Contracts I Multiple Choice

The day after making an offer, Offeror was hit by a truck and went into a coma. Two weeks later, while Offeror was still in a coma, Offeree sent a text message to Offeror saying, "Sorry about the accident. I accept." Is there a contract based on Offeror's offer? a. Yes, if there is some chance Offeror will eventually recover and become conscious. b. Yes, sudden mental incapacity extended the duration of the offer for a reasonable time, and Offeree accepted within such time. c. No, Offeror's mental incapacity terminated the offer before Offeree accepted. d. No, because a text message lacks the formality required to establish mutual assent to a contract.

c. No, Offeror's mental incapacity terminated the offer before Offeree accepted.

Owner promised to pay $100,000 in return for Builder's promise of specified construction work. When Builder was half finished and Owner had paid half the price, Builder suddenly stopped working and told Owner "I won't resume work until you promise to pay a total of $120,000" (with credit for payments already made). Owner protested but needed the work done quickly and knew hiring a substitute was impractical. Owner agreed to Builder's demand. Is Owner bound by a promise to pay $20,000 over the original contract price? Traditional rules. a."Yes" if Owner signed a writing of the promise. Otherwise "no." b.Yes, Builder's resuming work is consideration for that promise. c.No, Owner received no consideration for that promise. d.No, Builder extracted that promise by duress.

c. No, Owner received no consideration for that promise.

In Sullivan v. O'Connor, if Ms. Sullivan had asked for recovery of the fee she paid to a hospital (not the defendant doctor) in connection with the first operation, what type of monetary relief would that claim represent? a. Expectation interest: lost benefit of the bargain. b. Expectation interest: "other losses." c. Reliance interest. d. Restitution interest.

c. Reliance interest

After Buyer and Seller made a contract, Buyer found a better deal with another party. Buyer repudiated the contract. Seller suffered lost benefit or other loss. Can Seller win punitive damages? a. Yes, because the breach was intentional. b. Yes, if the jury finds the breach was "malicious." c. No, a party must have actual damages to recover punitive damages. d. No, punitive damages are not available in contract law.

d. No, punitive damages are not available in contract law.

Is the following transaction likely to be a unilateral or bilateral contract? A typical "at will" employment for an agreed rate of pay, such as $15 per hour.

Unilateral

Assume Employer's defense in the previous problem was that its statement was a prediction, not a promise. Which of the following best states the issue in a trial of Worker's breach of contract lawsuit? a. Did Worker honestly believe the statement was a promise? b. Would a reasonable, disinterested observer have believed the statement was a promise? c. Did Employer honestly intend a prediction? d. Was the prediction reasonable?

b. Would a reasonable, disinterested observer have believed the statement was a promise?

Seller gave Buyer a written, signed offer that included: "In consideration for $1.00 now paid and acknowledged, I promise not to revoke this offer before Friday at 5 p.m." Buyer would have accepted on Friday, but Seller called on Thursday to revoke the offer. Seller denies receiving a "$1.00;" Buyer insists he paid. If Buyer sues Seller in Texas, what is the most important issue? a. Did Buyer pay the $1.00 described in the offer? b. Is $1.00 a pretense for consideration? c. Does Seller's recital of receipt of $1.00 preclude Seller from denying receipt of the dollar? d. Would Buyer have accepted but for Seller's revocation, and did Buyer lose a benefit of the bargain?

d. Would Buyer have accepted but for Seller's revocation, and did Buyer lose a benefit of the bargain?

Buyer and Seller met in a café and discussed a sale of goods. "Ihey shook hands on an oral contract with the essential terms and not much rnore. The next day Seller sent an "acknowledgement of order" stating ternB of the oral contract and adding standardized '"other terms" of Seller's acknowledgement, including choice of law, choice of forum, etc., and finally setting an expected delivery date. Is there a contract? a. No, Seller's acknowledgenent rescinded the oral contract. b. No, Seller's acknowledgement superseded its assent to any prior terms and constituted a new offer or counteroffer. c. Yes, provided the parties perform (deliver goods and pay), and the terms will be based on the "last shot:" Seller's acknowledgement. d. Yes, and the acknowledgement confirmed the contract while proposing sone other terms.

d. Yes, and the acknowledgement confirmed the contract while proposing sone other terms.

Buyer (a consumer) sent an "order" with its terms for a quantity of goods based on the price Seller listed on its website. Seller replied with a "confirmation" with fine print additional to and different from the website terms that were the basis of Buyer's order. Is there a contract? a. No, the parties did not use the words offer and acceptance. b. No, Seller's confirmation was not a mirror image of Buyer's c. Yes, and the contract is based on the terms of Seller's confirmation. d. Yes, and the contract is based on the terms of Buyer's order, which include terms presented on the website at the time of the order.

d. Yes, and the contract is based on the terms of Buyer's order, which include terms presented on the website at the time of the order.

When Owner's prize-winning yorkie-doodle was pregnant, she promised to deliver 'the best puppy in the litter" to Buyer in return for Buyer's promise to pay $20,000. When Owner's dog delivered six puppies, she presented one to Buyer. "No," Buyer said, that's not the best. I want the one over there," pointing to Owner's favorite puppy. Owner refused to deliver that puppy, and Buyer sued. These facts are an example of . a. an illusory promise. b. the complete omission of an essential term. c. an ambiguous essential term. d. a vague or indefinite term.

d. a vague or indefinite term.

