Contracts I
Pat agrees to buy Dana's car for $10,000. The contract between Pat and Dana will be:
governed by the Uniform Commercial Code.
In Hawkins v. McGee, the court found that Dr. McGee's statement about making the injured hand a "100% good hand" was a":
guarantee
Which of the following is the best description of the Statute of Frauds?
Only certain types of contracts need to be in writing.
Based upon your reading of the George v. Davoli case, which statement best describes the holding of the New York Supreme Court, Appellate Division?
Oral evidence is admissible to supplement a written agreement that is not final and complete.
Paul owes Big $10,000. Since Paul has lost his job and cannot afford to pay Big the entire $10,000 owed, Paul wrote a check to Big for $1,000 - all the money that Paul has - and wrote on the back of the check, "Accept only as payment in full of my $10,000 debt." Big endorsed and cashed the check. Which of the following is the most accurate statement of Paul's obligation to Big?
Paul still owes the $9,000 balance of the debt to Big if there is no good faith dispute between Paul and Big regarding the amount owed or if Big was not aware of the basis of the dispute.
Which of the following is not a recognized exception to the UCC's perfect tender rule?
Failure of consideration.
Which of the following is best description of the three essential elements of consideration?
(1) Legal sufficiency, (2) bargained-for exchange, and (3) determinable promises.
Under Section 90 of the first Restatement of Contracts, detrimental reliance requires
- A promise the promisor should reasonably expect to induce action or forbearance. - A promise that actually does induce action or forbearance.
Where consideration is inadequate, promissory estoppel
- Allows a contract to be enforced. - Serves as a substitute for consideration.
Damages for detrimental reliance
- Can be measured by the terms of the contract. - Can be measured by the amount necessary to protect the reliance interest. - Can be measured by the amount necessary to protect the expectancy interest.
Where a party promises to pay a time-barred debt
- The promise is enforceable. - There is an exception to the requirement of consideration.
Unsolicited merchandise
- may be kept and not paid for. - must be paid for, if there is a pre-existing business relationship.
If an offer has no quantity term:
- no contract can be formed. - but does commit the purchaser to buy the amount the purchaser requires, a contract can be formed.
The offeree accepts the offer:
- when the offeree acts with the intent to accept the offer. - when the offeree acts to do what the offer requires for acceptance.
In an auction, generally the auctioneer:
-Makes an invitation to bid, then the bidder makes an offer. - Can accept an offer. - Can seek another offer.
Which of the following statements is NOT true? A) A "bad deal" on the part of a party to a contract will render consideration inadequate. B) It would be an unwarranted interference with freedom of contract if a court were to relieve an adult party from a bad exchange. C) Generally, courts do not review the adequacy of the consideration of a contract. D) Economic inadequacy of a detriment is one of the factors courts will consider in determining whether the promisor really exchanged a promise in return for a small detriment.
A "bad deal" on the part of a party to a contract will render consideration inadequate.
Based upon your reading of the Gallon v. Lloyd-Thomas Co. case, which of the following is true?
A contract entered into under duress is voidable but can be subsequently ratified. (Chapter 7, Section 1, page 317 of CB)
Assume that A and B are both merchants and they have an oral agreement for the sale of goods. Assume also that B quickly sent a written confirmation of the oral agreement but the confirmation contained additional non-material terms. If, after several weeks, A has not objected, how would a court most likely rule?
A contract exists between A and B including B's terms.
A submits an offer in writing to provide B with goods and B responds in writing stating that she accepts the offer, but B's response includes additional material terms. If A provides the goods and B accepts them, which of the following best describes the contractual relationship between A and B?
A contract including only A's terms.
A submitted an offer in writing to provide B with a service. B responded in writing stating that she accepts the offer, but B included somewhat different material terms. If A begins to provide the agreed services for B, a court will most likely rule that there is:
A contract including the terms in B's written response.
Which of the following states the best definition of the parol evidence rule?
A final agreement supersedes tentative terms discussed in earlier negotiations.
Which of the following is the most accurate statement as to the role of a judge and jury in a court of law?
A judge is to determine questions of law and a jury is to determine questions of fact.
Which of the following statements about a promise by an executor or administrator is not true?
A promise by an administrator or executor to pay a claim out of the assets of the decedent's estate is within the Statute of Frauds.
Which of the following is the most accurate statement regarding UCC?
Article 2 of the Uniform Commercial Code represents majority law to be used to determine the outcome of disputes involving a contract for the sale of goods.
Which one of the following statements about a modification is correct? A) A valid modification can be retracted. B) A waiver can be retracted. C) A modification can never act as a waiver. D) Both of the statements in choice A and choice B are correct.
A waiver can be retracted.
On December 1, A agreed to buy a drill press from B for $1,000, with delivery on or before March 1. On January 1, A told B that he would be willing to take delivery on April 1. On January 3, A changed his mind, and insisted upon delivery on or before March 1. B delivered the drill press on April 1, and A rejected it on the grounds of lateness. When B sues for breach:
A will prevail, as the drill press was delivered after March 1, and A had effectively reinstated the March 1 condition by giving B timely notice of its reinstatement.
