CONTRACTS

A young woman incurred credit card and medical debts that were overwhelming. She filed bankruptcy and discharged the debts. After receiving her final discharge, she contacted her dentist who had been listed in the bankruptcy for a debt of $10,000. That debt was now discharged and not owed. She said to the dentist, "I know I owe you $10,000 and I'm going to pay it off in the future. Can the dentist successfully sue the young woman for the $10,000 after she fails to perform on her new promise? A. Yes, because a promise to pay a debt discharged in bankruptcy reaffirms the prior enforceable contract. B. Yes, because a promise to pay based on a prior debt that is now a moral obligation is always treated as new consideration sufficient to form a binding and enforceable contract. C. No, because moral obligation in itself never rises to the level of establishing new consideration to form an enforceable contract. D. No, because there can never be a new contract based on a prior obligation that is no longer owed under the law.

A. A promise is said to be given for past consideration when the promisor's motivation for making the promise is a past benefit he received that now gives rise to a subsisting moral, but not legal, obligation to make compensation. The general rule is that a promise to pay a debt that is based on moral obligation is unenforceable. PROMISSORY RESTITUTION. However, there are exceptions and one of those is where a debtor reaffirms a promise to pay on a debt previously discharged in bankruptcy. That is generally treated as an enforceable promise based on promissory restitution.

Battle of the forms- Between merchants additional or different terms become a part of the contract unless a. offer expressly limits acceptance to offer terms b. the additional terms materially alter offer c. the offeror objects to the different or additional terms. d. all of the above

D!!! They automatically become part of the contract UNLESS A, B, or C. (so all of the above) Remember, materially alter means it results in surprise or hardship if incorporated without express awareness by other party.

What is the exception to apply restitution EVEN WHEN the recipient did not want the services?

A person who has supplied things to another, although acting without the other's knowledge or consent, is entitled to restitution thereof from the other if he acted unofficiously and with intent to charge thereof, and a. the things or services were necessary to prevent the other from suffering serious bodily harm or pain, and b. the person supplying them had no reason to know that the other would not consent to receiving them, if mentally competent; and c. it was impossible for the other to give consent or, because of extreme youth or mental impairment, the other's consent would have been immaterial.

What is required of an Option Contract

1. Must both have mutual assent & consideration/ must be in writing/ OR Statute 2. Makes it binding on the offeror but optional for the offeree 3. Option contract is an exception to the mailbox rule - acceptance is valid when it is received 4. A small amount of money or false consideration will work in these mini contracts

What is the difference between a firm offer and an option K?

A option K requires consideration and a firm offer does not. A firm offer is always by a merchant. Both need to be signed and written

What is a merchant?

A person who deals sin goods of the kind or holds themselves out as having knowledge about those goods.

By signed writing, Party G makes this offer: "My 300-acre farm is for sale immediately. The land is described at volume 2084, page 782 of the Harrison County Land Records. Price: $10 million, all cash, payable immediately." Party H reads the offer and responds, whereupon G and H exchange writings. Among the exchanges shown below, which creates an option contract? a. 1. Party H: I'll pay you $1 million one month from today if you give me five years to decide that I do or do not wish to buy the farm for an additional $9 million. 2. Party G: Agreed. b. 1. Party H: I'm interested. I'll pay you $1 million one month from today. In five years, I'll pay you the remaining $9 million and at that time you'll transfer the farm to me. Agreed? 2. Party G: Agreed. c. 1. Party H: I'm interested, but I'd like to buy an option to purchase the farm. Agreed? 2. Party G: Agreed. The option period will be five years, the option price $1 million, and the strike price $9 million. d. 1. Party H: I'm interested, but I need five years to make a decision. Agreed? 2. Party G: Agreed.

An option contract is, first, a contract. If an interaction fails to form a contract, it cannot form an option contract. Consider D. At statement 1, in response to G's initial offer to sell the farm, H asks for five years in which to make a decision. With statement 2, in exchange for nothing, G agrees, meaning she purports to make her offer irrevocable for five years. Legally, we know, she can't do that; notwithstanding her promise, she retains the right to revoke. G has made, still, only her initial offer to sell the farm, and H has not accepted it. The parties have no contract, meaning they have no option contract. D is wrong. Now for C. With statement 1, H expresses interest in forming an "option contract" but makes no offer to do so. He provides no terms — no option price, no option period, no strike price. Hence, in responding to G's offer, H makes a mere invitation to deal. With statement 2, Party G truly offers H an option to buy the farm. She identifies the option period (five years), the option price ($1 million), and the strike price ($9 million). Party H does not respond, and so we're left with G's unaccepted offer to sell H an option on the farm. The parties form no contract, so C is wrong. In B, the parties do form a contract. Party H responds to Party G's initial offer not with an acceptance but with a counteroffer, which means an offer in response to an offer. (See Chapter 7, section A.) He proposes definitely to purchase the farm not immediately and not for "all cash, payable immediately." Rather, he offers to pay $1 million in one month and $9 million five years later, at which time Party G is to convey title to the farm. That's an offer, and with statement 2 Party H accepts it. The parties form a contract that leaves neither one with any options at all. These parties must buy and sell. Hence, they form a contract, but not an option contract. B is wrong. We're left with A. Again Party H receives G's offer and responds with an offer of his own. He proposes to pay $1 million in exchange for the right to buy the farm at any time within the next five years, by paying — if he chooses to buy — another $9 million. Hence H offers to buy, for $1 million, G's five-year irrevocable offer to sell the farm for (an additional) $9 million. Party G accepts the offer, and the parties thus form a contract — and, more specifically, an option contract. Some would say, "G sold H an option on her farm," or "H bought an option on G's farm." Whatever they say, A is right.