If one party knows a material fact unknown to the other party, in which of the following settings does the law most likely require the party who knows the fact to disclose it to the other? a. The party who does not know the fact reasonably believes the other party is a good friend. b. The party who knows the fact is acting as the advisor of the other party with respect to a matter in question. c. The fact in question is "latent" in the sense that it is not easily discoverable. d. There is no duty to disclose.

BEST ANSWER - c. The fact in question is "latent" in the sense that it is not easily discoverable. But could also be - b. The party who knows the fact is acting as the advisor of the other party with respect to a matter in question.

Owner lost her home in a fire. Her contract with Insure required Insure to pay $500,000 for this loss but Insure knew she was desperate for money for shelter and clothes. Insure said, "the contract allows us 60 days to process a claim but we'll pay $250,000 today if you sign this document promising not to sue for more." Desperate for money, Owner signed. Which issue would be most important in determining whether Owner is bound by her promise not to sue for more? a.Did Owner make a gift promise, forgiving $250,000 in debt? b.Was Insure's early payment a pretense for consideration? c.Did Owner's promise cause Insure to rely? d.Could local law favor the Restatement version of duress (threat of breach of duty of good faith in existing contract).

Best answer is d. Could local law favor the Restatement version of duress (threat of breach of duty of good faith in existing contract). Second best is b.Was Insure's early payment a pretense for consideration?

Is the following transaction likely to be a unilateral or bilateral contract? A contract for construction of a building, with the owner/buyer to make progress payments during the construction.

Bilateral

Is the following transaction likely to be a unilateral or bilateral contract? A typical one-year apartment lease with an agreed rmnthly payment of rent.

Bilateral

Is the following transaction likely to be a unilateral or bilateral contract? An essay contest, with an award of $2,000 for the best essay.

Unilateral

Worker, employed "at will" by Employer received a job offer from Rival. He asked Employer, "Will there be any layoffs? If so, I think I'll take the job with Rival." Enployer said, "No, there won't be any layoffs." "1n that case," Worker said, "1'11 stay." Three months later a major customer cancelled a major order. Employer laid off workers including Worker. If Worker sues for breach of contract, which of the following might be a defense for Employer? (a) Employer's promise was illusory; (b) Employer's statement was a prediction, not a promise; (c) Employer's promise was not in writing and signed; or (d) Ernployer had a good reason to breach its promise. a and b. c and d. b and c. a and d.

a and b.

Buyer and Seller negotiated a deal by filling out a form one blank at a time. They signed the completed form. A day later, before Seller began delivery, Buyer asserted there was no contract. Seller sued. At trial Seller admitted he could not recall who signed first and "offered" and who signed second and "accepted." Buyer immediately moved to dismiss on the ground that Seller could not prove an offer and acceptance. What should the court do? a. Deny the motion to dismiss. There is evidence of a mutual manifestation of assent to the same set of terms. b. Deny the motion to dismiss. Absent evidence to the contrary, it is presumed a seller made an offer and a buyer accepted. c. Grant the motion and dismiss the case. A contract must have an offer and acceptance. d. Grant the motion and dismiss the case. Seller has not delivered and it cannot prove it relied on Buyer's promise.

a. Deny the motion to dismiss. There is evidence of a mutual manifestation of assent to the same set of terms.

How are bilateral and unilateral contracts different? a. In a unilateral contract one party makes a promise in exchange for something other than a promise. In a bilateral contract, each party makes a promise to the other party. b. In a unilateral contract each patty makes only one promise. In a bilateral contract, both parties make at least two promises. c. In a unilateral contract one party has the benefit of the bargain. In a bilateral contract, the exchange is equal. d. In a unilateral contract, only one party provides consideration. In a bilateral contract, both parties provide consideration.

a. In a unilateral contract one party makes a promise in exchange for something other than a promise. In a bilateral contract, each party makes a promise to the other party.

Seller and Buyer contracted for Seller to deliver a certain quantity of famous Blue Mountain coffee beans on September 1. Seller failed to deliver. Which of the following best states the formula for Buyer's expectation interest? a. Market value of Blue Mountain coffee beans on September I, minus the unpaid contract price, plus other loss. b. Unpaid contract price, minus market value of Blue Mountain coffee beans on September 1, plus other loss. c. Losses suffered by Buyer in relying on Seller's promise. d. Money paid by Buyer to Seller because of Seller's promise.

a. Market value of Blue Mountain coffee beans on September I, minus the unpaid contract price, plus other loss.

Employer told Worker, "If you stick with me a complete this difficult project, how ever long it takes, I'll pay you a bonus of $10,000 when the project is complete. Thirteen months later the project was complete, thanks to Worker's effort. If there IS no written, signed record of Employer's promise of a $10,000 bonus, can Employer assert the Statute of Frauds as a defense against enforcement of the promise? a. No, Employer's promise was not subject to the Statute of Frauds. b. Yes because more than a year passed between the date of the promise and completion of performance. c. Yes because the promise was of payment of more than $5,000. d. Yes because the promise was of compensation in addition to current wages.

a. No, Employer's promise was not subject to the Statute of Frauds.

Nightclub advertised, "Thursday night: half-priced entry, half-priced drinks." Clubby, a man, went to the entrance of Nightclub on Thursday night and said, "I'll take one ticket at tonight's special offer," and he handed $15 dollars (half price) to the ticket person. '"Sorry," the ticket person said, "we have too many men. Only women allowed for now." Did Nightclub breach a contract? a. No, Nightclub did not make an offer. Clubby made an offer, and Nightclub did not accept. b. No, Nightclub made an offer but it had the right to reject any acceptance it did not like. c. Yes, Nightclub made an offer and Clubby accepted. d. Yes, Clubby made an offer on terms Nightclub had already proposed, showing that both parties assented to those terrns.

a. No, Nightclub did not make an offer. Clubby made an offer, and Nightclub did not accept.