Based upon your reading of the Austin Instrument, Inc. v. Loral Corp. case, which of the following is true?
A wrongful threat to breach an agreement by withholding goods is not sufficient to establish economic duress.
Under the UCC 2-601, the perfect tender rule, if the goods fail in any respect to conform to the contract, the buyer may:
A) Reject the whole. B) Accept the whole. C) Accept any commercial unit or units and reject the rest.
A party is a merchant under the UCC if he or she:
A) deals in goods of the kind involved in the transaction. B) by occupation holds himself or herself out as having knowledge or skill peculiar to the practices involved in the transaction. C) hires as his or her agent someone who qualifies as a merchant under (a) or (b).
Buyer telephoned seller and made the seller a valid offer to buy goods from the seller. Assume that the seller did not accept the offer during the telephone call. Absent any manifestation of contrary intent by either party, at what time will most courts find that the buyer's offer lapsed?
After the phone call came to an end.
Which of the following statements regarding estimates is most accurate?
An estimate can be an offer if it is sent in response to an invitation to bid.
Promissory estoppel is
An exception to the requirements of the Statute of Frauds.
City posted this announcement on its website: "The City will pay $2,000 to anyone with information leading to the arrest and conviction of the person or persons responsible for vandalizing City Park last weekend." Anne saw it all happen, and knows the names of the people who did it. If she wants to receive the reward:
Anne can accept the offer by providing the information to City.
Charitable subscriptions
Are enforceable, without consideration.
Davis, a supplier of religious items, needs to obtain an inventory of metal crosses. He contracts with Petterman to make and deliver 10,000 crosses at $1.00 per cross. Petterman manufactures and delivers half of the crosses and Davis pays $5,000. Petterman then tells Davis that the price has gone up to $1.50 per cross. Davis agrees because he needs the crosses. When Petterman delivers the crosses, what price is she entitled to be paid?
At a rate of $1.50 each, if the modification was requested in good faith.
On December 1, A agreed to buy a drill press from B for $1,000, with delivery on or before March 1. On January 1, A told B that he would be willing to take delivery on April 1. B delivered the drill press on April 1, and A rejected it on the grounds of lateness. When B sues for breach:
B will prevail, as A has waived the right to receive the drill press on or before March 1.
A, a merchant, makes an offer by mail to B in a signed writing. The offer provides assurances that it will be held open for two weeks. B sends an unequivocal acceptance by mail to A's authorized address. The contract is formed when:
B's correspondence is received by A.
G a general contractor, solicited bids for a project from subcontractors, including S. S replied "I can't give you a bid, because I don't trust your specifications. But it should be about $2.00 per cubic foot. It's fine with me if you want to use my quote or if you don't." G used the quote from S in preparing her bid, and was awarded the contract. Because of this, G claims that S has a duty to perform at a rate of $2.00 per cubic foot. Is the quote from S an offer?
Because S's response included the words "I can't give you a bid," S;s response is not an offer.
Sarah manufactures and sells novelty dolls. Bernhardt is a retail novelty store owner who specializes in dolls. Sarah and Bernhardt enter into a written agreement wherein Bernhardt agrees to buy from Sarah 600 of Sarah's novelty dolls at a specific price. One particular clause in the agreement states that Bernhardt has the right to purchase an additional 400 dolls at any time during the time period covered by the agreement. Bernhardt orders an additional 400 dolls, but Sarah does not deliver them. What are the rights of the parties?
Bernhardt has the right to purchase 400 additional dolls from Sarah under the terms of the contract.
Assume that Bill has a valid claim against Jan for $10,000 due in one year for a loan Bill made to Jan. Later Jan and Bill become good friends and Bill tells Jan she does not have to pay the full $10,000 if she will instead pay him $8,000 within one week. Five days later, Jan pays Bill $8,000. If Bill on year later asserts the breach of contract claim against Jan seeking $2,000 he claims is still owed under the original loan, a court will most likely find that
Bill's surrender of the $10,000 claim is supported by new consideration--the right to receive payment within one week.
Builder contracted with Tenant to build a building to Tenant's specifications and then lease it to Tenant. Time was of the essence, but Builder finished 3 months late. Tenant canceled the contract and leased space elsewhere. Builder sues, proving at trial that the delay was caused by Tenant's failure to indicate locations for electrical fixtures, outlets, and other details as required by the contract between the parties. Who will prevail?
Builder will prevail, as Tenant has a duty to perform, because the condition precedent to the Tenant's performance was impeded by Tenant's non-cooperation.
You have lunch to go from the same place every day, and you always order the same thing, your "usual." You go to the counter and the cashier hands you your usual, neither of you speak a word. Which of the following is correct?
By conduct, you have made an offer and the cashier has accepted it.
In which case did the appellate court decide that the circuit court erred in failing to recognize that a duty of good faith and fair dealing was included in the real estate brokerage contract?
Cantrell-Waind & Associates, Inc. v. Guillaume Motorsports, Inc.
