Contracts midterm

Pillock offers to sell five of his barns to Bollocks for $1000 each. Bollocks sends Pillocka check for $1000 as down-payment, which Pillock deposits under his endorsement.Bollocks orally agrees with Wally to sell her the barns for a total of $10,000. Pillocksells the barns to Wally for $10,000, and returns the $1000 deposit check to Bollocks.Bollocks sues. A. Bollocks will prevail under contract. B. Bollocks will prevail under promissory estoppel. C. Bollocks will prevail under restitution. D. Pillock will prevail.

A. Bollocks has a contract with Pillock under 2-201(1) written memorandum, andunder sub-(3) part performance. There is no reliance, and no unjust enrichment. Thus, Ais correct.

Around the same time it entered into its contract to supply bH to Beats, GenX enteredinto a contract to purchase all of the hypobutatetridiene (hB) it needed for the Waco plantfrom Bada-Bing Chemicals in nearby Fulbright, Texas. Hypobutatetridiene is a chemicalfeedstock that evaporates rapidly during transport. As a consequence, GenX and otherproducers of bH and other refined chemicals that require hB as a feedstock either mustorder substantially more hB than they actually need, to account for evaporation, or mustfind a supplier of hB located near them. The cost of purchasing hB from Bada-Bing andshipping it to any of GenX's existing bH plants (the nearest of which to Fulbright is inCameron, Louisiana) is too high to be economically feasible, even with bH selling for$10.00 per gallon.If GenX decided to delay construction of the Waco plant or to let it sit idle, until themarket price of bH fell to a level that made the Beats contract economically sound forGenX, would that decision have violated any actual or implied term of its contract withBada-Bing? A. No, because GenX did not promise to purchase any hB from Bada-Bing; it onlypromised to purchase whatever hB it required for its Waco pla

Answer D is the best answer for essentially the same reasons discussed in theabove. Just as UCC 2-306(2) imposes a duty on an output seller to use best efforts toproduce a commercially reasonable quantity of the goods it has promised to sell to itsexclusive buyer, UCC 2-306(2) imposes a duty on a requirements buyer to use bestefforts to require a commercially reasonable quantity of the goods it has promised topurchase from its exclusive seller.

GenX Chemicals ("GenX") operates a number of chemical refineries along the Texas andLouisiana Gulf Coasts. Wanting to expand its operations in Texas, in January 2003GenX entered into a long-term contract to supply benthahexelene ("bH"), a chemicalpreservative used in hot dogs, sausages, and other packaged meat products, to BeatsMeats, a major packaged-meat producer based in Texas. The contract provided thatBeats would purchase as much bH as GenX's planned Waco, Texas, plant could produce,up to 100,000 gallons per month, at $5.00 per gallon for the first 50,000 gallons permonth, with the per-gallon price decreasing to $4.00 per gallon for the next 20,000gallons, $3.50 per gallon for the next 15,000 gallons, and $3.00 per gallon for the next15,000 gallons. If GenX was able to produce more than 100,000 gallons of bH in a givenmonth, the contract gave Beats a right of first refusal to purchase as much of theadditional output as it wanted for $3.00 per gallon. GenX and its design engineers,Falconer, estimated it would take six to eight months to build the new plant and make itoperational, so Beats's contract with GenX provided that Beats's obligation to purchase,and GenX's obligation to sell,

Answer D is the best answer. As does the common law, UCC Article 2 imposes aduty on a party who promises to deal exclusively in goods to use "best efforts" to supplythem or require them, as the case may be. UCC 2-306(2). Section 2-306(1) goes further,requiring that GenX produce quantities of benthahexelene not "unreasonablydisproportionate to any stated estimate or...any normal or otherwise comparable prioroutput..." Note that GenX's contract with Beats contains no stated estimate and becausethis is a new plant with no prior output against which to measure what is "normal"; assuch, it would not seem unreasonable to expect that GenX's output would not be"unreasonably disproportionate" to the minimum quantity specified in the pricingstructure: 50,000 gallons per month (i.e. as the "actual quantity" subject to the "goodfaith" test).Answers A and B are incorrect because they ignore the implied duty of best efforts.Answer C is not the best answer because, while factually correct, improving GenX's bottom line is not a sufficiently compelling reason for it to avoid, in good faith, itscontractual obligations to Beats.

Returning to the above facts in Question 15, suppose that, instead of offering to employHande for two years, Elliot offered to employ Hande "for two years or until she dies,becomes disabled, or voluntarily retires, whichever transpires first."Assuming that Portia's and Hande formed a contract supported by consideration, wouldthat contract satisfy the relevant statute of frauds? A. No, because it was a contract for services to be performed over a two-year period. B. No, because the contract gave Hande the option to terminate the contract early byvoluntarily retiring; therefore, it was illusory and unenforceable. C. Yes, but only if Hande died, became disabled, or voluntarily retired during herfirst year of employment. D. Yes, because Hande could fully perform the contract in one year or less.