Form v. Reality And the Problem of Pretense Uncle worried he might die soon and he didn't yet have $5,000. He expected to $5,000 on the sale ofhis home but he needed the home to live in for now. He wanted to be sure his promise was legally binding after his death. He told Nephew, "1 promise $5,000 on your 21st birthday, in exchange for one dollar." Nephewhandeda dollarto Uncle. Contract? a. No. The dollar Uncle requested was a pretense for consideration. b. No. The Uncle failed to put his promise in writing. c. Yes. As far as Nephew could tell, Uncle was bargaining for a dollar. d. Yes. Uncle clearly intended his promise to be enforceable. See Restatement 71 Comment b 6

a. No. The dollar Uncle requested was a pretense for consideration. Restatement 71. Pretense: no explanation other than gift and you can't persuade anyone that it's reasonable to exchange $1 for $5,000.

A residential lease is a transfer of an interest in real property and subject to the original Statute of Frauds regardless of duration. However, most states have modem statutes applying a different rule for residential leases. Under the most common state law, when must a residential lease be in a signed writing to be enforceable? a. Only if the lease is alleged to be for a year or more. b. Only if the lease is of a house, not a multi-unit building. c. Only if the lease includes the lessee's alleged right to operate a business on the property. d. Only if the lessee has not paid a deposit equal to one month's rent

a. Only if the lease is alleged to be for a year or more.

What is the key difference between the early version of unilateral mistake and the newer version promoted by the Restatement (Second)? a. The old version required proof that a mistake was obvious, or that the other party bore some fault. The new version also allows relief if the mistake makes the contract unconscionable. b. The old version required proof that the mistake made the contract unconscionable. The new version requires proof that the mistake was obvious or that the other party bore some fault. c. The old version required that the mistaken party was not negligent. The new version allows relief even if the mistaken party was negligent. d. The old version required the mistake to be "material." The new version does not include this requirement.

a. The old version required proof that a mistake was obvious, or that the other party bore some fault. The new version also allows relief if the mistake makes the contract unconscionable.

Buyer sent an "order" with its terms for a quantity of goods based on a price Seller listed on its website. Seller replied with a "confirmation" with additional and a statement that 'this form will beconr a contract only when Buyer signs and returns it to Seller." Buyer failed to sign or return the form but paid for the goods. Seller delivered. In the event of a dispute over the quality of the goods, on what terms is their contract based? a. The parties' conduct assented to a contract based on terms common to Buyer's order and Seller's confirmation, plus default rules. b. Seller's confirmation accepted Buyer's order, and the contract is based on the of Buyer's order. c. Seller counteroffered and Buyer did not accept. There is no contract. d. Buyer's conduct assented to a contract based on Seller's counteroffer. 11

a. The parties' conduct assented to a contract based on terms common to Buyer's order and Seller's confirmation, plus default rules.

A court will enforce a promise if: a. The promisor made the promise in exchange for something (i.e., it was traded for something). b. The court (or jury) is sure the promisor made the promise. c. The promise has "pecuniary" value (there is an objective means to determine a money value of the promise). d. It would be immoral to breach the promise. 2

a. The promisor made the promise in exchange for something (i.e., it was traded for something).

In Drennan v. Star Paving, a court held that a subcontractor was legally bound by its estimate to a general contractor who used the estimate to calculate a bid for a general contract. How was the court's holding a significant extension of the idea of promissory estoppel? a. The subcontractor rnade only an offer, not a promise. b. The court did not require the general contractor to prove its reliance. c. The court extended the doctrine of promissory estoppel to transactions other than the sale of goods. d. The court did not require consideration to make the subcontractor's estimate binding.

a. The subcontractor rnade only an offer, not a promise.

In March, Farmer promised to deliver its entire June harvest of corn to Buyer in exchange for Buyer's promise to pay a set per bushel price on delivery in June. The contract price was roughly the market price in March. By June, market prices rose 50%. Buyer had switched from buying corn to quinoa for its uses and it repudiated the corn contract. If Farmer (seller) sues, what is its lost benefit of the bargain? a. Unpaid contract price minus market value of corn in June. b. Market value of com in June minus unpaid contract price. c. Market value of com on day of trial minus unpaid contract price. d. Market value of corn in March minus unpaid contract price.

a. Unpaid contract price minus market value of corn in June.

In March, Farmer promised to deliver its entire June harvest of corn to Buyer in exchange for Buyer's promise to pay a set per bushel price on delivery in June. The contract price was roughly the market price in March. By June, market prices had dropped 20%. Buyer repudiated the contract. If Farmer (seller) sues, what is its lost benefit of the bargain? a. Unpaid contract price minus market value of corn in June. b. Market value of corn in June minus unpaid contract price. c. Market value of corn on day of trial two years later minus unpaid contract price. d. Market value of com in March minus unpaid contract price.

a. Unpaid contract price minus market value of corn in June. Buyer promised to pay contract price, so formula has to start with unpaid contract price NOT market value.