An acceptance under restatements must always: a. be in writing b. mirror the offer c. be within a 3 months

B

An offeror offers to sell a parcel of land to an offeree for $10,000, stating that the offer shall remain open for 30 days. The offeree replies, "We can wrap this up immediately if you'll take $9,000." The offeror replies 10 days later and says they sold it to another buyer. Can the offeree sue to hold open the 30 day time period? A. No, because once the offeree made a counter-offer she could not go back and later accept the original offer. B. No, because the 30 day time period was not an option K because it lacked consideration. C. Yes, because the original offer must always legally remain in effect for the remainder of the specified 30 days, even after a counter-offer has been communicated. D. Yes, because the offeree was able to keep the original offer with the 30-day window.

B- time period is not enforceable- the offeree does not have the exclusive right to acceptance unless there is an option K and there is not one here because no consideration. A is true but it isn't the question. B better goes to the enforceability of the 30 day time period.

With a contract with several forms that has already been executed, NOT between two merchants, the knockout rule would have the court A. Knockout the offeree's terms B. Dismiss the entire contract C. Knockout conflicting terms D. Knockout the damages

C! Knockout conflicting terms in executed contract.

If there is a contract that is mixed between goods and services: a. the UCC wins b. the Restatements wins c. Which ever is more predominate wins d. Which ever is worth more money wins

C: this is the predominate thrust test.

While waiting in line to open an account with a bank, a customer read a poster on the bank's wall that said, "New Customers! $25 for 5 minutes. If you stand in line for more than 5 minutes, we will pay you $25! This offer may be withdrawn at any time" The customer started timing his wait and just as five minutes was about to pass, the bank manager tore the poster down and announced, "The $25 stand in line promotion is over." The customer waited in line for 10 minutes before being served. What is the consideration?

Consideration is standing in line for 5 minutes for $25. Unilateral K. Standing in line was the partial performance.

A unilateral K a. can be revoked prior to full performance b. can be revoked prior to half performance c. cannot be revoked if in writing d. cannot be revoked after partial performance

D!

Sally manufactures valves. Betty manufactures tires. On June 1, Sally sends Betty this signed writing: "I am prepared to sell you our standard tire valve #19 at 40 cents per unit, quantity 100 units delivered to your facility. You have six weeks to consider this offer; during that period we will not withdraw it." When Sally hears nothing from Betty, she writes again on June 14: "I now withdraw our offer of June 1." On June 19, Betty writes back: "I accept your offer of June 1." As of June 20, Betty and Sally a. are parties to a contract because Sally made an offer and Betty accepted it. b. are parties to a contract because the common law provides that Sally, as merchant, is bound by her promise to hold her offer open. c. are parties to a contract because Betty is a merchant. d. are parties to a contract because Betty responded to Sally on June 19 by signed writing. e. are not parties to a contract because Sally revoked her offer before Betty attempted to accept it.

Dont have answer... I think its B? EEK

Under statute of frauds what do you need to know? a. The test: (1) is it applicable? (2) the statute of frauds met? (3) if no to #2 are there exceptions? b. Under the RSMT it applies to contracts not to be performed within a year c. Under UCC it applies to contracts $500 or more (not including shipping or tax) d. It is an affirmative defense e. All of the above

E!

Party A contracts for the sale of goods from party B for a price of $490 + $39 in tax and $22 of shipping. True or false: This contract MUST be in writing.

False: for the Statute of frauds to apply, a K for goods must be $500. The GOODS must equal at least $500, NOT including tax, shipping, etc.

Which of the following contracts, if breached by A, is enforceable by B? I. An oral contract, where under A agrees to sell land to B II. A written contract, signed only by B, whereunder A agrees to employ B for a period of two years III. A written contract, signed only by A, whereunder B agrees to employ A for two years IV. A written contract, signed by both parties, whereunder A guarantees payment of her son's debt to V:A written contract, signed only by A, where under B agrees to marry A's daughter and A agrees to pay B $500,000 a. I and II b. III, IV, and V c. I, II, III, and IV d. I, II, III, IV, and V

I. must be in writing NOT ENFORCEABLE II. B cant enforce because they party being charged did not sign. NOT ENFORCEABLE III. Must be in writing by party to be charged, which would be IV. Suretyship V. Marriage Correct answer is B

If a firm offer has no time limit...

It is 3 month OR a reasonable time (like depending on industry standards).

Firm offers require (3 things)

Made by merchant, signed by merchant, give assurance not revokable.

Exceptions for restatements statute of frauds are

Part performance but ONLY if requesting specific performance (think Celine Dion) Promissory Estoppel

True or false: postponed bargaining- the UCC will allow gap fillers

TRUE- such as UCC 2-305 provides for a "reasonable price" when something as essential as price has been omitted.

True or false: Postponed bargaining- under restatements, all essential terms must be specified

TRUE. agreement is incomplete. However, RSTMT 2nd §33 allows the contract to be formed if the terms can be ascertained with reasonable certainty

A conditional gift is not consideration because a. the condition is no benefit to the promissor b. a gift is never consideration c. There is no acceptance d. it would be past consideration

The reason a CONDITIONAL GIFT is not a K is A., there is no benefit to the promissor. Think of Foster's example of buying a new suit as a gift and having to walk to the store

The mailbox rule says acceptance is effective upon a. receipt of mail b. received by offeror c. dispatched d. opening by offeror

c. It is effective when dispatched into the mail

Exceptions to revokable offers a. promissory estoppel b. firm offers c. statute prohibiting revocation d. option contracts e. all of the above

e. all of the above! Promissory estoppel isnt necessarily a exception to a revokable offer but if you do revoke, the person may have a defense with promissory estoppel if all elements are met.