The 1919 contract between Chicago White Sox owner Charles Comiskey and star pitcher Eddie Cicotte set Cicotte's salary at $10,000, with a $6,000 bonus if Cicotte pitched 30 winning games in the regular season. After Cicotte pitched his 29th winning game, Comiskey took Cicotte out of the pitching rotation for the remaining 5 games of the regular season. If Cicotte sued Comiskey to collect the bonus:
Cicotte would prevail, as Comiskey wrongfully prevented Cicotte from having a chance at winning a 30th game.
What is meant by the "objective theory of contracts?"
Communication by one party are to be interpreted from the vantage point of a reasonable person in the position of the other party.
Which of the following is not an accurate statement with regard to course of performance and its effect on modification?
Course of performance may provide the consideration a court can consider under both the common law and UCC Article 2.
In a sale of goods contract, how will the courts respond to a failure of the parties to specify a quantity of goods?
Courts will not enforce the contract because it is missing a material term.
Dick entered into an employment agreement with Ajax Company that provides for a set salary and also for a performance-based bonus. Ajax paid Dick his salary for the first year, but refused to pay the performance-based bonus stating that the consideration for Dick's work was the salary and there was no consideration for the bonus - there must be a separate consideration for the bonus. Dick brought suit against Ajax for the bonus. Who will prevail in this lawsuit?
Dick, because one consideration will support many promises.
Which of the following characteristics of undue influence where no confidential relationship exists between the parties was present in Methodist Mission Home of Texas v. N A B?
Discussion of the transaction at an unusual or inappropriate time. (See HB Section 9.11)
Which of the following statements about the parol evidence rule is false?
Does not apply to contemporaneous agreements.
Which of the following factors will a court consider when determining whether the parties have entered into a valid modification of an existing contract?
Duress, Statute of Frauds, Good Faith
Barry signed an agreement without reading it, but checked off a box in the agreement that stated: "By checking this box, you agree that you have read and understood the entire agreement and that all terms contained therein are bargained for." Which of the following statements most accurately states the legal effect of Barry's conduct?
Even though Barry did not read the agreement, if the terms objectively contain the appearance of a bargained for exchange, consideration is present.
Based upon the Lee v. Joseph E. Seagram & Sons, Inc. case, which statement below, best describes the ruling of the Court of Appeals?
Evidence of the oral agreement was admissible because it did not contradict the written contract.
Which of the following is NOT an element of misrepresentation?
False statement of opinion.
In determining whether an advertisement is an offer:
courts look to whether the text contains the requirements for a valid offer.
Past performance
Generally cannot serve as present consideration.
Under the UCC Article 2, a written modification is required in which one of the following situations?
If the contract as modified is within the Statute of Frauds provision of the UCC .
In which of the following situations is a writing most likely to be a considered a total integration?
If the writing was both final and complete.
If an offer is unclear as to the proper mode of acceptance, how can the offer be accepted?
In any manner reasonable under the circumstances.
Regarding the Sale of Goods Valued at $500 or More under the Statute of Frauds, which of the following statements is not true?
It applies to sale of goods only if the "goods" were manufactured and sold by the manufacturer.
Which of the following statements best describes the Restatement of Contracts?
It does not have the force of law, but is highly persuasive.
Based upon your reading of the Francois v. Francois case, which of the following is true regarding undue influence?
It is not a concept susceptible of a uniform definition. (Chapter 7, Section 2, page 327 of CB)
Which of the following is correct regarding the term "failure of consideration"?
It means "a failure to perform."
In which case did the court state that to decide whether a contract term was a promise or a condition depends on considerations of both justice and the presumable intentions of the parties?
Jacob and Youngs, Inc. v. Kent.
Mother says to Sissy, "since you have taken care of me all these years, I promise to pay you $100,000 at the end of the year." Will a court enforce Mother's promise to Sissy?
No, Mother does not have to pay because Mother's promise did not induce any detriment by Sissy.
In which case did the court decide that when a subcontractor's employee negligently damaged the contractor's wall, it constituted a breach of the subcontractor's promise to perform in a workmanlike manner?
K & G Construction Co. v. Harris.
Which of the cases that were included in the assigned reading for Module 1 based its holding in part on the rule that an unreasonable meaning attached by one party to a specific assertion will control only if that unreasonable meaning is known to the other party?
Lucy v. Zehmer
The court stated that it placed emphasis on post-contractual versus pre-contractual conduct when deciding whether an obligation to act in good faith should be read into the contract in which of the following cases?
Market Street Associates Limited Partnership v. Frey.
Where a party has promised to obtain a policy of insurance to protect the property of another,
Modernly, courts have done away with the distinction between misfeasance and nonfeasance in this context, and have found liability where reliance on the promise to obtain insurance is justified.
When Darlene bought some mountain property, she constructed a road on her property, but next to the border of adjacent land owned by Ms. Painter. Darlene asked Ms. Painter if she would be interested in sharing the cost of construction and maintenance in exchange for use of the road. They agreed. By the terms of their written agreement, Ms. Painter was allowed to terminate the agreement at will. Everything went fine for a number of years and both Darlene and Ms. Painter paid one-half of the road maintenance expense until Darlene refused to allow Ms. Painter to use the road. Ms. Painter sues Darlene for breach of contract and Darlene claims, as her defense, mutuality of agreement. What result?