Otto's car stalled on the freeway. He was about to call a tow company when a Tow Driver approached. Otto waved to the truck. and the truck stopped. "Need a tow?" Tow Driver asked. "Yes I do," Otto replied. Tow Driver attached Otto's car to the tow truck boom and drove Otto and Otto's car to a repair shop. When they arrived to the repair shop, Tow Driver asked for his fee: $250. Does Otto have a contract duty to pay? a. Yes, Otto made an implied promise to pay in exchange for service. b. Yes, Otto received a benefit and Tow Driver incurred a detriment. c. No, Otto never promised to pay. d. No, Tow Driver's favor was a form of social reciprocity, a gift.

a. Yes, Otto made an implied promise to pay in exchange for service.

House made a four-month contract with Agent to market and arrange the sale of House's home. The contract granted Agent the exclusive right to a commission on any sale of the home, even if the sale was not arranged by Agent. The contract said nothing about Agent's effort to sell the house. Is this a binding contract? a. Yes, an exclusive agency contract such as this implies the Agent's promise to use reasonable effort. b. Yes, if the parties signed a written document reciting House's promise, their conduct manifests mutual assent to be bound. c. No, Agent promised nothing and gave no other consideration in return. A promise of reasonable effort is so vague it is illusory. d. No, the terms of the contract are so one-sided it is too unfair for enforcement. 4

a. Yes, an exclusive agency contract such as this implies the Agent's promise to use reasonable effort.

Patient using prescription pain meds. Sales persuaded Patient to buy over-priced 'terrorism insurance" even though Patient's existing insurance already covered terrorism. Patient understood the insurance was a contract. However, a fact-finder would conclude that Patient would not have purchased Sales' insurance but for the effect of his prescription medicine. When Sales' insurance bill arrived, Patient refused to pay. Has Patient breached a contract? a. Yes, but the contract might be voidable if Sales had reason to know Patient's judgment was impaired at the time of the sale. b. Yes, but the contract is voidable regardless of whether Sales knew Patient's judgment was impaired. c. Yes, Patient made a binding contract because he understood he was making a contract and he understood it was for insurance. d. No, the contract was void if Patient's assent was caused by the influence of medication on his judgment.

a. Yes, but the contract might be voidable if Sales had reason to know Patient'sjudgment was impaired at the time ofthe sale.

Seller offered a building to Buyer. Buyer said, I need two weeks for Engineer to inspect the building before I accept your offer. Seller said, "I'll keep my offer open for two weeks." Seller allowed Engineer to inspect the building. However, Seller revoked his offer before two weeks and just before the Engineer completed his report. Engineer still charged Buyer $10,000. Does Buyer have a remedy under any rule we have discussed? a. Yes, under Restatement section 87(2). b. Yes, under the UCC "firrn offer" rule. c. Yes, under Restatement section 45. d. Yes, under Restatement section 87(1).

a. Yes, under Restatement section 87(2).

What is the chief advantage of a public policy approach to oppressive or unreasonably-one sided terms in standardized "contracts of adhesion" (forms that eliminate any bargaining, except perhaps for price)? a. A court can examine the relative bargaining power of the parties aside from any undue influence or overreaching. b. A court can treat the clause as void for all non-drafting parties, whether rich or poor, sophisticated or unsophisticated. c. A court can set a contract aside because of an informational imbalance that could not be cured by doctrines of misrepresentation or a duty to disclose. d. A court can set a contract aside if based on necessity not qualifying as duress.

b. A court can treat the clause as void for all non-drafting parties, whether rich or poor, sophisticated or unsophisticated.

What did I learn in Hamer v. Sidway that's most important to contracts law (and should be in my outline)? a. Consideration must have pecuniary (money) value. b. A thing can be consideration regardless of value if the promisee traded it for the promise. c. A thing can be consideration for a promise if it is a fair trade for the promise. d. Consideration must be tangible or physical, like money or a car. Intangibles, like forbearance of a to sell books or eat Twinkies, cannot be consideration.

b. A thing can be consideration regardless of value if the promisee traded it for the promise.

When is an offeree's starting to perform the offeree's promise in a proposed offer, such as beginning work or shipping goods, a reasonable way to accept an offer for a bilateral? a. Never. Acceptance of an offer requiring a promise of the offeree requires an act of commununication with the offeror. b. If an offer is reasonably interpreted to invite such a means of acceptance. c. Always, unless the offer states that such a means of acceptance is inproper. d. If the offeree believes in good faith that time is of the essence.

b. If an offer is reasonably interpreted to invite such a means of acceptance.

What is an important difference between a bilateral contract and a unilateral contract? a. In a bilateral contract, both parties provide consideration. In a unilateral contract, only one party provides consideration. b. In a bilateral contract, both parties are potentially liable for breaching a promise. In a unilateral contract, only one party is potentially liable. c. A bilateral contract requires an offer and acceptance. A unilateral contract requires only an offer. d. All of the above.

b. In a bilateral contract, both parties are potentially liable for breaching a promise. In a unilateral contract, only one party is potentially liable.

Seller and Buyer contracted for Seller to deliver a quantity of Blue Mountain coffee beans on September 1. Seller delivered less valuable Grey Mountain coffee beans instead. Which of the following best states the formula for Buyer's expectation interest? a. Market value of Blue Mountain coffee beans on Sept. I, minus the unpaid contract price, plus other loss. b. Market value of Blue Mountain beans minus market value of Grey Mountain beans on Sept. I, plus other loss. c. Losses suffered by Buyer because of its reliance on Seller's promise. d. Money paid by Buyer to Seller because of Seller's promise. 4

b. Market value of Blue Mountain beans minus market value of Grey Mountain beans on Sept. I, plus other loss.