4 elements of restitution are:

1. A benefit conferred on defendant unofficiously; and 2. Defendant has knowledge of benefit 3. Defendant retains benefit; and 4. unjust enrichment.

What are the 4 elements of promissory estopple

1. A promise: less than the clear and definite promise requirement of minority jurisdictions but more than merely expression of intention coupled with prediction. Additionally, conditional promises probably not enough. 2. Promisor should reasonably expect promise to induce action or forbearance. 3. Promisee or third party does act or forbear. 4. Injustice can be avoided only by enforcement of promise.

WaxCo is in the buisness of selling wax to candle manufacturers. CandleCo manufactures the candles. On Aug. 10, with a signed preprinted "Available for purchase" form, completing various of its blank spaces in handwriting, WaxCo made CandleCo this offer: "Will ship to you at $200 per ton, 15 tons of WaxCo Z-25 candles, wax color: white, total price $3,000. Delivery within 10 days of your acceptance. Will unload and stack boxes on your receiving platform." On Aug. 11, by signing, preprinted "Purchase Order" form, completing various of its blanks in handwriting, CandleCo responds by signed writing. For this Q, assume that on Aug. 11, CandleCo responds thus: "As per your offer on August 10, please ship. Additional comments: you will stack boxes in piles of 3." Making no response to CandleCo, WaxCo delivers the wax and stacks the boxes in piles of 4 (not 3). CandleCo sues WaxCo alleging that WaxCo was contactually obliged to stack the boxes in piles of 3. WaxCo maintains the parties contract included no such requirements. Which of the following facts, if proven, best supports waxco? -a. in the wax industry, sellers ordinarily deliver boxes and stack them in piles of 4. -b. many times in the past, waxco has delivered wax to candleco, stacking them in piled of 4. -c. the different between piles of 3 and 4 materially alters waxcos obligation -d. waxco and candleco have never before done business with each other

1. C Rationale for Correct Answer Under UCC §2-207(1) and (2), CandleCo's expression of acceptance produces, simultaneously, these two legal consequences: (1) the parties form a contract on WaxCo's terms, and (2) CandleCo proposes to modify the contract so that WaxCo will stack the boxes in piles of three. WaxCo's silence accepts CandleCo's proposal if (and only if) to the three questions earlier described the answers are, respectively, (1) "yes," (2) "no," and (3) "no." A given fact will support WaxCo if, for any of the three questions, it fails to provide the answer just mentioned. Choice A fails to address any of the three questions. Whether WaxCo's silence amounts to its acceptance is unrelated to the way in which wax sellers customarily stack boxes. B and D are wrong because they, too, state irrelevancies. C is correct. If stacking piles of three would materially alter WaxCo's contractual burden, then the answer to question 3 is "yes," meaning that WaxCo's silence does not constitute its acceptance. That's why C is right.

If there is an additional clause in acceptance (like a liability clause) between merchants and you are asked DOES it get in the contract... as yourself these 3 questions. (battle of the forms, merchants)

1. Does the offer barr the additional term or clause? 2. If no, do the terms materially alter the agreement? (Is it a surprise?: for a liability clause, maybe no because it is pretty common for a certain industry. Does it induce hardship?) 3. If no, Did the other party OBJECT to additional terms or clause? If no to all 3, TERMS GET IN.

2 requirements of a charitable subscription

1. Promise made to charitable institution (courts look for donative intent evidenced by bailment; AND 2. Consideration or reliance.

Becky, age 92, has only $25,000 to her name and is fearful that she will outlive her financial resources. On August 10, 2015, she describes her concern to her wealthy great-nephew Logan. On that same day, by signed writing, Logan makes her this promise: "When you exhaust the $25,000 that you now have, I will provide you, as a gift, any amount of money you request, up to a maximum of $50,000 per year, for the remainder of your life." In September 2015, Becky's grandson Thane asks Becky for $25,000. Unable to resist, and believing that she can turn to Logan for any money she may need, Becky gives Thane the $25,000 in her bank account — all that she has in the world. Becky then contacts Logan. Revealing what she has done, she asks him for $25,000. Logan responds, "I did not make my promise to you so that you could give your money away to Thane. I'm not going to keep the promise." To what extent does the doctrine of promissory estoppel require that Logan keep his promise of August 10, 2015? a. Not at all, because Becky did not reasonably or foreseeably rely on it b. To the extent of $25,000, because that is the extent to which Becky relied on it c. To the extent of $50,000, because that is the amount he promised to pay per year d. Fully, because Becky was reasonable in believing that Logan would honor his promise

A because Logan can dishonor his promise without committing a breach of contract, since these parties formed none. His promise was nudum pactum. Under the doctrine of promissory estoppel, the promise is enforceable, but only to the extent that Becky relied on it, reasonably, and in a way that was reasonably foreseeable to Logan. Logan made his promise in response to Becky's concern for her financial future. He had no cause to imagine that Becky would rely on it so as to give all of her money to Thane. Becky's reliance was neither reasonable nor foreseeable to Logan. For that reason, Logan need not keep his promise — at all. Consequently, A is right.

A borrower owed a lender $50,000 due on March 1. on January 10, the lender telephoned the borrower and said that he would discharge the debt if the borrower would promise to pay the lender $45K by Jan 15. The borrower responded "I will attempt to get the money together." On Jan 11, the lender again telephoned the borrower and said that he had changed his mind and would expect the borrower to make full payment on March 1. On Jan 15, the borrower tendered $45K as a full payment, which the lender refused to accept. On March 1, the borrower refused the lender's demand for $50K, and the lender sued for the amount. Which of the following best statements best supports the lender's position? -A. the borrower's Jan 10 statement was not a return promise, and therefore the lender effectively revoked his offer on Jan 11. -B. The Jan 10 telephone conversation between the lender and the borrower created an executory accord and therefore did not operate as a discharge of the $50K debt. -C. The lender's offer to discharge the debt was a gift promise and therefore was not binding on the lender -D. The lender's promise to discharge the $50K debt was not enforceable bc it was not in writing.