Answer D is the best answer. While it is true that Hande could have fullyperformed this contract by working for two years, it is also true that Hande could havefully performed by dying, becoming disabled, or voluntarily retiring prior to thecommencement of the contract's second year. Because the contract provides that itwould terminate when the first of these events occurred, it could be fully performed in less than one year. As such, R2 110(1)(e) does not require a signed writing to evidencethe contract. Therefore, answer D is correct and answer A is incorrect.Answers B and C are incorrect for the same reasons discussed in the answer to Qu

Suppose GenX's complaint was not that B&S used Osaka-grade steel manufactured bysomeone other than Osaka Steel Corporation; rather, it was that the steel B&S used wasnot Osaka-grade steel. Reasonably convinced by Falconer's analysis of the steel it usedon the GenX project, B&S sued Balls of Steel for selling it inferior steel. The writtencontract between B&S and Balls of Steel is silent about whether the steel B&S purchasedfrom Balls of Steel was "Osaka steel." Moreover, the contract contained a merger clausedisclaiming the legal effect of any prior representations, negotiations, or agreements.B&S insists that the Balls of Steel sales representative repeatedly assured B&S that it wasbuying "Osaka steel," despite the fact that the salesperson must have known that the steelBalls of Steel was selling B&S was not "Osaka steel."Should the trial court in B&S v. Balls of Steel consider B&S's testimony regarding therepresentations Balls of Steel's salesperson made, despite the fact that thoserepresentations were not repeated in or incorporated by the written contract between B&Sand Balls of Steel? A. No, because the written contract, which B&S signed, expressly disavows,inter alia, any prior sta

D is the best answer. The exceptions to the common law parol evidence rule - e.g.fraud, mistake, error - are equally applicable to the Article 2 parol evidence rule.Answer C reaches the correct conclusion but by the wrong means: a term relating to thenature of the steel Balls of Steel was selling B&S would not satisfy the test for"consistent additional term" in UCC 2-202 cmt 3.

1.Xena (X) is a young woman living in Ohio. Recently she wrote the following email to her cousin Yancey (Y), an Indiana resident: Dear Y: After some consideration, I've decided that I need to sell the antique roll-top desk that our grandfather left to me. I need the money, and it takes up a lot of space in my small house. I know you've always admired it, so I thought I would give you a chance to buy it before I put it up for sale on Craigslist. I had it appraised not long ago, and I was told that it's worth at least $15,000. I'd certainly sell it for that, or you could make me an offer. I need to hear from you by the end of the week, if possible. - Fondly, your cousin X. Has X made an offer to Y?

1.Yes, X has made an offer to Y. She identified the subject matter - a particular desk, probably known to Y (the next question confirms this)—and the price ($15,000). She expressed a willingness to commit herself to this bargain ("I'd certainly sell it for [$15,000] . . ."). The time and method of delivery and payment could have been stated also, but failure to include all possible terms does not prevent a communication from being complete enough to be legally an offer. She indicated a (somewhat soft?) time limit for acceptance. The fact that the parties are related does not keep her note from being an offer for an exchange. The fact that neither of them is (so far as we know) a "merchant" does not mean that the Uniform Commercial Code will not apply; it is still a sale of goods. However, the UCC does not have its own definition of "offer," so the common law rules will still apply. Also, the fact that X indicated willingness to entertain a lower offer from Y does not negate her expression of willingness to sell for $15,000; it simply reflects her understanding that the price she set may be too high for Y to accept her offer.

2.Y responds to X's note the next day, with the following note: Dear X: Thanks for thinking of me. I'd certainly love to own Grandpa's desk, but $15K is pretty high for me. I guess I can go up to $12K. Would you take that for it? - Y Given the facts of Questions 1 and 2, which of the following statements is/are potentially accurate? A. If X's communication was not an offer, Y's response is an offer. B. If X's communication was an offer, Y's response is a counter-offer. C. If X's communication was an offer, Y's response necessarily acts as a rejection of that offer.

2.A and B. Y's communication, like X's earlier one, has enough detail, and evidences a possible willingness to commit to a purchase at the price of $12,000. Y's intent is not as clear as X's was, however, as Y says only "I guess I can go up to . . ." the lower price. And Y follows that with an inquiry "Would you take that for it?" which again is somewhat equivocal. So this note could be an offer, but this is less certain than was the answer to Question 1. Even if X's original note was not an offer, however, Y's response to it might still be characterized as one (Answer A). If X's note was an offer, then if Y's response is an "offer" at all, it will also be a "counter-offer" (Answer B). The outcome in Question C could be a possibility also, because a counter-offer is ordinarily treated as a rejection, terminating the counter-offeror's power to accept the original offer. On these facts this is not a necessary outcome, however, because the counter-offeror seems to be indicating a possible continuing interest in the original offer, not actually rejecting it: He doesn't flatly reject buying for $15,000 ("pretty high for me . . .") and he seems to suggest an ongoing negotiation ("would you take . . .?").