In March, Farmer promised to deliver its entire June harvest of corn to Buyer in exchange for Buyer's promise to pay a set per bushel price on delivery in June. The contract price was roughly the market price in March. By June, market prices rose 50%. Farmer repudiated the contract. If Buyer sues, what is its lost benefit of the bargain? a. Unpaid contract price minus market value of corn in June. b. Market value of corn in June, minus unpaid contract price. c. Market value on day of trial two years later, minus unpaid contract price. d. Market value on day the parties made the contract, minus unpaid contract price.

b. Market value of corn in June, minus unpaid contract price. Buyer suing for seller's promise to deliver something: market price on date of delivery or date of breach MINUS unpaid contract price.

Buyer sent Seller an order: "urgent, for prompt shipment, ' 1,000 widgets at your listed price of $20,000." Seller quickly replied, "We'll see what we can do. If we deliver 1,000 by Friday, will you pay our higher price of $22,000?" Buyer replied "yes." Seller's delivery was a few widgets short, only 950. Did Seller breach a contract? a. No, delivery of less than the quantity ordered is not a breach. b. No, only Buyer made a promise, not Seller, but Buyer is excused from its promise to pay $22,000. c. Yes, Seller promised to deliver 1,000 widgets, and breached by delivering fewer than 1,000. d. Yes, but only if Seller intended to deliver fewer than 1,000.

b. No, only Buyer made a promise, not Seller, but Buyer is excused from its promise to pay $22,000.

Bank sued Harry Hilton for breaching a promise to guarantee Hilton Corp.'s repayment of a loan. Harry pleaded "Statute of Frauds" as a defense. However, the court found Harry's promise was not subject to the Statute because the promise would have advanced his own commercial purpose. At trial, is Harry entitled to prove he didn't make the promise? a. No, the Court's rejection of the Statute of Frauds defense means Hany really did make the alleged promise. b. Yes. The court's denial of a SOF defense paves the way for trial on the Issue: "was there an oral contract?"

b. Yes. The court's denial of a SOF defense paves the way for trial on the Issue: "was there an oral contract?" If statute of frauds doesn't apply, that doesn't mean the promise was definitely made. We have an issue of fact.

When Owner's prize-winning yorkie-doodle was pregnant, she promised to deliver 'the puppy the parties to this contract select" in return for Buyer's promise to pay $20,000. When Owner's dog delivered six puppies, she presented one to Buyer. "No," Buyer said, that's not the one I want. I want the one over there," pointing to Owner's favorite puppy. Owner refused to deliver that puppy, and Buyer sued. These facts are an example of... a. an ambiguous essential term. b. indefiniteness: a pure agreement to agree. c. an agreement with an expectation of subsequent formalization. d. an agreement to negotiate and agree within fixed parameters.

b. indefiniteness: a pure agreement to agree.

What is a "rolling contract?" Best answer. a. A contract that rolls to the next renewal term without express assent to renewal, subject to express cancellation. b. A contract that can be transferred or rolled from one promisee to another. c. A contract in which the drafter postpones presentation of details until after initial exchange of a thing for money, subject to the buyer's right to cancel. d. A contract that's rock' in. 2

c. A contract in which the drafter postpones presentation of details until after initial exchange of a thing for money, subject to the buyer's right to cancel.

In March, Farmer promised to deliver its entire June harvest of corn to Buyer in exchange for Buyer's promise to pay a set per bushel price on delivery in June. The contract price was roughly the market price in March. Drought caused the market price to rise 50 percent by June. Farmer's crop was unaffected by the drought. Who had the "benefit of the bargain?" a. Both parties. Each got something it needed. b. Neither party. The contract price was the market price at the time of the contract. c. Buyer. d. Farmer

c. Buyer.

In October, Employer announced to employees including Worker that the year had been a great success, and it would pay each employee an end-of-year bonus of 5 percent of regular annual income. In November, Employer discovered its finances had been falsified by Embezzler, who had absconded with millions in Employer's funds. Employer cancelled all bonuses. Worker sued for breach of contract. What IS Employer's best defense? a. The contract, if any, is no longer fair to Employer. b. Employee did not pay or spend money in reliance on the promise. c. Employer's promise was a gift, not in exchange for consideration. d. Employee gave nothing "pecuniary" to Employer.

c. Employer's promise was a gift, not in exchange for consideration.

Seller emailed Buyer "Offer attached." The attachment listed all terms essential for a contract to sell Greenacre. Buyer replied, "Accepted!" Seller then emailed, "No, I was just sending you an offer Owner made to me, wondering if you had an opinion." Seller rejected Buyer's demand to deliver Greenacre. Buyer sued. How should a judge instruct the jury? a. If you find Seller did not intend to offer, your verdict must be for Seller. b. If you find Buyer believed Seller made an offer, your verdict must be for Buyer. c. If you find Buyer could reasonably interpret Seller's email to be an offer, your verdict must be for Buyer. d. This case is dismissed and you are dismissed from jury duty because Seller did not own Greenacre and could not sell it to Buyer.

c. If you find Buyer could reasonably interpret Seller's email to be an offer, your verdict must be for Buyer.

Renter signed a lease with Landlord for a marijuana cafe in New Stonia, where the use and sale of marijuana is decriminalized under state law. When Renter fell behind in its rent and eventually vacated the premises, but Landlord sued for $20,000 in past due rent. Renter pleaded "illegality:" the contract violated federal law. What is Landlord's best argument for overcoming this defense? a. State law preempts federal criminal law. b. Federal criminal law does not apply to the state law of contracts. c. Landlord is not in pari delitco with Rocky. d. Landlord could sue for restitution (benefit delivered because of a void contract).

c. Landlord is not in pari delitco with Rocky. OR d. Landlord could sue for restitution (benefit delivered because of a void contract).