A is the best response because the borrower's response was too equivocal to constitute an acceptance. The lender made an offer that sought acceptance in the form of the borrower's promise to make early payment, not an acceptance in the form of performance, (i.e. the actual making of the early payment). Therefore, the offer could only be accepted by a promise. B is not the correct answer because no executory accord ever came into existence. An executive accord is a type of contract (not one that Foster tests on). One party promises to render a substitute performance in lieu of the one originally promised, and the other party agrees to accept that substitute performance in discharge of the original duty. This requires the same mutual assent as a standard contract. No such mutual assent occurred here. C is not the correct answer because the lender's promise would have been supported by consideration had it been accepted. In this choice, the drafters are trying to make you think that this fact pattern involves the pre-existing duty rule: The idea is that the borrower is merely promising to pay what he already owes (indeed, less, than he owes) and under the pre-existing duty rule a promise to do what one is already obligated to do cannot be consideration for the other party's promise of a modification. D is no the correct answer because nothing required that the lender's promise be in writing. The statute of frauds is not applicable here.

A drywall subcontractor submitted an offer to a general contractor for proposed drywall work on a small office building being constructed. The bid was for $20,000 for all drywall supplies and labor. The contractor factored the experienced subcontractor's bid into its final bid and was awarded the contract. A few days later the subcontractor informed the contractor that it had worked on the figures and realized that it underestimated the cost of the project. The subcontractor refused to do the job for less than $35,000. The contractor hired another subcontractor to do the work for $30,000 and sued the first subcontractor for the $10,000 difference over the original bid of $20,000. Will the court likely award the $10,000 to the contractor and against the first subcontractor? A. Yes, because the contractor had reasonably relied on the subcontractor's offer when making its bid, and it suffered a detriment that can only be avoided by enforcement of that offer. B. No, because the contractor had no right to rely on an initial bid of a subcontractor in computing general contractor bid because it knew that such bids would be subject to change with time. C. No, because in the law of contracts an offer can be revoked or modified at any time that substantial changes are required by circumstances and prior to the acceptance of the offer. D. Yes, because the contractor accepted the offer of $20,000 before it was revoked, making the subcontractor legally bound to his offer.

A. An offer that the promisor should reasonably expect to induce action or forbearance by the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcing the promise. See Restatement (2d) of Contracts 90. In order for promissory estoppel to apply there must be: 1) a clear and definite offer; 2) a reasonable expectation that the offer will induce reliance in the other party; 3) actual and reasonable reliance by the offeree; and 4) a detriment which only can be avoided by enforcement of the offer.

Which of the following us usually an offer: A. Bids B. Advertisements C. Negotiations D. Price quotes

A. Bids are usually offers. B-D are not usually offers but CAN be if they are sufficiently detailed.

In electronic contracts A. The seller makes the offer and the buyer accepts OR B. The buyer makes the offer and the seller accepts

A. In electronic contracts, it is opposite from traditional contracts. Whenever you purchase something online, the SELLER actually makes the offer (through browse wrap, click wrap or shrink wrap agreements) and the BUYER accepts buy clicking "I accept" (clickwrap), purchasing the item with the terms and conditions somewhere present (browsewrap) or by keeping the item (shrinkwrap).

Generally speaking, if an exception applies to the statue of frauds, is the contract enforceable? a. Yes b. No c. Maybe So d. I don't know, I need more facts Ms. Christy!

A. Yes.

Which of the following is not an equitable claim: A. Statute of Frauds B. Charitable Subscriptions C. Promissory Estoppel D. Restitution E. Promissory Restitution

A. Statute of frauds is NOT an equitable claim

A retail store runs an advertisement in the local newspaper stating: "Only 3 cashmere sweaters remaining; highest quality; real Polo; one grey, one maroon and one beige; on closeout, starting 9 a.m. Saturday, $5.00 each, first-come, first-served." A store customer was the first to arrive on Saturday morning. He located the three advertised sweaters, picked them up, handed $15.00 to the clerk, and demanded all three sweaters at $5 each. The clerk stated that the store's price on each sweater was actually $50 each. The customer demanded the advertised price. Who has the superior legal position? A. The customer, because the terms of the advertisement were definite enough to constitute an offer and the offer was duly accepted. B. The retail store, because the terms of the advertisement were merely an invitation to make an offer, and the offer made was duly rejected by the store. C. The customer, because this was a contract of adhesion favoring one party only, and as such, the store could not enforce it. D. The store, in that a contract was made at $50 each, which was the store's actual intended price for the sweaters.

A. The ad is usually considered to be an invitation to the customer to come in and make an offer. However, in this case the terms were so specific and definitive, that it was likely to be considered a legal offer. That there must have been some kind of clerical or typographical mistake does not save the seller, because the seller bears the risk. The seller could have informed the buyer before he picked up the sweaters and brought them to ring up a sale.

A manufacturer of widgets sent a letter to an international widget retailer offering to sell ten truckloads of construction-quality widgets for $1,000 per truck. The retailer emailed a note back saying "Please send 10 truckloads as promised." No shipment was sent, but four months later when the market demand for widgets skyrocketed, the retailer sued the manufacturer for breach claiming that the retailer suffered damages by not having received the shipment of ten trucks as agreed. Does the retailer have a legal right to collect damages under these facts? A. Yes, there is a specific and detailed enough offer, followed by an unequivocal acceptance, indicating an intent to form a contract. B. No, the parties do not set a date for delivery, which always invalidates a contract between merchants for the delivery of goods. C. No, the retailer never called back and asked for the widgets, which means that the contract was not finally confirmed and legalized. D. Yes, the retailer is entitled to collect damages because the manufacturer violated the doctrine of avoidable consequences.