Adam agrees with his divorced wife Betsy, and with Carlton, the Trustee, to pay to Carlton $12,000 each year for the benefit of Duncan, the 10-year-old son of Adam and Betsy, until Duncan enters college. The agreement also calls for Adam to pay Carlton $22,000 each year for the period of Duncan's higher education, but payments must not extend "for more than four years." At age 19, Duncan completes high school, but instead of attending college he is inducted into the army. Adam stops making payments to Carlton, and Betsy sues for continued payments to the Trustee on the basis that "until Duncan enters college" means literally that. If the court determines that the contract's "principal purpose" (applying a maxim of interpretation under R2 202(1)) is "to provide for Duncan's maintenance and education," who will most likely prevail? A. Adam, since both parties knew of each other's interpretation of the term "until Duncan enters college," and his is the more reasonable or objective. B. Betsy, since both parties had reason to know of each other's interpretation of the term "until Duncan enters college," and hers is the more reasonable or objective. C. Adam, but only if the court has adopted

A is correct. If the court has determined that the principal purpose is the maintenance and education of Duncan, then paying the Trustee either the maintenance fee ($12,000 per annum) or the education fee ($22,000 per annum not to extend beyond four years) during his service in the army would defeat the contract's purpose. As such, Adam's interpretation is more reasonable, at least according to this court. The court's resort to maxims, as reflected in the call of the question and in Choices A and B, suggests that the court has determined that the parties' minds have not met as to this term, and that the term is immaterial and partly (or fully) performed (Betsy does not seem to be claiming education payments). Whereupon the court resolves the ambiguity with a maxim, or "canon of construction." Choices C and D are not relevant at this point, and the inclusion of the word "only" is the giveaway.

In February 2021, Jim, the owner of a janitorial company, contacted Ann, the owner of an accounting business, about Ann taking over the billing process for Jim. After negotiating for a month in person and by email, Jim and Ann both signed a two-page contract on March 24 that provided Anne would "receive billing invoices on Friday of each week for customers served by Jim's Janitorial Service that week and will mail bills to customers on Wednesdays." The contract was to last for one year from April 1, 2021. The contract also included a statement that "this writing contains the entire agreement of the parties." In August, Jim discovered that Ann was not sending out bills to customers each week, but instead was sending out bills every two weeks. Jim asked Ann about this practice. Ann responded she was only required to send out bills by Wednesday during weeks that she did mailings, but she was not required to send bills every week. She stated her staff had calculated that it was more efficient to do mailings every other week. Jim has an email from Ann on March 3, 2021, in which she stated, "I will collect your service invoices each Friday and send bills the following week." Would Jim be likel

A is the correct answer. The email would be relevant negotiating history and should be admissible to explain a term in the written contract under both textualism and contextualism. Jim would argue that he shared a mutual understanding with Ann that bills would be mailed each Wednesday and that the ultimate goal of contract interpretation is to determine the shared intent of the parties. B is incorrect because the contract is facially ambiguous. Answer C is incorrect because extrinsic evidence submitted for purposes of interpretation is not barred by the parol evidence rule. The parol evidence rule only restricts evidence that is offered to contradict or add to an integrated agreement. Answer D is incorrect because a party cannot unilaterally deviate from contract terms simply because they believe an alternative performance would be better. (Contract modification will be discussed in Chapter 8 and breach of contract will be discussed in Chapter 10.)

In 1992, Aardvark Freezers, a wholesale outfit, contracted with Bensahib Maid, an ice-cream manufacturer, to buy quantities of ice-cream on a monthly bases "as needed." Thetwo companies had an informal and comfortable approach to the business, and themanagement teams were bowling buddies. During the boom years of the 1990s,Aardvark's relationship with Bensahib flourished. But as the years grew leaner, the priceof milk and other products used in the manufacture of ice-cream shot up, and Bensahibfound it increasingly difficult to meet the continuing demands of its customers. Bensahibdecided to assign the rights under its contract with several wholesalers, Aardvarkincluded, to MegaMouth Inc., whose management team was notorious for its rigidlyformal but highly efficient approach to the manufacture and sale of ice-cream. Aardvarkchafed under the new relationship for a month, and then sued on the theory that arequirements contract was analogous to a personal services contract, and thus assignmentwas presumptively ineffective. What are its chances? A. A court will likely find in favor of the obligor on the presumptivenonassignability of requirements contracts. B. A court will likely find in fa

A is wrong because this presumption has been overruled since 1925. C iswrong because this is not the end of the inquiry or test, i.e. material discretion and"substantial interests" may still be important enough to invalidate an assignment eventhough the presumption is in favor of enforcement. See Sally Beauty. D is wrong for thesame reasons.