Defamatory statements in a judicial filing are absolutely privileged (subject to possible judicial sanctions). Ex-Employer presented Ex-Employee with a draft of a complaint falsely alleging theft and other misconduct by Ex-Employee. Ex-Employer said, "If you sign a promise not to compete, we promise not to file this complaint." Ex-Employee panicked. She feared the effect of the complaint on her career. She signed the promise not to compete. Later, she regained courage. She wants to know: Is she bound by her promise not to compete? Traditional rules. a.Yes, she received consideration: Ex-Employer promised not to sue. b.Yes, if she signed a written contract, consideration does not matter. c.No, Ex-Employer's promise not to sue was worthless, if it's allegations were unreasonable and in bad faith. d.No, Ex-Employer used duress to obtain Ex-Employee's promise.

c. No, Ex-Employer's promise not to sue was worthless, if it's allegations were unreasonable and in bad faith.

Guggenheim promised Casso, "If you promise to finish and deliver this painting to me, I promise to pay $5,000, provided I am satisfied with the finished painting. Casso finished but refused to deliver the painting. Guggenheim sued. Casso's defense was that he received no consideration for his promise to deliver painting to Guggenheim. Is this defense valid? a. Yes, if Guggenheim's promise was to pay only if he was satisfied, his promise was illusory and no consideration for Casso's promise. b. Yes, if Guggenheim has not paid yet, Casso has received no consideration. c. No, Guggenheim nude a real promise. He must use good faith in deciding whether he is satisfied. d. No, even an illusory promise is worth at least a peppercorn.

c. No, Guggenheim nude a real promise. He must use good faith in deciding whether he is satisfied.

Buyer (TIErchant) sent an "order" with its terms for a quantity of goods based on a price Seller (merchant) listed on its website. Seller replied with a "confirmation" with additional terms and a statement that 'this form will become a contract only when Buyer signs and returns it to Seller." Buyer immediately "canceled" its order. Did Buyer breach a contract? a. Yes, Seller's confirmation was an acceptance forming a contract based on the terms of Buyer's order (which might include terms on the website at the time of the order). b. Yes, Seller's confirmation was an acceptance forming a contract based on the terms of Seller's confirmation. c. No, Seller did not accept. Seller rejected the order-offer. d. No, because Buyer successfully revoked its acceptance.

c. No, Seller did not accept. Seller rejected the order-offer.

Buyer: "I offer $100,000 for your property known as Geenacre [with complete description], to close no later than November 30 at my lawyer's office at 100 Main Street. Seller: "I accept your offer. However, we will have to close at my lawyer's office, at 151 Main Street." Are the parties bound by a contract? a. Yes, the parties' choice of words clearly and objectively manifested intent to be bound. b. Yes, the parties manifested assent to be bound by the essential terms. c. No, the parties did not manifest assent to all the same terms. d. No, but the parties will be bound when they meet at one office or the other to exchange deed for money. 2

c. No, the parties did not manifest assent to all the same terms.

Homey said to House: "1 won't put up a political yard sign if you don't put up a sign, but this is not a legally binding agreement." House replied, I agree." One day later, Homey put up a sign, "Senator Snort is a Pig!" House sued. Should the court enforce Homey's promise not to put up a sign? a. Yes. House's promise was consideration for Homey's promise. b. Yes, provided House can prove he relied on Homey's promise by not putting a "Vote Snort" sign up in time for the election. c. No, the parties' objective manifestations show they intended not to be legally bound. d. No, House's promise cannot be consideration because it is intangible and has no value.

c. No, the parties' objective manifestations show they intended not to be legally bound.

Uncle promised Nephew, "I hear you were accepted to law school. When I sell my Aspen property I'll give you $100,000." After hearing this promise, Nephew used the last ofhis savings for a down payment on a $90,000 sports car. Then the property market crashed. Uncle's Aspen property fell in value by 50%. Uncle told Nephew he could no longer afford the promised S If Nephew sues, will he prevail against Uncle under any theory we have discussed? a. Yes, for breach of a contract based on an exchange of getting into law school in return for a promise of money. b. Yes, as an implicit bargain: $100,000 if Nephew does go to school. c. No. Nephew's best claim is promissory estoppel, but his reliance (buying a sports car) was neither foreseeable nor reasonable. d. Yes, based on promissory estoppel because Uncle's promise caused Nephew to buy a Tesla. 2

c. No. Nephew's best claim is promissory estoppel, but his reliance (buying a sports car) was neither foreseeable nor reasonable.

The main (or leading) purpose rule is an exception to the requirement that your promise to guarantee another person's debt to a creditor must be written and signed to be enforceable. Who of these is most likely to be subject to the exception so that a creditor can enforce an oral promise? a. Aunt, who promised to pay Creditor ifNiece fails to pay a debt. b. Pal, who promised to pay Creditor if Friend fails to pay a debt. c. Owner, who promised to pay Creditor if Owner's Business fails to pay a debt. d. Donor, who promised to pay Creditor if Charity if fails to pay a debt.

c. Owner, who promised to pay Creditor if Owner's Business fails to pay a debt.