Ms. Painter will prevail, because the court would imply that reasonable notice be given prior to termination.
Grandpa promised granddaughter that if granddaughter would take a trip to Africa, he would reimburse her travel expenses. Grandpa fell sick and died while granddaughter was in Africa, now grandpa's estate
Must pay the expenses, because grandpa's promise is supported by consideration.
Offeror posts on a Web page an offer that can be accepted by any viewer. If the offeror wants to revoke the offer, the offeror must do which of the following?
Must post a revocation of the offer on the Web page.
What jurisdiction's law is used to determine the outcome in Texaco, Inc. v. Pennzoil, Co?
New York law, because the court found New York law to be controlling.
A, a merchant, makes an offer by mail to B in a signed writing. The offer provides assurances that it will be held open for two weeks. The following week, A changes her mind and calls B to revoke the offer. Is the offer revocable?
No
A owes B $20,000 and A agrees that he will pay back the money to B "so long as my union does not order me to walk off my job." Later, A's union goes on strike and orders A to walk off the job. Does A have an obligation to pay B the $20,000 owed?
No, A does not have to pay B because A's promise to pay so long as A is not ordered by his union to walk off the job is outside the control of A.
Arthur calls Betty and says: "I am in a real fix and I must sell my house. I am so motivated that I would consider $100,000 for it." Immediately Betty says: "I'm sorry about your predicament. I will buy your house for $100,000." Is there a contract?
No, because Arthur never accepted Betty's offer.
Jill says to Dave, "If you ride your bike from San Diego to New York City by September, I promise to pay you $10,000." Dave promises to ride. Is there a contract?
No, because Dave did not accept Jill's offer.
Review the following conversation: Kathy: "Jerry, will you consider buying my cabin in Aspen? If you will make me an offer, I will consider it." Jerry: "Okay, $5.00." Kathy: "No, that is not enough." Jerry: "Will you accept $85,000?" Kathy: "I won't sell it for less than $95,000." Jerry: "I accept." Was there a contract?
No, because Kathy never offered to sell the property for $95,000.
Jeff does fine carpentry work. Mutt and Jeff enter into a contract whereby Jeff will perform carpentry for Mutt and Mutt will pay $10,000 to Jeff upon completion of the work. Jeff finishes the work and Mutt is so pleased he tells Jeff that he will pay Jeff an additional $1,000. Is Mutt obligated by contract to pay the extra $1,000?
No, because Mutt's promise to pay the additional $1,000 was not supported by consideration.
O was the owner of vacant land in another state. When he visited the land, he found that S had built a house on the empty lot. When O tried to enter the house, S told O that if O stayed there, O would be contractually obligated to pay for the house. Is S correct?
No, because O had no opportunity to reject the house.
Buyer and Seller want to do business together, but they would like to have a relatively informal arrangement. They prepare a written "Gentlemen's Agreement," but state in the agreement that it is not binding. It also states, "This writing is only an expression of our intention to work honorably together. We have always worked well together, therefore, we do not wish to be bound by this document." When the business relationship ends there are $100,000 worth of orders pending, but not delivered by Seller. Seller refuses to ship the orders and Buyer sues. Does Buyer prevail?
No, because this was just a "gentlemen's agreement" and was not intended to have legal effect.
Max and Sam have been business partners for years, with Max being the managing partner and Sam being a passive investor. Max needs to go to Canada to settle the estate of his uncle and before he leaves, in order to keep the business open, Max agrees to pay Sam $20,000 per month for his services managing the business while Max is away. They both agree that the business cannot run itself, and Sam needs to protect both of their investments. Has an enforceable contract been formed?
No, if there is a presumption that the parties did not intend to create a contract.
A large daily newspaper publishes and distributes two booklets, one regarding general advertising rates, and the other regarding advertisements that will not be accepted. These booklets state that the newspaper will refuse advertising that is "dishonest, indecent or illegal." A labor union presented an advertisement to the newspaper that urged readers not to patronize certain businesses because those businesses featured imported clothing that was manufactured by low-wage, foreign labor. The union also paid the appropriate advertising rate in accordance with general advertising rates, but the newspaper refused to print the advertising. Assume that the advertisement was not dishonest, indecent, or illegal. Will the union prevail against the newspaper for breach of contract?
No, the Defendant's booklet containing its "General Advertising Rates" is only a statement of intention to sell or invitation for offers.
Sir Henry Magazine derives a great deal of income from the sale of advertising. It publishes a "rate sheet" as well as an "Advertising Guidelines" brochure. The Advertising Guidelines brochure states, "Sir Henry reserves the right to refuse to print advertising for untruthful copy." A nonprofit political action group presented an advertisement stating that a local political figure had used political contributions for personal use. The group paid the advertising rate in accordance with the rate sheet, but the magazine refused to print the advertising even though it admitted the advertisement was truthful. Will the political action group prevail against the magazine?
No, the magazine's rate sheet is only a statement of intention to sell or invitation for offers.
Offeror mailed a valid offer to an intended offeree and then died of a heart attack the next morning. The offeree received the offer at noon and, not knowing of the offeror's death, mailed an acceptance of the offer that same afternoon. Is there a valid contract under the majority view?