.After receiving Y's note on Friday, X answers the same day: Dear Y: Sorry, but I can't go as low as that. I know it's worth at least $15K, and I might be able to get even more. - X After thinking it over for a few days, Y responds to X on Monday with the following note: Dear X: It's a stretch for me, but I hate to see Grandpa's desk leave the family. I'll meet your price of $15K. Let me know when I can come to pick it up. - Y Assuming the facts of Questions 1, 2, and 3, which of the following statements is/are potentially accurate? A.Y's last note to X is an acceptance of X's original offer. B.Y's last note to X is not an acceptance of X's original offer, because that was terminated by an earlier rejection. C.Y's last note to X is not an effective acceptance of X's original offer, because it was not communicated in time to be effective. D.Y's last note to X is an offer which Y is free to accept or reject.

All four answers are potentially accurate, depending on the way various issues are resolved. Answer B could be correct, if—as indicated might be the case in the answer to Question 2—Y's first response is treated as a counter-offer and also as a rejection. Answer C could be correct if X's original reference to a response "by the end of the week" is treated as a firm deadline for acceptance, rather than merely a request for a reasonably prompt reply (". . . if possible"). Answer D could be correct if X's last note is interpreted as generally a revival of her earlier offer but without any particular firm deadline. ("I can't go as low as that" might imply a willingness to continue negotiation over her original price.) And Answer A also could be correct if outcomes B and C are both incorrect (not a clear rejection; not a firm deadline).

During the December pre-holiday sales period, Donaldson's Department Store (DDS) had a prominent sign in its window: Enter now to win a new Mustang!! Put your name in the box at the customer service counter on the fourth floor of our store. Drawing to be held Jan 2. Not necessary to be present to win. Don't miss this fabulous once-in-a-lifetime opportunity!! While doing her holiday shopping at DDS, Ashley Andrews filled out one of the blank cards provided and dropped it in the box in the DDS store. On Jan. 2, one of the store employees pulled Ashley's card from the box. The store notified her of that fact, but when she came to claim her prize of a new Ford Mustang automobile, she was given a plastic model of that car. She promptly complained to the manager, who told her that the holiday sales at DDS had been too disappointing to justify awarding her an automobile. Does Ashley have a valid claim against DDS for a new Mustang (or its value)? A. Yes, because the store's promise was supported by consideration and Ashley reasonably expected to receive an automobile if her name was drawn. B. No, because the store got no consideration for its promise. C. No, because the store's statement wa

Answer A is probably correct; B and C are both probably wrong. As for Answer B, the store's posted sign indicates that to be entered to win the prize, one must go to the customer service counter on the store's fourth floor. This could be merely a "condition" to the ability to enter (you have to go to the fourth floor only because that's where the box is). However, since going to the fourth floor means you have to enter and travel through the store itself, and given that getting customers inside the store is potentially a benefit to DDS, there should be little difficulty in treating this as consideration for the store's promise. Clearly the store's motive in making this offer is commercial gain; it's not just to give something away. Answer C is somewhat more likely than B. The store should be bound if Ashley both honestly and reasonably believed that the sign actually referred to a real, full-size Ford automobile, rather than just a plastic model of one. The first of those is a question of fact specific to Ashley (did she in fact honestly believe that?) and the second is a more general question—could a reasonable customer of the store have interpreted the sign that way? Answer A does seem to be the most likely outcome, if not an inevitable one.

Does Lefkowitz have a viable claim against Ali' estate for the expenses he incurred inseeing to Wally's care after Ali promised to reimburse him? A. Yes, based on promissory estoppel. B. Yes, based on promissory restitution. C. Yes, based on Restatement of Restitution §116. D. Yes, based on breach of contract.

Answer A is the best answer, unless Lefkowitz can prove breach ofcontract, in which case Answer D is the best answer. Lefkowitz clearly has a promissoryestoppel claim for post-visit expenses because he agreed to continue to pay for Wally'scare only after Ari promised to reimburse him. Ari' promise clearly induced Lefkowitzto reasonably and foreseeably rely to his detriment, and Lefkowitz would suffer aninjustice if Ari were not held to his promise - unless Lefkowitz and Ari had anenforceable contract. If they did, then avoiding injustice would not require the court toenforce Ari' promise using the rubric of promissory estoppel. Lefkowitz could be madewhole by awarding him damages for breach of contract.Whether Lefkowitz and Ari had an enforceable contract is unclear because Ari' promisemight fall under the category of a contract "to answer for the duty of another" ["duty"understood as "debt, default, miscarriage"]; and, therefore, require a signed writing underR2 110(1)(b).

