002: Chapter 10
What does consideration in a contract involve?
A promise that must be bargained for.
A phoned B and offered to sell him "my farm in New Hampshire for $100,000." B says, "I accept." A actually owns two farms in New Hampshire. He was referring to his 5-acre farm, whereas B was referring to his 10-acre farm. With regard to the agreement,
A valid contract has not been formed.
Delaney's Department Store had been trying for three years to collect $100 owed it by a customer. Finally the customer said, "Look, I'm broke. I can give you $50 right now and I'll wash the windows on the front of your store if you'll forget about the rest of it." Delaney's accountant, thinking that they would never see any money at all if they didn't accept this offer agreed to it. What is this an example of?
An accord and satisfaction
What is a transfer of rights is called?
Assignment
Wichelhaus (Buyer) purchased a shipment of Surat cotton from Raffles (Seller) "to arrive on Peerless from Bombay." Wichelhaus expected the goods to be shipped on the ship Peerless sailing from Bombay in October. Raffles expected to ship the goods on a different ship Peerless, which sailed from Bombay in December. When the cotton arrived two months later than expected, the buyer refused to take delivery. This situation illustrates which defense to the enforcement of a contract?
Bilateral or mutual mistake
What is the term used when one party in a contract dies before the contract is completed?
Discharge
Where can the modern contract action be traced to?
English Common law
A voidable contract is the same as a void contract.
False
Agreements made in consideration of marriage need not be in writing.
False
An injured party who has established a breach of contract is only entitled to turn to a court for equitable relief such as specific equitable, rescission, restitution, and injunctions.
False
In most situations, remaining silent or inaction by the person receiving an offer constitutes acceptance.
False
In practice, the distinction between primary and secondary liability of a promisor is clear.
False
The Uniform Commercial Code covers both personal and intellectual property.
False
The Uniform Commercial Code covers only commercial paper and bank collection processes.
False
Ruby sells her car to Bob. She fails to tell him that the car has been previously wrecked, even though he had asked if it had ever been involved in a collision. If Bob later learns that the car was almost totaled six months prior to the sale and wants to rescind the contract, what would be his best defense to the enforceability of the contract?
Fraud
What was the first state to adopt the Uniform Commercial Code?
Pennsylvania
A, who is selling her house, was told when she bought the house that it was fully insulated when built. She tells B this, and B decides to buy the house. If B finds out that the house is not insulated and that, as a result, his heating bills will be much higher than expected, what will B's proper remedy be?
Rescission
What is agreement to accept something different from what was due under an original contract called?
Satisfaction
Cunningham contracted with the Cougars to play professional basketball. The Cougars at the time were owned by the Southern Sports Corporation. Which of the following statements is true?
The Cougars could assign their right to have Cunningham play to its successor corporation, the SlamDunk Corporation, and delegate their duty to pay him as well.
An uncle, in writing, promised his nephew $5,000 if his nephew would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until the age of twenty-one, all of which was otherwise legal for the nephew to do at the time. The nephew performed as requested. Which of the following statements is true?
There is a valid contract and the nephew is entitled to the $5,000.
Marie was a famous model. Tempo Magazine mailed her an offer to do a five-page photo layout for a new line of swimsuits for $35,000. Marie received the offer January 2. On January 3, Marie mailed Tempo the following note: "I accept. But must have twelve pages devoted to me, and accordingly, $50,000." Tempo received this note on January 5. On January 6, Marie called them and told them she would do the modeling under the original terms. What is the status of the agreement on January 6?
There is no contract. The offer terminated when Marie made her counteroffer.
A contract may be unenforceable if a party wanting to enforce the contract waits beyond the time period prescribed by law to bring a court action.
True
A valid contract is both binding and enforceable.
True
A void contract is totally lacking in effect.
True
At common law, an acceptance must be a mirror image of the offer.
True
Common law remedies for breach of contract include awards for compensatory, nominal, or liquidated damages.
True
Consideration usually consists of an act or a promise to perform an act.
True
Contract law rapidly developed as courts responded to parties' expectation that promises would be enforced.
True
Statutes prohibit contractual restrictions on most assignments of rights.
True
The Uniform Commercial Code provides special rules for breaches of contract involving sale of goods.
True
The common law writ of assumpsit was the predecessor of the modern action.
True
Under the Uniform Commercial Code, a court can order specific performance in a breach of contract suit over rare artwork.
True
Under the leading object rule, courts look both to the promise itself and to the individual for whose benefit the promise was made.
True
Jesse writes to Nadine, "I'll pay you $50 if you clean my house by Saturday." On Friday, Nadine cleaned Jesse's house as requested. What kind of contract has been formed?
Unilateral
Jill says to Ben, "I offer to sell you my DVD player for $90." Ben replies, "If you do not hear otherwise from me by Thursday, I have accepted your offer." Jill agrees and does not hear from Ben by Thursday. Does a contract exist between Jill and Ben?
Yes, because the parties agreed that silence would constitute an acceptance.