No, the offeror's death terminated the offeree's power of acceptance.
Dexter and Posley enter into an agreement whereby Dexter is to grow and deliver corn to Posley at a specified time, price, quantity and quality. The agreement states that "either party may terminate this agreement at any time." After more than 10 years of performance under the contract, Dexter terminates the agreement. Is Dexter justified?
No, unless Dexter gave Posley reasonable notice.
John had read many newspaper and Internet news articles suggesting that the fillings commonly used by dentists to fill teeth contained dangerously high levels of mercury. John decided that he would have all his fillings removed and replaced with another safer alternative. He consulted with Dr. Decay, his dentist, and requested removal of all his fillings. Dr. Decay stated that he was not comfortable performing the oral procedure, but that he would make sure that Dr. Abcess would perform the oral procedure. In Dr. Decay's informed medical opinion, removal of John's fillings is not medically required. If Dr. Decay fails to retain Dr. Abcess to perform the oral procedure, will John have an action for breach of contract against Dr. Decay?
No, unless John reasonably concluded that Dr. Decay expressly promised him that Dr. Abcess would perform the procedure.
Harry and Sandra have been happily married since 1866. Harry needs to go to England to write a play and before he leaves, in order to maintain domestic tranquility, he agrees to pay Sandra $5000 per week for her support. The both agree that Sandra has financial needs and that she has always worked hard at maintaining the house. Has an enforceable contract been formed?
No. There is a presumption that the parties did not intend to create a contract.
Alice cannot find her $800 set of china table settings. Some months later, while at a party for connoisseurs of fine china, and after consuming an adult beverage, Alice proclaims in front of the entire group that she will gladly pay $2000 to anyone who locates and returns the china to her. Percy locates and returns the chine to Alice and demands $2000, Alice refuses to pay. Percy files suit to recover the $2000. It is most likely that Percy will:
Prevail, if a reasonable person would conclude front the statement Alice made that she intended to enter into a contract.
Based upon your reading of the Potter v Hatter Farms, Inc. case, which statement was not true regarding the applicability of the doctrine of promissory estoppel?
Promissory estoppel was displaced by UCC 2-201 because this doctrine was not expressly mentioned in that statute.
Which of the following statements is true regarding reformation?
Ratification can terminate the right to reformation. (Section 9.36 of HB)
Sandy says to Dave, "I promise to buy you lunch if you pay me the $100 you owe me." Which of the following statements is most accurate regarding Sandy's promise?
Sandy's promise is not consideration because Dave's performance would merely be performance of something Dave was already legally obligated to do.
In providing a bid to a general contractor for a construction contract, a subcontractor is
Seeking the general contractor's reliance on the bid.
Anne and Bob were co-workers of a small, very successful restaurant. Anne was interested in opening a second location in a nearby town and asked Sam (a regular customer of the restaurant) if he would be willing to sell Anne and Bob a particular parcel of land Sam owned in the nearby town of Greenville for $100,000. Sam said :Sounds great...let's do it." However, unknown to Anne and Bob, Sam had serious doubts about selling the land and was considering developing the land himself to build and operate a restaurant. When Anne attempted to hand Same the $100,000, Sam refused to take the money and told Anne he would not see Anne and Bob the land. Anne and Bob sued Sam for breach of contract. Sam alleged he never intended to sell the land to Anne and Bob. At trial, the following three statements were offered: 1. Bob testified that he and Anne had "no definite plan to ever open a second restaurant, and that Sam was aware of this". 2. Same testified that he "never really intended to sell the property to Anne and Bob." 3. Anne testified that she was very surprised when Same so quickly agreed to sell because Sam was always joking about "how you should buy my land in Greenville and open a second restaurant there so I wouldn't have to drive so far for breakfast." Which of the statements will the court consider important to determine if a valid contract was formed?
Statements 1 and 3 only. - Bob testified that he and Anne had "no definite plan to ever open a second restaurant, and that Sam was aware of this". - Anne testified that she was very surprised when Same so quickly agreed to sell because Sam was always joking about "how you should buy my land in Greenville and open a second restaurant there so I wouldn't have to drive so far for breakfast."
Which of the following statements is not correct? Question 10 options: A) A party need not perform on the precise day stated in the contract unless time is made of the essence. B) A willful breach is more likely to be regarded as material than a breach caused by negligence. C) Stating a time certain for performance makes time of the essence. D) A quantitatively serious breach is more likely to be considered material.
Stating a time certain for performance makes time of the essence.
Regarding the Marriage provision of the Statute of Frauds, which of the following statements is true?
The Statute of Frauds applies to any agreement made on consideration of marriage, except mutual promises to marry.
In Bartus v. Riccardi, the defendant asserted each of the following arguments except
The UCC permits a seller to cure a non-conforming delivery under certain circumstances.
Under UCC 2-209, a merchant may supply a form which requires modification or rescission be in a signed record. Which of the following is true under the UCC if an oral modification or rescission is made in violation of a clause forbidding any oral modifications of the written contract?
The attempted oral modification can operate as a waiver.
All of the following are correct interpretations of Lancellotti v. Thomas except:
The court rejected the Restatement of Contracts and relied on the common law rule denying recovery to a breaching party.