Robert the Bruce desired to insure the new concert hall he was building as part of hisresort in the Berkshires. Bruce contacted Sue Lee, the local agent for Gilded HandInsurance ("GHI"), to discuss terms and rates. Bruce and Lee settled on a three-yearpolicy with premium payments due in monthly installments. Lee submitted thepaperwork to the underwriting department in GHI's main office, along with Bruce'scheck for the first month's premium, Bruce's completed policy application, and a"binder" (a document temporarily evidencing insurance coverage until the policyholderreceives the actual policy from the insurer). Bruce signed all three of the foregoing, andLee signed the application and the binder. The binder accurately indicated coverage fromJuly 1, 2002 through June 30, 2005. A few weeks later, when Bruce received the multi-page policy, he simply filed it away.In August 2003, a fire broke out in one of the food service areas in the concert hall,causing significant fire, smoke, and water damage to the structure. When Bruce calledLee to report the incident, Lee took the relevant information over the phone and filed aclaim with GHI's claims department. A week or two later, Bruce received a

Answer A is the best answer. Ambiguity may be patent - appearing on the face ofthe contract - or latent - arising from words the meaning of which are uncertain whenapplied to the subject matter of the contract. Here, two different provisions on the face ofthe policy indicate coverage for one year and coverage for three years. Bruce need notproffer any extrinsic evidence to establish that the policy is ambiguous. It is faciallyambiguous

Whether and to what extent a writing is integrated and whether it is unambiguous are A. questions of fact, to be determined by the trial judge. B. questions of law, to be determined by the trial judge. C. questions of fact, to be determined by the jury. D. questions of law, to be determined by the jury

Answer B is the best answer. See R2 209(2). Answer A is not the bestanswer, tempting though it may be. Even though the trial judge will almost certainlyhave to consider facts in making her threshold determinations on the extent of integrationand the presence of ambiguity, her findings are treated as findings of law, rather thanfindings of fact. Therefore, A is inferior to B.Answers C and D are incorrect. If the trial judge decides, as a threshold matter, that awritten agreement is less-than-fully integrated or is not unambiguous, then the judge mayask the jury to find, as matters of fact, what additional terms the parties consented to, themeaning of any terms whose meanings the parties dispute, or both. However, until thetrial judge makes her threshold determinations on the extent of integration and thepresence of ambiguity, the jury is out of the equation.

A writing is ambiguous if A. one or more of its terms or provisions are susceptible to more than one reasonablemeaning based on the facts actually or constructively known by the parties whenthey executed the writing. B. one or more of its terms or provisions are susceptible to more than one reasonablemeaning based on the facts actually or constructively known by the parties whenthe court considers the writing. C. the parties disagreed about the meaning of a term or provision when theyexecuted the writing. D. the parties disagree about the meaning of a term or provision when a courtinterprets the writing.

Answer A is the best answer. An instrument is ambiguous if one or more terms orprovisions are susceptible to more than one reasonable meaning. Because, as discussed previously, the primary goal of construing and interpretingcontracts is to give effect to the objective intent of the parties when they entered into thecontract, the best time to test ambiguity is when the parties formed the contract. A strongargument may also be made for testing ambiguity when a party's performance is due.However, ambiguity that did not exist prior to the time of trial should not influence thetrial court. Thus, B is not the best answer.Mere disagreement between the parties about the meaning of a provision of a contract isnot enough to make the contract ambiguous. This is particularly true when thedisagreement arises at or after the time one party believes the other to be in breach.Therefore, D is incorrect.

Bill Bendix was a popular, 30-year old singer in local clubs in a small, Midwestern city. In June 2021, Bill decided that he wanted to perform nationally and he contacted Anne Adams, a talent agent with business connections in New York, Los Angeles, and other major cities. Anne agreed to help Bill with bookings but only if he would agree that she would be his exclusive agent for as long as he performed professionally and that she would receive a 10 percent fee for all bookings. Bill orally agreed. Anne then sent Bill her standard representation contract, but he never read or signed it. Nevertheless, Anne arranged an average of three bookings per month for Bill in major cities during the next two years and she received her 10 percent fee for each. In July 2023, Bill sang the national anthem on a televised baseball game to great acclaim and he was soon approached by Mega Artists, the top ranked talent agency in the country, which offered him an exclusive contract. Today, Bill comes to your law office and wants your opinion on whether the lack of a signed writing would give him a good defense to any lawsuit Anne might bring for breach of contract if he signs with Mega Artists. Assuming that

Answer A is the best answer. The majority and traditional view is that a contract of indefinite duration can be terminated at any time and thus fully performed in less than a year. Therefore, such contracts do not come within the one-year category of the statute of frauds. The agreement for Anne to serve as Bill's agent for as long as Bill performed professionally could have lasted less than a year because at any time Bill could have easily decided to discontinue his career. He also might at any time have been disabled from performing. Therefore, his oral promise need not be in writing to be enforceable. For similar reasons, Answer C would not be correct. The prevailing approach to the one-year category is that a contract falls outside of it even if performance lasts for more than a year if it could have been fully performed in less than a year. Answer B would not be correct because there is not any conduct that is tantamount to a signature under statute of frauds analysis. While the Restatement (Second) § 139 does protect reasonable reliance on an oral contract in some situations, it is not based on a theory that conduct is the equivalent to a signature. Answer D is not correct because Anne would be suing for compensation for future performances under an executory contract.