A. There appears to be the basic elements of contract formation: there is a definitive offer setting forth specific terms, and the offeree's acceptance of those terms. The other two elements, consideration and an intent to create a binding agreement are objectively seen as being present. Although a date of delivery is left out, under the circumstances where there is sufficient specificity of the other terms, the date will be deemed to take place within a "reasonable time."

When interpreting a contract, If A does not know/have reason to know B attached a different mean AND B does know/have reason to know that A had attached a different meaning, whose meaning prevails? A. A's meaning B. B's Meaning C. Neither

A. This is the innocent party rule. Here, A is the innocent party. Knowledge is shown by course of performance, course of dealing, trade usage

A man and woman lived together unmarried for 19 years. He assured her that they would live together as husband and wife but without the restriction of an official marriage license. She relied on those promises when giving up plans for a career in business. She assisted him in many substantial ways over the years as he progressed to becoming a successful neurosurgeon. During the years they displayed all of the trappings of being a married couple. When they split up, he refused to give her anything, saying that it was a meretricious relationship. She sued in state court claiming an interest in his income, profits and property. She claimed an express contract or an implied-in-fact agreement to share the economic wealth that was accumulated. The trial court dismissed, saying there could be no claim if there was no marriage. What is the most likely decision of the appellate court? A. The couple had an implied-in-fact contract, in which the woman had relied in good faith to her detriment, and she was entitled to damages. B. The rights and benefits claimed by the woman are based on a marital union under state law and there being no official marriage, her claims fail to have legal validity. C. There was a right to collect damages based on the massive, lengthy fraudulent scheme that the man perpetrated to keep her within his consuming web but without any economic benefit. D. This was a meretricious relationship in which the woman had been compensated for her services quite sufficiently over the years, but she had no residual legal claims that could be asserted.

A.The presumed intention of the parties was established by implication from the clear history of the facts. It was not essentially a meretricious undertaking, but was based founded legally on principles of contract. There was offer, acceptance and consideration. The contractual relationship was formed by contracting parties independently of any issue of whether there was a marriage. Courts don't favor "common law" marriages but the formation of a contract is a much easier legal conclusion based on the outward manifestations and intentions of the parties This is that case in class! In addition to implied-in-fact contract, the girl argued PROMISSORY ESTOPPEL and won.

In a single writing, a painter contracted with a farmer to paint three identical barns on her rural estate for $2,000 each. The contract provided for the farmer's payment of $6,000 upon the painter's completion of the work on all three barns. The painter did not ask for any payment when the first barn was completely painted but was demanded $4,000 after painting the second barn. Is the farmer obligated to make the $4,000 payment? a. No, because the farmer has no duty under the contract to pay anything to the painter until all three barns have been painted b. No, because the painter waived her right, if any, to payment on a per-barn basis by failing to demand $2,000 after painting the first barn c. Yes, because the contract is divisible d. Yes, because the painter substantially performed the contract.

A: There has been no breach of K, farmer doesn't need to pay until completion. Not D because Farmer has not breached the K for the painter to claim he substantially performed.

A lawn service company agreed in writing to purchase from a supplier all of its requirements for lawn care products during the next calendar year. In the writing, the supplier agreed to fulfill those requirements and to give the company a 10% discount off its published prices, but it reserved the right to increase the published prices during the year. After the parties had performed under the agreement for three months, the supplier notified the company that it would no longer give the company the 10% discount off the published prices. Does the company have a viable claim against the supplier for breach of contract? a. Yes because part performance of the agreement by both parties made it enforceable for the full year b. Yes, because the company's agreement to buy all of its lawn care products from the supplier made the agreement enforceable c. No because the supplier could, and did, revoke its offer with respect to future deliveries d. No because the absence of a minimum quantity term rendered the companies promise illusory

B- We have a contract so this is just a breach of contract. Part performance is totally irrelevant. They are stuck for 1 year.

UCC Battle of the forms IN an acceptance with additional terms in a contract NOT between merchants, the additional terms MUST A. be a mirror image of the offer B. be expressly agreed upon to become part of the K C. give sufficient notice D. Be objected to or else they are in the contract

B. First, if the K is NOT between merchants and acceptance has additional terms, if they are conditional (the K is conditional upon those terms), the acceptance operates as a rejection/counter offer. If the additional terms are NOT conditional, they only get in the contract if they are EXPRESSLY AGREED TO. Otherwise, they are mere proposals that do not get in the K.

Which electronic contracting probably does NOT give proper notice to the buyer. a. clickwrap b. Shrink wrap c. Browse wrap

C. Browse wrap usually gets shot down in court for lack of notice because its hidden on websites. Shrinkwrap is upheld if it gives clear notice to buyers that they can accept by keeping/reject by returning. Clickwrap is almost always upheld because the person physically clicks "I accept"

On April 1, Fay sends to Mort this signed fax message: "Mort -- April is upon us. I need your services -- this Wednesday, please, at 11am, Ill be ready with cash. Okay?" What additional circumstances, if proven, would most clearly mean that Fay's message constitutes an offer? A. Mort is a skilled landscaper, mechanic, and carpenter, and at various times in the past, Fay has hired him to perform services related to those skills. B. Every April for the last 12 years, Mort has trimmed the trees in Fays front yard, for which Fay each time has paid him $125. C. Fay does not know Mort, but has heard that he is a skilled landscaper D. By signed writing, Mort responds to Fay: "Yes, I'll be there." E. By signed writing, Mort responds to Fay: "I'll be glad to help you, but my fee is now $35 per hour."

