace, only to be told she was too late -- it had already been sold. If the niece sues her aunt for breach of contract, judgement should be in favor of whom? A. The aunt, because she was entitled to revoke her offer at any time prior to acceptance. B. The aunt, because the niece had not yet paid for the necklace when the aunt sold it. C. The niece, because the aunt did not effectively communicate the revocation of her offer to the niece. D. The niece, because she was ready to perform before the deadline had passed.

D. The caterer will win, because the teacher failed to accept the offer before their conversation ended

98. A teacher and a caterer who lived in the same neighborhood were guests at a dinner hosted by a mutual friend. During the cocktail hour, the teacher told the caterer that her daughter had recently become engaged and she was planning a large party to celebrate the event. The caterer offered her services and the woman discussed various ideas until dinner was served. During dinner they were seated at opposite ends of the table and no further conversation occurred between them that evening. The following week the teacher phoned the caterer to say that she had decided to engage her services for the party. The caterer said that she was sorry but, as she had not heard from the woman, she had accepted another booking for the same evening. If the teacher sues the caterer for breach of contract, which of the following statements is accurate? A. The teacher will win, because she accepted the caterer's offer within a reasonable time. B. The teacher will win, because the caterer did not revoke her offer prior to the teacher's acceptance of it. C. The caterer will win, because the offer was not in writing. D. The caterer will win, because the teacher failed to accept the offer before their conversation ended.

C. The broker, because he was free to accept the partner's offer.

99. An investment broker was given two tickets to a playoff game featuring his home team's popular hockey franchise. A family wedding scheduled for the same night forced him to send a text message to his colleagues saying, "Just my luck! Scored tickets to the big game but can't use 'em. Wife's cousin getting married. Yippee -- rubber chicken! Who wants 'em? Let's hear your bids ASAP!" A young intern texted back within minutes, saying, "I want 'em!! I'll pay $1,000 right now!" An hour later one of the firm's founding partners came to the broker's office offering $500 for the tickets saying that they would be a perfect Christmas present for his sons. The broker, albeit reluctantly, accepted a check for $500 and gave the tickets to the partner. When the intern heard the partner bragging that he had gotten the tickets "for peanuts -- only $500," he sued the broker for breach of contract. Judgement should be for whom? A. The intern, because he was the first to accept the offer. B. The intern, because he made the highest bid. C. The broker, because he was free to accept the partner's offer. D. The broker, because the partner was the first person to pay for the tickets.

A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and: A is missing a quantity term B is missing the price term C states the quantity to be purchased and sold as "all that the buyer requires" D states the quantity to be purchased and sold as "all that the seller produces"

A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and is missing a quantity term. The quantity term is the only term that is absolutely required to make a communication an offer when the sale of goods is involved. Most other terms can be implied or supplied later in the contract. A communication may be considered definite enough to be an offer for the sale of goods despite a missing price term. If the price term is not included, a reasonable price can be implied. The buyer's requirements and the seller's output are valid quantity terms sufficient to make a communication an offer for the sale of goods. Although these terms do not state a specific quantity, the quantity is capable of being made certain by reference to objective, extrinsic facts (i.e., the buyer's actual requirements and the seller's actual output).

What is a "constructive" condition? A A contractual provision providing that a party does not have a duty to perform unless some event occurs or fails to occur B A condition that is implied by a court even though it is not explicitly stated in the contract C A condition commonly found in construction contracts stating that the condition of complete performance may be excused if the party has rendered substantial performance D A contractual provision providing that the contract is not effective unless some event occurs or fails to occur

A constructive condition is a condition that is implied by a court even though it is not explicitly stated in the contract. Common examples of constructive conditions are the conditions of cooperation and notice. Constructive conditions are also known as implied conditions. In contrast, an express condition precedent is an explicit contractual provision providing that a party does not have a duty to perform unless some event occurs or fails to occur. When an entire contract is not effective unless some event occurs or fails to occur, the contract is subject to an express condition precedent, not a constructive condition. The concept of substantial performance was developed in construction cases to avoid the harsh results that could occur when complete performance is required. Under the doctrine of substantial performance, the condition of complete performance may be excused if the party has rendered substantial performance.

Which of the following statements regarding revocation and acceptance of contract offers is correct? A A revocation generally is effective when received, and an acceptance generally is effective when received. B A revocation generally is effective when received, and an acceptance generally is effective when dispatched. C A revocation generally is effective when dispatched, and an acceptance generally is effective when dispatched. D A revocation generally is effective when dispatched, and an acceptance generally is effective when received.

A revocation generally is effective when received and an acceptance generally is effective when dispatched (i.e., the mailbox rule). Under the mailbox rule, if the offeree dispatches an acceptance before he receives a revocation sent by the offeror, a contract is formed.