In construing and interpreting a written contract, a court's primary concern should be toascertain and give effect to A. the objective intent of the parties at the time of contracting, as expressed orapparent in their written agreement, in light of the circumstances surrounding itsformation. B. the subjective intent of the parties at the time of contracting, as expressed orapparent in their written agreement, in light of the circumstances surrounding itsformation. C. the objective intent of the parties at the time of contracting, whether or not it wasaccurately captured in their written agreement, in light of the circumstancessurrounding its formation. D. the subjective intent of the parties at the time of contracting, whether or not it wasaccurately captured in their written agreement, in light of the circumstancessurrounding its formation.

Answer A is the best answer. The primary goal of contract interpretationis to give effect to the parties' intent, manifested when they entered into the contract, inlight of the circumstances surrounding its formation. See KCP 350-352. A court mustgive effect to the objective intent of the parties, as it is expressed or apparent in writing,as opposed to the subjective intent of parties who failed to fully capture their intent whenthey wrote the contract in question. See R2 s200 cmt b.While subjective intent may be relevant when both parties share the same subjectiveintent, even though a disinterested third party might think they meant otherwise, see R2201(1), courts generally concern themselves with the parties' objective manifestations oftheir intent, rather than their hidden agendas. Therefore, neither answer B nor D is thebest answer. Answer C is not the best answer because, while parties can form many types of contracts without a writing, when the parties do commit some or all of the termsof their agreement to writing, a court should begin its analysis with the writing.

Returning to the facts of Question 8, suppose that Moses promised to will the chinchillaranch to Niles if Niles would promise to refrain from drinking, gambling, and speedingfor the rest of Moses's life. Niles replied that he promised to refrain from drinking,gambling, and speeding for the rest of Moses's life.Did Moses and Niles form a contract obligating Moses to amend his will to leave thechinchilla ranch to Niles? A. Yes, because Moses sought Niles's promise to refrain from drinking, gambling,and speeding in exchange for Moses's promise to will the chinchilla ranch toNiles. B. No, because Niles suffered no detriment from his promise to refrain fromdrinking, gambling, and speeding. C. No, because Moses realized no benefit from his promise to will the chinchillaranch to Niles. D. No, because Niles, who was a minor when he made his promise, had the legalright to avoid the contract, making his promise to Moses illusory.

Answer A is the correct answer. Unlike Question 8, where M sought N'sperformance, not his promise, this Question states that M sought N's promise to refrainfrom the specified vices. Therefore, M got exactly what he asked for, and N's promisewas the "bargained for" consideration for M's promise. R2 71

Your client Bob, a building contractor, makes many purchases through the exchange of emails. He wants to be able to avoid waiving any rights that he ordinarily would have for legal remedies for defective materials, especially if the defects are discovered only after the materials have been incorporated in a building project, because this could prove very costly for him to repair or replace. Typically, he attaches to every email order a set of his own "Terms and Conditions," which his email order refers to as follows: By accepting this order you are agreeing to the attached Terms and Conditions, which are part of every purchase contract we make. All inconsistent terms are hereby objected to. The following language appears in Bob's attached Terms and Conditions form: Buyer retains all rights under the Uniform Commercial Code to remedies for breach of contract or of warranty, including consequential damages. Bob has asked you if this language will protect against a seller's attempt (in "Terms and Conditions" of its own) to disclaim the warranties that would otherwise be implied by law, or to exclude consequential damages as a remedy. What would you tell him? A. The language will absolu

Answer B comes closest to being sound advice. This question invokes the UCC, and specifically § 2-207. If Bob signs onto a seller's form with disadvantageous terms, then for him the "battle of forms" is over, and he has surrendered. Section 2-207 has no work to do there. Answer C is misleading; if the seller has a strong form of its own and the seller's terms are additional to or different from the buyer's, then the likely outcome is that either the buyer's form prevails (because the seller's response is not considered to be an "expressly conditional acceptance" under § 2-207(1) and the seller's terms are deemed to be "material" changes under § 2-207(2)), or the forms cancel each other out, in which case under § 2-207(3) the terms "implied by law" would remain, and those include the remedies that Bob is trying to preserve. D simply describes the former common law rule, which § 2-207 is expressly designed to change. Answer A is too oversimplified to be good advice; even if it is generally accurate, there are too many exceptions and qualifications that it glosses over.