B. Go back to Restatement (Second) §24 and read it. (That's easy.) Think of its meaning and apply it. (That's not so easy.) To determine that a given communication is an offer, examine (a) the communication itself, and (b) the circumstances under which it's made. Then ask yourself: "In my opinion, would a reasonable person receiving this communication understand that a definite bargain is proposed to him and that his assent will 'seal' the deal?" Fay wrote only this: "April is upon us. I need your services. I'll be ready with cash." Viewed objectively, Fay's message communicates almost nothing. It's like Dan's statement to George made in the movie line. Fay's words, by themselves, could not cause a man in Mort's position sensibly to draw any conclusion as to what she wants him to do or how much "cash" she'll pay him. Yet under some circumstances, Mort might reasonably take Fay's little fax as a definite proposition of specified terms. This question asks that we identify such a circumstance. Among the answer choices we're to find some fact that, if added to the story, would logically cause Mort to understand, specifically, what Fay wants of him, what she'll pay him in exchange, and that he need only express his assent to "close the deal." D and E concern Mort's response to Fay's message. They don't concern Fay's statement or the circumstances under which she makes it. In no way do they address the meaning of "offer." D and E are wrong. Consider A. If Mort were operating under the circumstance it describes, how would he naturally interpret Fay's message? He might think Fay has for him some work tied to landscaping, mechanics, or carpentry, and that she stands ready to pay some amount of money for his service. But he couldn't know with any specificity what Fay actually wants him to do or how much she's ready to pay. C tells us that Fay has heard that Mort is a capable landscaper — and, so what? C tells us something about Fay's state of mind, but it tells Mort nothing of what Fay proposes. C is wrong. And what of B? It tells us that every April, for twelve years, Mort has trimmed Fay's trees for $125. Mindful of that history — that circumstance — a reasonable person in Mort's position would justifiably conclude that Fay once again wants her trees trimmed, and that she's ready to pay, as before, $125 in cash. B is right.

A roofer offers to completely refurbish a homeowner's roof for $1,000. The next day the roofer realizes he's not going to make much, and he sends a revocation of the offer in the mail to customer. On the third day the homeowner puts a letter in the mailbox accepting the offer. On the fourth day the homeowner receives the roofer's revocation letter. Was a contract formed between the homeowner and the roofer or was the revocation effective? A. The revocation letter was posted prior to the acceptance so that no contract was formed. B. The acceptance was effective on posting but the revocation does not become effective until received; thus, a contract was formed when the acceptance was placed in the mailbox. C. No, there was no contract because there was no mutual meeting of the minds at any time. D. Yes, there was a contract because the revocation letter was invalid due to being based on reasons that violate public policy.

B.The letter of revocation can be effective only when received. However, an acceptance is effective when put in the mailbox so that a contract was formed on Day 3 when the letter of acceptance was posted. That is pursuant to what is typically called the "mailbox rule." At that point, it was too late for the roofer to revoke the contract.

A candy manufacturer used pre-printed purchase order forms to purchase separate orders of baking sugar from a supplier. The supplier responded to each order by sending the shipment along with its own printed form confirming the shipment and the terms. According to the manufacturer, the last shipment contained spoiled sugar. The manufacturer filed a complaint in state court alleging breach of contract and damages. The supplier filed a motion to have the dispute transferred to arbitration. The manufacturer's purchase order forms were silent as to the mode of settling disputes, but the supplier's form contained a clause calling for "any controversy or claim" to be settled by arbitration. The manufacturer was silent as to the arbitration clause. What is the likely decision of the court? a. the case must be transferred to arbitration because the clause in the acceptance form always becomes a part of the contract is the offeror does not reject it. b. The case must be transferred to arbitration because the additional term did not materially alter the offer and therefore became a part of the contract. c. The clause did NOT automatically become part of the contract because it materially altered the contract and thus there is no transfer to arbitation d. the clause did not become a part of the contract because the offer in this case expressly limited acceptance to the strict terms of the offer, and thus there is no transfer to arbitration.

C. An arbitration clause DOES materially alter the contract so it does NOT become a part. This is battle of the forms between merchants! The additional term did NOT automatically become a part of the contract under 2-207(2) because it materially altered the agreement. 2-207(2)(b). In most instances, an arbitration clause materially alters the contract because it prohibits the parties from using the courts to resolve their dispute. There is a related doctrine that requires acceptance of an arbitration clause to be explicit and not by implication. The parties must clear and affirmative express consent to the clause.

The owner of an engineering design company recruited a young man to work as a design engineer in the business development section of the business for two years. The man agreed to relocate from another state. He started working as soon as he arrived, and due to the pressing volume of work the parties never put the agreement in writing. Three months later, the owner fired the young man. The young man sued for damages, claiming that he had a legal right to the job for two years, unless fired for just cause, which the owner did not have. The owner countered that the alleged agreement was in violation of the Statute of Frauds and was void. Which one of the following legal principles did the trial court most likely cite in support of its ruling that the agreement was excepted from the Statute of Frauds and would be enforced? A. The principle of accord and satisfaction. B. The principle of mutual mistake. C. The principle of promissory estoppel. D. The principle of specific performance.

C. An oral promise which the promisor should reasonably expect to induce either action or forbearance on the part of the promisee is enforceable when injustice can be avoided only by enforcing the contract. See Restatement (Second) of Contracts § 217A. If a party has relied on an oral promise to his detriment, and rendered part performance the other party should be estopped from asserting the Statute of Frauds.