D. There was no contract between the parties as of June 5.

After negotiations, a scientist wrote to a carpenter and said, " I will pay you $1000 if you build a custom entertainment center in my apartment according to the measurements I am including here. I must have your reply by May 30." The carpenter replied by letter, saying "Will not do it for less than $1,500" The scientist received the reply on May 15. On May 20, the carpenter wrote to the scientist and said "I reconsidered. I will do the work for $1,000. Unless I hear from you to the contrary, I will begin work on June 5." The scientist received this letter on May 22, but did not reply to it. The carpenter, without the scientist's knowledge, then began the work on June 5. Which of the following best characterizes the legal relationship between the scientist and the carpenter as of June 5? A. A contract was formed on May 20, when the carpenter posted his letter. B. A contract was formed on May 22, when the scientist received the carpenter's letter. C. A contract was formed on June 5 when the carpenter began to work. D. There was no contract between the parties as of June 5.

An advertisement, catalog, or circular letter, listing the price at which a seller is willing to sell a product, would typically be construed as: A An offer for a bilateral contract B An invitation for an offer C A merchant's firm offer D An offer for a unilateral contract

An advertisement, catalog, or circular letter, listing the price at which a seller is willing to sell a product, would typically be construed as an example of an invitation for an offer, rather than an offer. Since there is no clearly identified offeree, there is no offer of any type, whether for a bilateral contract, consisting of the exchange of mutual promises, a unilateral contract, where the offeror requests performance rather than a promise, or any type of merchant's firm offer.

Which one of the following elements is needed for a discharge of a contract due to frustration? A An unanticipated or extraordinary act or event has made the contractual duties impossible or impracticable to perform B A subsequently enacted law or other governmental act has made the subject of matter of the contract illegal C An act of nature has destroyed the contract's subject matter or the designated means for performing the contract D An unforeseen act or event has completely or almost completely destroyed the purpose of the contract

An element of frustration is that an unforeseen act or event has completely or almost completely destroyed the purpose of the contract. Frustration will exist if the purpose of the contract has become valueless by virtue of some supervening event not the fault of the party seeking discharge. If the purpose has been frustrated, a number of courts will discharge contractual duties even though performance of these duties is still possible. The elements necessary to establish frustration are: (i) some supervening act or event leading to the frustration; (ii) at the time of entering into the contract, the parties did not reasonably foresee the act or event occurring;(iii) the purpose of the contract has been completely or almost completely destroyed by this act or event; and (iv) the purpose of the contract was realized by both parties at the time of making the contract. A contract can be discharged by impossibility or impracticability when an unanticipated or extraordinary act or event has made the contractual duties impossible or impracticable to perform. Contractual duties can also be discharged by a subsequent act of nature that destroys the contract's subject matter or the designated means for performing the contract. But neither of these is considered discharge by frustration. A discharge by illegality occurs when the subject matter of the contract has become illegal due to a subsequently enacted law or other governmental act. This is often referred to as "supervening illegality."

An offer for a bilateral contract can be accepted by: A Full performance only B Beginning performance only C A promise to perform only D A promise to perform or the beginning of performance

An offer for a bilateral contract may be accepted either by a promise to perform or by the beginning of performance. Note: Unless an offer specifically provides that it may be accepted only through performance, it will be construed as an offer to enter into a bilateral contract. In contrast, a unilateral contract can be accepted only by full performance . Note that the beginning of performance may create an option so that the offer is irrevocable. However, the offeree is not obligated to complete performance merely because he has begun performance, as only complete performance constitutes an acceptance of the offer.

Which of the following statements is correct? A Both an ordinary option contract and a merchant's firm offer require that the offeree give consideration B A merchant's firm offer requires that the offeree give consideration, whereas an ordinary option contract does not C An ordinary option contract requires that the offeree give consideration, whereas a merchant's firm offer does not D Neither an ordinary option contract nor a merchant's firm offer requires that the offeree give consideration

An ordinary option contract is a distinct contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer. In contrast, under Article 2's merchant's firm offer provision, there are circumstances in which a promise to keep an offer open is enforceable even if no consideration has been paid to keep the offer open: A merchant's firm offer arises when a merchant offers to buy or sell goods in a signed writing and the writing gives assurances that the offer will be held open.