Justin Thyme, who collects Volkswagens as a hobby, made a "handshake deal" topurchase four 1966 Volkswagen Beetles for $5,000 each from Belinda Waring, whoowns Belinda's Car Aisle, a vintage Volkswagen dealership. Belinda and Justin agreethat Justin could pick up the cars at any time within 30 days of the sale. They also agreethat Justin would pay for each car when he picked it up from Belinda's lot.The day after Justin and Belinda made their deal, Belinda sent Justin a signed letterpurporting to confirm their oral agreement. Belinda's letter, however, described anagreement for the sale of two 1966 Volkswagen Beetles for $7,500 each. After receivingthe letter, Justin tried for two weeks to reach Belinda to clear up the matter, but she wasout of town on vacation. When Justin finally reached Belinda, Belinda insisted that theterms of the letter were the only ones on which she would perform - even though Justintold her that Justin's friend Magda, who accompanied him to Belinda's dealership the daythat Justin and Belinda made their oral agreement, overheard their agreement and wouldtestify that Belinda had agreed to sell Justin four 1966 Beetles for $5,000 each, not two1966 Beetles for $7,50

Answer B is the best answer because there is no writing that was intended by bothJustin and Belinda to be a final expression of their agreement, even with respect to the terms included therein. Belinda's confirmation was a writing, therefore A is incorrect,but there are no facts that suggest Justin intended Belinda's confirmation to be a finalexpression of Justin's agreement with respect to anything by Belinda's written"confirmation" due to his failure to timely object in writing to the terms thereof: thus Dis incorrect.Answer C raises an interesting point about the Article 2 PER: the text of 2-202 is silentregarding the effect of ambiguity. Nevertheless, C is preempted by B, which opens theflood gates to extrinsic evidence.

Ed Evans graduated from State College in May 2023 with a master's degree in computer science. On June 1, 2023, Ed participated in a job fair where he met Gina Givens, the owner of the Givens Greeting Card Company. Gina was very impressed by Ed and said she wanted to offer Ed a position in her company's technology department. Gina pulled from her brief case a blank piece of Givens stationery with the company logo and letterhead, and wrote on it, "Two-year position in IT, $75,000 per year salary, start date August 1, plus $5,000 moving allowance." Gina told Ed, "You will also get standard benefits." She gave the piece of paper to Ed who said he would think about the offer. Two days later, Ed called Gina and told her that he accepted the job offer and would see her August 1. Gina replied, "Great. See you in August." Ed stopped looking for work and took a month long vacation in Europe and Asia. On July 30, 2023, Gina sent an email message to Ed which said, "Due to some financial reversals here at the company, I am imposing a hiring freeze and backing out of our agreement for the two-year position. Maybe you can work for us at some other time. Best wishes, Gina." Which of the following statem

Answer B is the best answer. Answer B would likely be true in most jurisdictions because the writing contains sufficient terms and the presence of the letterhead would amount to a signature under the lenient view of that element in both the Restatement (Second) of Contracts and the UCC. Furthermore, Gina's email would arguably constitute an authenticated record under current law on electronic communications, as provided in the federal E-SIGN Act and the state law counterpart, the Uniform Electronic Transactions Act (UETA), and her email explicitly references the contract reflected by the terms in the written note. As in the Crabtree case, Ed p. 1164could argue that the two documents related to the same transaction make a strong case for a sufficient writing. Moreover, the email message concedes that a contract had been made while explaining a breach of it. For the foregoing reasons, Answer C would likely be incorrect; the writing and the email message would provide a strong case for satisfying the statute of frauds even without every detail of the contract being stated. Similarly, Answer D would be incorrect because a formal signature is not necessary to satisfy the requirement that a writing be "signed" by the party against whom enforcement is sought. Answer A would not be correct because the fact that a two-year contract might be breached in less than one year is not the same thing as full performance. Thus, the contract is not one that can be fully performed within one year from the date of making. See the Notes after Crabtree.

In a "four corners" jurisdiction, what evidence should the trial judge consider whendeciding whether a written agreement is fully integrated and unambiguous? A. Only the written agreement. B. The written agreement, plus any other documents incorporated therein byreference. C. The written agreement, plus any other documents incorporated therein byreference, as well as other documents that appear to relate to the agreement. D. The written agreement, plus any other documents incorporated therein byreference, as well as other documents that relate to the agreement, and anyevidence a party wishes to proffer regarding the circumstances surrounding thecontract's formation.

Answer B is the best answer. In a "four corners" jurisdiction (e.g., Mississippi;see also Sherrodd case), a trial judge should not look beyond the written agreement, andany other document incorporated therein by reference, until she has decided that thewritten agreement plus any documents incorporated therein by reference do not constitutethe entire agreement of the parties, are ambiguous as to one or more terms, or both.Answer A is not the best answer because it is underinclusive. Answers C and D are incorrect because they are overinclusive.

Suppose, instead, the insurance policy itself said that Bruce was covered "from July 1,2002 through June 30, 2003," but the application and binder that Bruce and Lee signed,and Lee submitted to GHI's underwriting department, showed Bruce being covered"from July 1, 2002 through June 30, 2005."Assuming Bruce could introduce the binder into evidence, which of the following bestdescribes the written policy's statement of the duration of Bruce's coverage? A. The policy is patently ambiguous. B. The policy is latently ambiguous. C. The policy is unambiguous. D. The policy is unintegrated.