After receiving Buyer's phone order-offer for $100,000 in gadgets, Seller prepared its standard form "confirming we have accepted your order," but with fine print the parties had not discussed over the phone. Seller signed its form and sent it to Buyer. Buyer received but did not respond to the form. Two weeks later, Buyer called to cancel the order. Buyer has not signed any document in the transaction. Which is true? a. There is no contract because Seller's form was not a valid acceptance because it added new terms. b. There was a contract, but Buyer has a Statute of Frauds defense because Buyer did not sign any document in the transaction. c. There was a contract and the form satisfies the Statute against Buyer, even though Buyer did not sign the form. d. There was a contract that was not subject to the Statute.

c. There was a contract and the form satisfies the Statute against Buyer, even though Buyer did not sign the form.

Store, wanting to bolster sagging sales, asked Clerk (recently immigrated from Europe), to prepare a "Back to School" advertisement for "15% off all inventory, while supplies last!" Clerk hand-wrote "15%" in the continental manner. Store's graphic arts agent posted the ad showing "75%" in the Anglo-American manner. Shoppers flooded the store the next day to buy at 75% off. Store refused to honor this discount. Several buyers joined in a class action. What is likely to be the issue? a. Did Store objectively intend to offer all inventory at 75% off? b. Did Store subjectively intend to offer all inventory at 75% off? c. Was Store's mistake in its offer reasonably obvious to offeree-buyers, or were resulting contracts with customers unconscionable? d. Was Store at fault in causing its own mistake?

c. Was Store's mistake in its offer reasonably obvious to offeree-buyers, or were resulting contracts with customers unconscionable?

Seller promised to deliver all its outputs to Buyer, and Buyer promised to pay a certain price for as much as Seller produced. Is Buyer legally bound by its promise? a. No. Buyer received no consideration because Seller's promise is illusory: Seller is free to decide whether to have any outputs. b. No. A contract that lacks agreement for a specific quantity is too vague to be enforced. c. Yes, Buyer did receive consideration. Seller made a real, not illusory promise to deliver all its outputs exclusively to buyer, and to decide its outputs in good faith. d. The answer depends on whether Seller can prove it suffered a material and detrimental reliance on Buyer's promise.

c. Yes, Buyer did receive consideration. Seller made a real, not illusory promise to deliver all its outputs exclusively to buyer, and to decide its outputs in good faith.

Otto made monthly payments to Insurer in return for Insurer's promise to insure Otto's auto, subject to terms in a document Otto signed but did not read. One day Otto's auto was destroyed in an accident. Otto called Insurer to make a claim. Insurer processed the claim and said, "where would you like to pick up your rental car?" Otto replied, "I have a right to a rental car? I had no idea!" Insurer said, "In that case, you don't have the right to a rental car." Does Otto have a contract right to a rental car? a. No, Otto cannot have relied on the right to have a rental car. b. No, a contract requires express assent to each separate term. c. Yes, Insurer made that promise in the package of terms it exchanged with Otto in return for his payments. d. Yes, because Otto signed a document giving him that right.

c. Yes, Insurer made that promise in the package of terms it exchanged with Otto in return for his payments.

Store announced, "Player-autographed balls free to the first 100 Firebird fans in line to buy tickets at the gate on September 1!" Buyer was 90th in line and bought a ticket, but when the ticket-seller saw Buyer's Shark T-shirt, he said, "no autographed ball for a Sharks fan!" Can buyer enforce the promise of a player-autographed ball? a. No, Store received no consideration from Fan for its promise. Fan's payment of money was for a ticket, not a ball. b. No, Store's announcement was not a promise. Store did not say "Store will..." c. Yes, acting quickly to be among the first 100 to buy a ticket was the implied consideration for Store's promise. d. Yes, provided Fan can prove he would not have gotten in line early or bought a ticket except for Store's promise.

c. Yes, acting quickly to be among the first 100 to buy a ticket was the implied consideration for Store's promise.

Review Problem No. Two Buyer selected goods on Seller's website. On the "shopping cart" page she completed payment information and clicked "submit order." She did not notice or click on a "terms and conditions" link just above the "submit order" button. Seller "confirmed" the transaction by email. Is Buyer bound by an arbitration clause in the "terms and conditions" she failed to read? a. No, Buyer was not conscious of that clause and did not assent to it. b. No, Buyer did not click and read "terms and conditions." c. Yes, if the "terms and conditions" link was reasonably discoverable. d. Yes, a seller decides the incidental terms ofthe sale.

c. Yes, if the "terms and conditions" link was reasonably discoverable.

Seller's website states, "all orders are for prompt shipment." Buyer placed an order for 100 Dool)ads. Two days later, Buyer received Seller's shipment of 100 DoodlyDids, which are identical to DooDads but larger. Buyer rejected the DoodlyDids. If Seller fails to deliver 100 DooDads within a reasonable time, will it breach a contract? a. No, there was no contract. Shipping goods, instead of communicating, was not acceptance. b. No. Seller did not accept Buyer's order-offer because Seller's shipment did not match the order. c. Yes, unless Seller made it clear it delivered the DoodlyDids as an accommodation or counteroffer, not acceptance. d. Yes, even if Seller asserted its shipment was an accommodation.

c. Yes, unless Seller made it clear it delivered the DoodlyDids as an accommodation or counteroffer, not acceptance.