Promissory estoppel is an equitable claim whenever A. There may otherwise be lack of consideration B. The offer was revoked prior to acceptance C. Both A and B

C. No consideration and offer revoked are the two most common ways promissory estoppel can provide relief.

An auto retailer started a marketing promotion on a new hybrid model sedan. It advertised that anyone who purchased the car in 2013 and did not get at least 50 miles per gallon average gas mileage during the first 60 days, would receive a payment of $10,000 cash from the company. Record-keeping and inspection procedures were required to assure accurate reporting by the vehicle owner. The promotion was widely publicized. A female customer purchased a hybrid model during the promotion period, followed all the rules, and recorded only 42 mpg in the first 60 days. She demanded the rebate but the company stalled for months and then stopped responding to her inquiries. Does she have a contractual right to collect the $10,000? A. Yes, because this is a classic bilateral contract, making it necessary that the company live up to its set of promises made to her. B. No, this was merely puffing, was not an offer to contract with any particular person and was without consideration. C. Yes, this was a unilateral contract in which the offeree acted upon the offer by performing the terms of the offer, thus creating a binding contract. D. No, because she did not formally notify the company that she was accepting the offer before she started performing.

C. This is a unilateral contract where the offeree accepts the offer by performing an act which indicates his or her agreement with the bargain. In this case, it's clear that the offeror was intending to contract with anyone who was willing to perform the action requested. That's why rules and inspections were set up. This is to be distinguished from a bilateral contract which is an exchange of promises between the parties.

Bernard Bailey and Sahar Scott are long-time friends and business associates. For several months, Bernard has spoken to Sahar about the possibility of purchasing a parcel of Sahar's land. As Bernard and Sahar sit together one evening at a (dull) Chamber of Commerce meeting, Bernard takes hold of a wet cocktail napkin. On it he writes, in crayon, "About your land, 28 Pate Street, Addington, MT 78420 (Volume 909 land books, page 187), I'll buy it for $940,000 — let's close by the end of the week. Deal?" Bernard passes the napkin to Sahar. Sahar reads the message and takes from her pocket a piece of crumpled notepaper, personalized with her full name printed at its top. On the paper, with an eyebrow pencil, she circles her name, and writes, "Okay." Sahar passes her message to Bernard. On the following day, Bernard calls Sahar by telephone. "Let's set a date for closing, so I can pay you the $940,000 purchase price and you can hand me a deed to the Pate Street property." Sahar responds that she has changed her mind: "I'm not going to sell." Can Bernard sustain an action against Sahar for breach of a contract to sell the land? a. Probably not, because Bernard did not sign his name on the cocktail napkin b. Probably not, because the napkin and notepaper constitute two separate writings c. Probably, because Sahar "signed" her notepaper d. Probably, because the contract falls outside the Statute of Frauds

C: Does statute of frauds apply here?MYLEGS= Land so its under the statute of frauds. Is it met? Yes, it was authenticated by Sahar with the full name on his paper (letter head) Counts as writing Exception? nah. that isnt the Q.

What are the elements contract formation? a. Offer, Acceptance, Mutual Assent b. Mutual Assent, Consideration, Signed by both parties c. Offer, Acceptance, Consideration d. Mutual Assent, Offer, Acceptance, Signed by both parties

C: Offer, Acceptance and consideration (order doesn't matter).

While waiting in line to open an account with a bank, a customer read a poster on the bank's wall that said, "New Customers! $25 for 5 minutes. If you stand in line for more than 5 minutes, we will pay you $25! This offer may be withdrawn at any time" The customer started timing his wait and just as five minutes was about to pass, the bank manager tore the poster down and announced, "The $25 stand in line promotion is over." The customer waited in line for 10 minutes before being served. In the customer's action against the bank for $25, will he prevail? -A: No, bc bank withdrew their offer before the customer completed requested performance -B: No, bc banks statement was a non-binding gift -C: Yes, bc the bank could not revoke its offer once the customer had commenced performance -D: Yes, bc the customers presence in line served as notice to the bank that he had accepted.

C: This is a unilateral contract so it becomes irrevocable once there is partial performance. Partial performance is standing in line.

Consideration is NOT deemed void if a. it is pre-text b. a gift c. illusory promise d. insufficient

D. Consideration is NOT deemed void if it is insufficient. Courts don't decide if the consideration is inadequate or not. It WILL be deemed NOT consideration if a, b, or c.

SellCo installs and repairs computer systems. BellCo creates computer software. On July 18, the parties begin to exchange signed writings: July 18, BellCo: PURCHASE ORDER We understand that you wish to sell an IXM system, with all current software. We wish to purchase it and will pay $40,000, including installation. Our offer stands firm; it will not be withdrawn for 30 days. July 19, SellCo: Thank you. Please expect our response within three days. July 20, BellCo: We have decided not to purchase the system. July 21, SellCo: SALES CONFIRMATION Agreed: We will deliver one IXM system to your offices. Installation requires an additional $5,000 charge. THIS CONFIRMATION IS WHOLLY AND FULLY CONDITIONED ON BUYER'S ASSENT TO EACH AND EVERY ONE OF ITS TERMS. July 22, BellCo (by telephone): Thank you for your "sales acknowledgment," but as we advised you on July 20, we no longer wish to buy the system. July 23, SellCo (by signed fax): We accept your original proposal exactly as made. July 24, BellCo (by signed fax): As we have twice advised you, we no longer wish to purchase the system. If SellCo brings an action against BellCo for breach of contract, SellCo will a. prevail, because on July 23, it manifested assent to all of BellCo's proposed terms. b. prevail, because BellCo's initial offer was irrevocable for 30 days. c. not prevail, because on July 20, BellCo effectively revoked its offer. d. not prevail, because on July 21, SellCo rejected BellCo's offer.