When should the nonbreaching party treat an otherwise minor breach as a material breach? A When the breach is part of a divisible contract B When the breach causes the nonbreaching party damages C When the breach is coupled with an anticipatory repudiation D When the breach relates to the timing of performanceq

If a minor breach is coupled with an anticipatory repudiation, the nonbreaching party may treat it as a material breach. Thus, the nonbreaching party may sue immediately for total damages and is permanently discharged from any duty of further performance. The courts hold that the nonbreaching party must not continue on with the contract, because to do so would be a failure to mitigate damages. There is no reason that a minor breach that is part of a divisible contract should be treated as a material breach. In fact, in a divisible contract, recovery is available for substantial performance of a divisible part even if there has been a material breach of the entire contract. Even a minor breach can cause the nonbreaching party damages. The effect of a minor breach is to provide a remedy for the immaterial breach to the aggrieved party. The aggrieved party is not relieved of her duty of performance under the contract by a minor breach, unlike in the case of a material breach. Unless the nature of the contract is such as to make performance on the exact day agreed upon of vital importance, or the contract by its terms provides that time is of the essence, a failure by a promisor to perform at the stated time will not be material. Thus, a minor breach that relates to the timing of performance generally should not be treated as a material breach

If an accord agreement is breached: A by the debtor, the creditor may sue on both the original contract and for breach of the accord agreement B by the debtor, the creditor may sue either on the original contract or for breach of the accord agreement C by the creditor by refusing to accept the performance agreed to in the accord, the debtor is entitled to punitive damages D by the creditor by suing on the original contract, the debtor may immediately sue for damages for breach of the accord agreement

If an accord agreement is breached by the debtor, the creditor may sue either on the original contract or for breach of the accord agreement, but not on both. If the accord agreement is breached by the creditor by suing on the original contract, the debtor may either: raise the accord agreement as an equitable defense and ask that the contract action be dismissed or wait until the creditor is successful in the action (i.e., until the debtor is damaged) and then bring an action at law for damages for breach of the accord contract. The debtor may not immediately sue for damages. If the accord agreement is breached by the creditor refusing to accept the performance agreed upon in the accord, the debtor may bring an action for breach of the accord agreement, but is not entitled to punitive damages. Punitive damages generally are not awarded in contract cases.

Nonfulfillment of a condition: A will excuse a duty to perform that was subject to the condition B gives rise to liability for nonperformance C does not excuse the other party's duty to perform under the contract D will result in a breach of contract

Nonfulfillment of a condition normally will excuse a duty to perform that was subject to the condition. A condition is a provision the fulfillment of which creates or extinguishes a duty to perform under a contract; thus, nonfulfillment of a condition will excuse the other party's duty to perform under the contract. Nonfulfillment of a condition is not a breach of contract and does not give rise to liability for nonperformance.

Which of the following is a key distinction between an anticipatory repudiation and a prospective failure to perform? A Repudiation must be unequivocal, whereas prospective failure to perform is determined by the subjective beliefs of the other party. B Repudiation is final, whereas prospective failure to perform may be retracted. C Repudiation must be unequivocal, whereas prospective failure to perform involves mere doubts. D Repudiation may be retracted, whereas prospective failure to perform is a breach and cannot be retracted.

Prospective inability or unwillingness to perform differs from anticipatory repudiation because repudiation must be unequivocal, whereas prospective failure to perform involves conduct or words that merely raise doubts that the party will perform. Repudiation must be unequivocal. However, a prospective failure to perform is not based on the subjective beliefs of the other party, but rather is judged on a reasonable person standard. Both repudiation and prospective failure to perform may be retracted, provided the other party has not yet changed position in reliance on the repudiation or prospective failure. The effect of a prospective failure is to allow the innocent party to suspend performance until she receives adequate assurances. She may treat this situation as a breach only if the assurances are not given. If a defaulting party regains his ability or willingness to perform, he must communicate that to the other party.

Under Article 2, when an offeree proposes additional or different terms during acceptance, what will the court apply to determine whether the additional or different terms become part of the contract? A The battle of the forms provision B The mailbox rule C Gap fillers D The mirror image rule

The battle of the forms provision of Article 2 lists specific rules for determining what terms are included in a contract when the terms of acceptance do not match the terms of the offer. Article 2 has abandoned the mirror image rule, which requires an absolute and unequivocal acceptance of each and every term of the offer. Gap fillers are used when certain terms are not included in the contract; it does not apply to additional or different terms in the acceptance. The mailbox rule is applied to determine the timing of acceptance of a contract.

A vague term in a contract can be cured by: A the presumption that the parties' intent was to include a reasonable term B gap fillers C part performance D quantum meruit

Where part performance supplies the needed clarification of the terms, it can be used to cure vagueness. Gap fillers and the presumption that the parties' intent was to include a reasonable term go to supplying missing, rather than vague, terms. When the parties have included a term that makes the contract too vague to be enforced, the court will not apply a gap-filling term or a presumption to cure the problem. Quantum meruit is another term for quasi-contractual recovery to remedy unjust enrichment. Although it does not cure a vague term, it is available as a remedy for a party who performs despite a vague term that causes a contract to fail.