In March, Farmer promised to deliver its entire June harvest of corn to Buyer in exchange for Buyer's promise to pay a set per bushel price on delivery in June. The contract price was roughly the market price in March. A record worldwide harvest of corn that Spring caused market prices to drop 20% by June. Who had the benefit of the bargain? a. Both parties, because each got something it needed. b. Neither party, because the contract price was roughly the market price. c. Buyer. d. Farmer

d. Farmer

Buyer learned from his friend Scientist that a disease might devastate this year's coffee bean crop. Few people knew of that danger at that time. Buyer quickly made a contract to buy future quantities of coffee beans from Seller, whose farm was in a relatively safe zone. When delivery was due, the market value of beans was up 400 % because of the devastating disease. If Seller refuses to deliver and Buyer sues, is a court likely to grant Seller's request for rescission? a. Yes, Seller made a unilateral mistake. b. Yes, Buyer violated a duty to disclose material, latent facts. c. Yes, Buyer bargained in bad faith. d. No.

d. No You don't have to share everything if it's a discoverable fact.

Seller's Offer to Buyer stated, return for $1.00 1 have received from you, I promise not to revoke this Offer until Friday at 5 pm." On Friday morning Buyer decided to accept, but a storm knocked out power and local cell phone service. Buyer wrote a letter, accept," raced to the post Office, and placed the letter in a mailbox at 4 pm. Seller received that letter three days later. Is there a contract? a. Yes, Buyer's acceptance happened when she dispatched the letter, still within the deadline. b. Yes, Buyer's acceptance happened when she decided to accept, still within the deadline. c. NO, sending a letter by U.S. mail is not a reasonable method to accept. d. No, Buyer's acceptance could not be effective until Seller's receipt, which happened after the deadline passed.

d. No, Buyer's acceptance could not be effective until Seller's receipt, which happened after the deadline passed.

Seller emailed an offer to Buyer stating, "this offer will expire Oct. 10." Seller changed its mind and sent a revocation email to Buyer in the morning on Oct. 7. That email arrived instantly in Buyer's email system, but technical difficulties in Buyer's email service prevented Buyer from accessing email that day. Buyer texted in the afternoon on Oct. 7, "1 accept," without having seen the revocation email. Is there a contract? a. Yes, Buyer accepted before the offer expired, and Seller's earlier attempt to revoke before the deadline was ineffective. b. Yes, Buyer accepted before she was able to access the revocation. c. No, Seller effectively revoked the offer when it dispatched the email revocation, which was before Buyer texted "1 accept." d. No, Seller effectively revoked the offer when the revocation email arrived in Buyer's mailbox, before Buyer texted "1 accept."

d. No, Seller effectively revoked the offer when the revocation email arrived in Buyer's mailbox, before Buyer texted "1 accept."

U.C.C. article two applies to what transactions? a. All transactions between parties in the U.S. b. All transactions between U.S. merchants. c. Transactions in which at least one party is a U.S. merchant. d. Sales of goods within the U.S.

d. Sales of goods within the U.S.

Buyer filled out a form to purchase goods at Seller.com and pressed the "order" button. Seller's website said: 'Orders are final when approved by Seller and will be shipped within 24 hours Of our approval. You may check the status Of your order at any time by returning to this site and clicking 'check my order. Buyer clicked "submit order" and went out for lunch. In the meantime, Seller marked Buyer's order "approved" in a database accessible to Writer if Writer clicked "check my order." Which is true? a. There is a contract. Buyer accepted Seller's Offer by submitting her order. b. There will be a contract when Buyer returns to the website and clicks "check my order" to see that the order is approved. c. There will be a contract when Seller delivers the goods to Buyer. d. There is a contract. Seller accepted Buyer's Offer when it approved her order on its website.

d. There is a contract. Seller accepted Buyer's Offer when it approved her order on its website.

Buyer and Seller net in a café and discussed a sale of goods. Buyer presented an oral offer to Seller. The next day Seller sent an "acknowledgement of order" form including the terriB of Buyer's offer (price and quantity) plus the "other terms" of Seller's standardized form, including choice of law, choice of forum, etc., and finally setting an expected delivery date. Is there a contract? a. No because Seller's acknowledgement adds terms and is not a mirror image of the Buyer's offer. b. No because Seller's acknowledgement is not an expression of acceptance. c. No because Seller's additional terms are rmterial. d. Yes.

d. Yes

Buyer and Seller met in a café and discussed a sale of goods. "Ihey shook hands on an oral contract that included the essential terms and not much more. The next day Seller and Buyer sent each other their own "confirnutions." Each confirmation had additional incidental favoring its drafter. Is there a contract? a. No, there is no meeting of the minds. b. No, the subsequent issuance of different confirmations by each party constituted a mutual recission of the oral contract. c. Yes, and the contract will be based on the last confirmation received. d. Yes, and the contract will be based on the oral agreement. The additional terms in each confirmation are just proposals.

d. Yes, and the contract will be based on the oral agreement. The additional terms in each confirmation are just proposals.

Employer prepared an offer to Applicant for a written, one-year term contract, 'to be accepted by signing below." Applicant read the offer, but before she finished reading and signing she was interrupted by Assistant, who invited her to tour the facility. Neither Employer nor Applicant remembered that Applicant needed to sign the offer, but a clerk took the "contract" to human resources to be filed. Applicant began to work for Employer. Six months later Employer laid off Applicant for lack of work. Did Employer breach a contract? a. No, Applicant could not accept because she did read the whole offer. b. No, Applicant did not accept because she did not sign the offer. c. Yes, Applicant relied on Employer's written offer. d. Yes, the parties manifested mutual assent to the contract by performing and accepting performance.

d. Yes, the parties manifested mutual assent to the contract by performing and accepting performance.