Regarding the Land provision of the Statute of Frauds, which of the following statements is true?
The doctrine of part performance is an exception.
In the Gianni v. R. Russell & Co. case, referred to in Section 3.2 (a) of the Hornbook, which of the following statements best reflects the court's holding?
The evidence was excluded because of the parol evidence rule.
According to the Restatement of the Law of Contracts, which of the following is not a relevant factor to use to determine whether a breach of contract is material?
The injured party's firm belief that the breach is material.
Which of the following is a well-recognized exception to the suretyship contracts covered by the Statute of Frauds?
The main purpose rule.
Which of the following correctly states the Restatement (Second) definition of offer?
The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
Which of the following is not an important factor in determining whether a communication is or is not an offer?
The manner used to communicate the potential offer.
A and B sign a written contract for A's services over the next 18 months, for which B will pay $160,000. Neither A nor B noticed that the typist had mistakenly typed $120,000. How does this error affect the rights of A and B?
The memorandum will likely be reformed to show the true agreement of the parties.
Which of the following is correct regarding substantial performance?
The modern notion is that a willful breach does not prevent substantial performance; it is only one of the factors to be considered.
Assume that an offeree learns from a reliable source that land that has been offered to her by a seller, has also been offered by the seller to another interested party who had not yet accepted. Which one of the following statements most accurately describes the offeree's rights?
The offeree may accept the offer.
What is required before a court will enforce a contract for services where the price term is not provided in the contract but has been left to be agreed upon by the parties at a later time?
The parties' actions must conclusively show that they have intended to conclude a binding agreement.
Based upon the Nanakuli Paving and Rock Co. v. Shell Oil Co. case, which of the following statements is true?
The parties' course of performance was more important than trade usage to determine the terms of an agreement.
A party's ability to modify an agreement under the UCC requires good faith. Which of the following statements is correct regarding the two distinct inquiries a court must make to determine if the parties entered into the modification in good faith?
The party asserting the modification must demonstrate that he was in fact motivated by a legitimate honest commercial reason and that the conduct is consistent with "reasonable commercial standards of fair dealing in the trade."
Which of the following states one of Williston's Rules regarding the parol evidence rule?
The presence of a merger clause creates a rebuttable presumption that an integration is total.
Which of the following statements is not true according to the majority rules applicable to suretyship contracts?
The promisor and the principal debtor can owe the original debt jointly.
Based on Roth Steel Products v. Sharon Steel Corp., which of the following statements is not correct?
The seller's subjective bad faith is not an element of the good faith requirement.
Between the UCC and the common law, the controlling law of a contract is determined by:
The subject matter of the contract.
Based upon your reading of the Cousineau v. Walker case, which of the following statements is true?
The test for materiality in a case dealing with misrepresentation is that of the reasonable person. (Chapter 7, Section 3, page 336 of CB)
Regarding the One Year Rule of the Statute of Frauds, which of the following statements is true?
The test is not how long the performance will take, but instead when it will be complete from the time the agreement was entered into.
A makes an offer by mail to B. B sends an acceptance by first class mail, but then sends a rejection by overnight express mail. A receives the rejection first. Which of the following best states the rights of A and B under the Restatement view?
There is a contract between A and B, but B has offered to rescind it.
In non-attorney cases, which of the following is not an element of undue influence?
There must be a familial relationship between the parties. Section 9.10 (a) of HB)
Which of the following statements is NOT true regarding course of dealing, course of performance, and usage of trade?
These topics are not applicable at common law.
Which of the following is not correct regarding constructive conditions?
They disregard the effect of present or prospective inability to perform.
Which of the following is most accurate regarding whether a writing will be considered a final embodiment of an agreement?
To determine if a writing is a final embodiment, a court looks to the intent of the parties.
Which one of the following statements is most accurate? A) Under the UCC, a modification must be express. B) Under both the UCC and common law, modification can be implied only if modification was reasonably contemplated at the time of the contract. C) Under both the UCC and common law, modification may be either express or implied. D) Under the UCC and common law, modification may be implied only where there are economic exigencies
Under both the UCC and common law, modification may be either express or implied.
Which of the following is not correct regarding waivers? A) A waiver is an indication of a willingness to perform despite the non-occurrence of a condition. B) Many waivers are unintentional. C) A waiver of a condition under an existing contract after the failure of the condition is also called an election. D) Waiver is a question of law rather than fact.
Waiver is a question of law rather than fact.
Regarding mistake of law and mistake in performance by overpayment, which of the following statement is true?
When an enforceable contract exists and one party pays money to the other party under the mistaken belief that the payment is required by the contract, the payment can be recovered. (Section 9.29 of HB)
A makes an offer to B, suggesting no particular means of acceptance. B responds by mail. Assuming a response by mail is reasonable, when is B's acceptance effective?
When put in the mail box.
A makes an offer to B by e-mail, suggesting that acceptance should be by e-mail response. B accepted by regular mail with a properly stamped and addressed letter. Assuming that a response by regular mail is an improper medium, when under the traditional rule would B's letter acceptance be effective?
When received by A.