D. If a merchant, by signed writing, offers to buy or sell goods and declares his offer firm/irrevocable for some particular time period, then the offer is irrevocable for the time stated (but for no longer than three months). Further, if any person (merchant or not) responds to an offer to buy or sell goods with an expression of acceptance, then he accepts the offer as made unless he expressly provides that his assent is conditional on the offeror's assent to each and every term set forth in the expression of acceptance. BellCo is a merchant. By signed writing, it offered to buy SellCo's computer system, stating that its offer was firm for 30 days. For that period, therefore, the offer was irrevocable and BellCo had no power to revoke it. Its July 20 attempt to do so was ineffective, and the offer remained open. On July 21, however, SellCo responded with a non-mirror-image expression of acceptance. That response would operate as an acceptance of BellCo's offer were it not for the fact that SellCo expressly provided that its assent was conditional on BellCo's assent to all of its terms. Consequently, SellCo's response did not operate as an acceptance. It was a counteroffer and rejection, meaning that on July 21, SellCo rendered BellCo's offer inoperative and thus terminated its own power to accept. When, on July 23, SellCo attempted to accept the offer unconditionally, it accomplished nothing. According to A and B, SellCo prevails. Both are wrong. As for a reason, A reports that SellCo assented fully to BellCo's offer on July 23. SellCo did that, but it had rejected the offer two days earlier on July 21. Its mirror-image assent on July 23 came too late. B correctly tells us that BellCo's offer was irrevocable for 30 days. Nonetheless, it was susceptible to rejection, and on July 21, SellCo did reject it. C correctly states that SellCo will not prevail, but its reasoning is wrong. BellCo's offer was irrevocable for 30 days from July 18. On July 20, its attempt to revoke was without effect. D, alas, speaketh truth. It says that SellCo will not prevail because, on July 21, it rejected BellCo's offer. That's right; it did, and by doing so, it put the offer to death. On July 23, its attempt to accept was ineffective. D is right.

Which is NOT an exception to UCC statute of frauds? a. party admission under oath b. specially manufactured goods c. payment has been made d. partial performance when specific performance is requested e. goods have been received f. promissory estoppel g. between merchants and not objected to within 10 days

D. Partial performance when specific performance requested is an exception to statute of frauds under the RESTATEMENTS requirement of a K that must be performed within a year. NOT UCC goods over $500.

Promissory restitution is whenever a past promise is reinstated MOST often in the situation of: a. When one party commits bankruptcy b. When the statute of limitations has run c. a promise to pay the debt of a minor d. all of the above

D. all of the above

A woman asked a male friend to hold her valuable antique jewelry in safe storage for her while she traveled in a foreign country. He owned a jewelry store and graciously offered to store the collection for free. He also volunteered to get the jewelry insured at his own expense. She relied on the promises, and turned over the collection to him without the payment of monetary consideration. He forgot to get the jewelry insured, and the collection was stolen in an armed robbery of the jewelry store. When she returned, he refused to compensate her for the stolen collection. Which one of the following legal principles would be her strongest and most accurate claim for remuneration under these facts? A. The principle of unilateral contract. B. The principle of equitable trust. C. The principle of natural consideration. D. The principle of promissory estoppel.

D.If a person makes a gratuitous promise, and then enters upon the performance of it, he may be held to a contractual obligation under promissory estoppel. When she relied on his promise and turned the jewelry over to him, the law implied a contract. Promissory estoppel makes a promise binding where "all the other elements of a contract exist, but consideration is lacking." Dumas v. Infinity Broadcasting Corp., 416 F.3d 671, 677 (7th Cir. 2005). To establish the elements of promissory estoppel, the plaintiff must prove that (1) defendant made an unambiguous promise to plaintiff, (2) plaintiff relied on such promise, (3) plaintiff's reliance was expected and foreseeable by defendants, and (4) plaintiff relied on the promise to the plaintiff's detriment. Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 233 Ill.2d 46, 329 Ill. Dec. 322, 906 N.E.2d 520, 523-24 (2009); Wigod v. Wells Fargo Bank, NA, 673 F. 3d 547, 566 (7th Cir. 2012). Here, there has been a justifiable reliance, which induces action or forbearance, and there would be an injustice if the promise is not enforced.

Biff is a professional juggler. Shelley sells carnival equipment. The parties exchange these signed writings: April 10, Shelley: I have twelve surplus juggling pins: height — 9 inches; color — blue/yellow striped; bottom circumference — 3 inches. I'm ready to sell them to you at $3 each. Think it over; take your time. Don't worry; I won't withdraw the offer. April 11, Biff: Yes, I'll think it over. May 15, Shelley: Regarding our communications of April, I no longer have the pins in stock. The offer is withdrawn. Biff: But just before you contacted me — just now — I had decided to accept. I do accept. Shelley: Sorry. We no longer have the pins. Biff: I've just told you that I accept your original offer. You're obliged to perform. Shelley: Forget it. We can't. Which of the following additional facts, if proven, would most strengthen Shelley's position that she is not in breach of contract? a. Shelley's statement 5 on May 15 set forth these additional words: "but for the same price, we have other juggling pins of the same size, different in color." b. Biff's first statement of May 15 set forth these additional words: "but only on the condition that you reduce the price to $2 per unit; otherwise, I don't want them." c. On May 15, Biff was not truthful in stating that he had decided to accept just before Shelley contacted him. d. On April 12, Shelley, by signed writing, sent Biff this message: "That's fine, but please realize that the offer expires in one week."

Statement B would strengthen Shelly's position that she is not in breach of contract because if Biff If offer is a firm offer because it is 1. between merchants 2. signed (electronically is fine) 3. there is assurance of the firm offer and 4. and no time period is specified, it is 3 months or a reasonable amount of time. If Biff rejects and counteroffers, the OG firm offer is gone.

How is the statute of frauds MET?

signed writing by the party to be charged. Several writings can be pieced together if at least one is signed and they are sufficiently connected to the same transaction (multiple documents rule).