A seller located in China makes an offer by mail for the sale of goods to a buyer located in the U.S. Assume the buyer promptly mailed an acceptance to the seller and that both parties are merchants. When would the contract be formed?
When the acceptance is received.
Which one of the following statements best describes the earliest time an offeror's written revocation of an offer will take effect under the majority rule?
When the revocation is received by the offeree.
In which of the following situations would a statement of opinion be least likely to establish the defense of misrepresentation?
Where the representor is a lay person. (Section 9.17 HB)
Retailer placed a notice in a trade journal stating that it had men shoes in various sizes available for sale at a price of $75 per pair. When Customer went to Retailer's store to purchase a pair of men's shoes at the advertised price, Retailer refused to sell Customer the shoes for $75. If Customer brings an action in court, which of the factors listed below will the court LEAST LIKELY consider as important when determining whether Retailer's notice in the trade journal constitutes a valid offer?
Whether Retailer intended the notice to be an offer to sell shoes to Customer.
A contract is called a "hybrid" contract if it involves the sale of both goods and services. What is the most accurate statement regarding the test most courts will apply to determine whether UCC Article 2 or the common law should apply to a "hybrid" contract?
Whether the contract's predominant factor--the thrust, the purpose, reasonably stated--is the rendition of service, with good incidentally involved; or is a transaction of sale, with labor incidentally involved.
Each provision of the Uniform Commercial Code is followed by official comments. What is the legal effect of the official comments?
While most states have enacted into law the provisions of the UCC, most have not enacted into law the official comments.
A says to B, "If you promise to paint my house, I promise to pay you $1500." B starts to paint in A's presence. Is there a contract?
Yes, because B's conduct constitutes an implied promise to paint A's house.
Marta read this statement on Developer's website: "Condominiums available for $120,000. First come, first served. Appear in person at our office, complete our application, and tender 10% down payment." The website included the physical location of the condominium and the unit numbers of the condominiums that were available. Marta went to Developer's office, completed the application and tendered $12,000 in cash that was accepted by Developer. A few days later, Developer mailed Marta a letter informing her that her application had been rejected. Enclosed with the letter was a cashier's check for $12,000. At trial, Marta proved that Developer had units available for sale, but only sold to prominent people who would endorse Developer's projects. Can Marta prevail on a claim for breach of contract?
Yes, because Developer accepted Marta's offer to purchase the condominium according to the terms stated on Developer's website
Marie read the following statement in a Stargell's catalog: "Lots available for $20,000. First come, first served. Appear in person, complete application and tender funds." The catalog also stated the physical location of the real estate. Marie went to the physical location, completed the application and tendered $20,000 in cash that was accepted by Stargell. Subsequently, Stargell mailed Marie a cashier's check for $20,000 with a note stating that Marie's application was "rejected." At trial, Marie proved that Stargell's had lots available, but only sold to prominent people who endorse Stargell's company. Does Marie prevail on a claim for breach of contract?
Yes, because Stargell accepted Marie's offer to purchase the lot according to the terms expressed in Stargell's catalog.
Widget Company manufactures widgets and had a number of clients who sold products to consumers. Widget wanted to compete with some of its clients, but believed that its clients would be displeased and might cease doing business with Widget. In order to keep this new business activity secret, Widget set up a subsidiary company to distribute its products and formalized its agreement with Paul in writing, which stated that Paul agreed to purchase all shares of the subsidiary for $10,000 and Widget agreed to sell the shares at that price. Widget and Paul had an oral, side agreement that the stock purchase agreement would not be carried out. The parties carried on business for many years without a transfer of the shares or payment of the money. For all appearances, Paul was the sole owner of the distribution business. However, Paul always acted as a loyal employee of Widget. Widget decided to end its arrangement with Paul and to let it be known to the trade that it was operating the distribution business. Paul tendered $10,000 to Widget and demanded that Widget transfer the shares of stock pursuant to the written agreement. Widget refused and sued Paul for a declaratory judgment to the effect that the written agreement is not binding. Will Widget succeed?
Yes, because Widget and Paul never intended to enter into an agreement.
Alec wants to sell some china to Ben, but he knows that Ben often does not pay his bills. Cecil, Ben's wealthy brother, tells Alec that he (Cecil) promises to pay if Alec promises to deliver the china to Ben. Alec agrees, but later fails to deliver the china. Ben sues Alec. Is Alec's promise to deliver the china supported by consideration?
Yes, because legal detriment may be given by someone other than the promisee.
Benson owned a golf course. Benson was approached by the Magson Railroad Company, that asked for a right of way across Benson's land that was adjacent to his golf course. Benson agreed to the right of way in exchange for the railroad's promise to build "a really cool railway station" at a specified spot near the golf course. The railroad was built on the right of way, but Magson did not build the station. Benson sues Magson for the station. Will Benson prevail in this lawsuit?
Yes, because the parties agreed that Magson would build a station near the golf course in exchange for the right of way.
In most modern jurisdictions is a contract whereby the parties promise to negotiate an agreement enforceable?
Yes, because the parties would be obligated to negotiate in good faith.
A pays B $100 in exchange for B's promise to keep his offer to provide childcare open for six months. Can A enforce B's promise to keep the childcare offer open for six months?
Yes, because there is consideration to support B's promise.
A offers to sell her car to B for $10,000, and promises to keep the offer open for the entire weekend. If on Saturday morning, C offers A $11,000 for the car, may A revoke her offer to B and sell the car to C?
Yes, because there was no consideration or substitute for consideration supporting her promise to keep the offer open for the weekend.
Devlon owned a house that he rented to Paula. Paula was a rowdy sort and continually hosted loud parties, disrupting the neighborhood, all in violation of the lease. Rather than fight Paula in court to get him to leave, Devlon offered to pay Paula's moving expenses if Paula would vacate the premises peacefully and relocate outside of his neighborhood. Paula agreed. Was Devlon's promise to pay Paula's moving expenses supported by consideration?
Yes, if either of the two promises made by Paula is valid and enforceable.
A agrees to remodel B's home pursuant to specific plans and specifications. The price for the job is $8,500. The plans do not specify the materials that A must use. Is the contract void?
Yes, if the omission of the terms describing the materials to be used cannot be implied due to lack of objective standards.
If Bob and Sally are friends and Sally promised to sell her television to Bob for $50 where the actual value of the television is $1,000, is there proper consideration to support Sally's promise?
Yes, if there is a bargained-for exchange in their agreement.
An offeree responds to an offer with a proposal for a similar but different contract, but also notes that the offeree will keep the original offer under advisement. Offeree's proposal is best understood as:
a counter offer.
A submits an offer in writing to provide B with a service. B quickly responds in writing stating that she accepts the offer, but includes somewhat different terms. Most likely B's response is:
a counteroffer and rejection of the offer.
A makes an offer by mail to B. B sends a rejection by mail, but before A receives it, B sends an acceptance. A receives B's rejection before receiving B's acceptance. Under the Restatement view there is:
a rejection of the offer when the rejection was received.
A contract in which one or more of the parties has the power to terminate the legal relations created by the contract is best referred to as:
a voidable contract.
A submitted an offer in writing to provide B with goods. B quickly responded in writing stating that she accepted A's offer, but B's written response includes some additional terms. A court will most likely find that B's response is
an acceptance.
How can an offer to buy goods be effectively accepted?
by either a shipment of conforming or non-conforming goods or a promise to ship the goods.
For public offers and rewards, the offer:
can be accepted by the means specified in the offer.
The power of acceptance:
can be exercised only with knowledge of the offer.
Indefinite contract terms:
can in some instances be understood by applying the duty to perform with reasonable effort and in good faith.
When you begin performance to accept a unilateral contract, under Petterson v. Pattberg the offeror:
can revoke the offer at any time prior to the completion of performance.
When you begin performance to accept a unilateral contract, under Motel Services, Inc. v. Central Maine Power Co. the offeror:
cannot alter the terms of the offer.
The determination of what constitutes wrongful prevention:
does not depend on a mechanical rule.
Under UCC 2-209, a merchant may supply a form which requires modification or rescission be in a signed record. Which of the following is a true statement where the contract containing that clause is contained a contract between a merchant and a non-merchant?
he clause must be separately signed by the non-merchant, otherwise the clause is ineffective.
Modification of an enforceable agreement requires new consideration
if the contract is governed by the common law.
An illusory promise:
is unenforceable.
When you begin performance to accept a unilateral contract, under Brackenbury v. Hodgkin the offeror:
must hold the offer open for a reasonable period of time to allow you to complete performance.
Pearl has lost her prize-winning cat, Mr. Whiskers. On the website where she chronicles the competitions in which she enters Mr. Whiskers, Pearl offers a $2,000 reward for the return of her beloved cat, which (elsewhere on the website) she claims is worth at least $10,000. When Diego returns the cat, Pearl refuses to pay. When Diego sues to recover the $2,000, it is most likely that Diego will:
prevail, if a reasonable person would conclude from the statement on Pearl's website that she intended to enter into a contract.
A Dead Man's Statute:
prevents testimony about acts or conversations of the decedent.
Under the traditional rule, an employee who has an employment-at-will contract may be terminated "for good cause, for no cause or even for cause morally wrong." Today, many jurisdictions:
protect at-will employees from no cause termination only if terminated for reasons that are contrary to public policy.
Where there is no language in a contract addressing duration, the contract will:
run for a reasonable time.
If two parties have entered into a contract for the sale of goods that is complete in all material respects but lacks any express language identifying the time and place of payment, a court would likely rule that the gap:
should be filled with a gap-filler provision of the UCC.
Where a court must gap-fill a term not articulated in the UCC:
the court should take into account (in this order) the intention of the parties, the nature and purpose of the contract, good faith and fair dealing, and reasonableness.
All of the following statements are correct regarding election except: A) it is the excuse of the condition after the condition has failed, but the other party chooses to excuse the failure. B) under the majority view, an election can always be withdrawn. C) it may be made by express promise or by conduct. D) acceptance of a defective performance usually constitutes an election.
under the majority view, an election can always be withdrawn.
Under the UCC, the question of whether the parties intended to contract:
will ordinarily be a question of fact.