Answer B is the best answer. Nothing in the facts suggests that the applicationand the binder were incorporated by reference into the insurance policy. Therefore, anyambiguity they introduce would be latent, rather than patent. Here, the face of the policyindicates coverage for one year. Bruce must proffer extrinsic evidence of three years'coverage to establish the ambiguity of the policy. Therefore, answer A is not the bestanswer.

Suppose that, after Glenn explained what had happened, Savage said he would payGlenn, Will, and Grace $50 each the next day. If, when they came to receive theirrewards, Savage refused to pay, would Glenn, Will, and Grace have a viable equitableclaim against Savage? A. Yes, Glenn, Will, and Grace could recover from Savage based on promissoryestoppel. B. Yes, Glenn, Will, and Grace could recover from Savage based on promissoryrestitution. C. Yes, Glenn, Will, and Grace could recover from Savage under Section 117 of theRestatement of Restitution. D. Yes, Glenn, Will, and Grace could recover from Savage based on quasi-contract.

Answer B is the best answer. Promissory restitution is embodied in R2 86,which provides that a promise, made in recognition of a benefit already received, isbinding to the extent necessary to prevent injustice, if (1) promisee did not render thebenefit as a give, (2) not enforcing the promise would unjustly enrich the promisor, and(3) the promise is not disproportionate to the benefit the promisor received.Savage made his promise after the fact. Therefore, G, W, and Grace could not haverelied on his promise in rescuing the boat, making Answer A incorrect. See above reRestatement 117. Also, this is not the type of case in which courts have implied a quasi-contract in order to keep Savage from being unjustly enriched. He was not, in fact,enriched. Instead, G, W, and Grace simply helped preserve the value of his property.Therefore, D is incorrect.

GenX Chemicals ("GenX") contracted with Falconer Engineers ("Falconer") to design anew chemical refinery and act as GenX's consultants during the refinery's construction.GenX hired Black and Soot ("B&S") to act as general contractor, overseeing constructionof the plant, and assuming primary responsibility to ensure that the plant was built toFalconer's precise specifications. Falconer's design included several multi-chamberedvessels used to distill chemical feedstock into various end-product chemicals. Falconerspecified that the exterior shell of each vessel be fabricated using "Osaka steel."Falconer's design also indicated that each chamber of each vessel was to be separated bya specific size and model number of bi-flow (two-way) valve manufactured byAccuValve, Inc.A series of disputes subsequently arose among GenX, Falconer, and B&S over variousaspects of the refinery's construction. B&S's contract with GenX required B&S tostrictly comply with Falconer's specifications and permitted B&S to deviate from thosespecifications only after obtaining a written "change order" signed by either Falconer orGenX. The final paragraph of B&S's contract with GenX stated:36B. This contract, including a

Answer B is the best answer. The fact that FALCONER, on behalf of GenX, sawit necessary to issue a change order amending the contract suggests that the writtencontract was not the full and final agreement of the parties with respect to the subjectmatter - i.e., B&S's construction of the refinery for GenX. The parties may haveintended the written contract to be the full and final agreement as of the date they signedit; but, by the time B&S' performance was due, the parties realized that the writtenagreement was not the full and final expression of their agreement. Thus, FALCONER,acting as GenX's agent, amended the original agreement.Answers A and C are both tempting, but they go more to the issue of ambiguity thanintegration.

Arlene posts this advertisement on a website that provides news and information to citizens of a certain city: "Leather handbag lost on downtown city bus; $100 reward for its return [address, telephone number, email address]." Jack lives in the city but has not seen Arlene's posting. Riding the downtown city bus, he finds the handbag. In it, he discovers a writing that shows Arlene's home address, to which he then travels. Finding no one at the home, he leaves the handbag in Arlene's mailbox. Is Jack entitled to the $100 reward? A. Yes, because the advertisement was an offer for a unilateral contract. B. Yes, because he lived in the city that the website targets. C. No, because he acted without knowledge of the advertisement. D. No, because he failed to deliver the handbag personally to Arlene.

Answer C is correct. The issue is mutual assent: whether a party must have knowledge of the offer to accept it. R2 50(1) states: "Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer." A person cannot manifest the intent necessary to accept an offer if he or she does not know that the offer exists. Also, the mere fact that this advertisement would be seen as an offer does not mean that the offer was accepted.

Suppose that, in addition to promising to refrain from drinking and gambling and to avoidspeeding tickets for the rest of Moses's life, Niles actually did as he promised for the restof Moses's life.Did Moses and Niles form a contract obligating Moses to amend his will to leave thechinchilla ranch to Niles? A. Yes, because Niles's refraining from activities that were not illegal, and in whichhe might otherwise have engaged, was a legal detriment to Niles. B. Yes, because Niles's promise to refrain from drinking, gambling, and speeding forthe rest of Moses's life was the consideration Moses sought in exchange for hispromise to will the chinchilla ranch to Niles. C. Yes, because Niles's refraining from drinking, gambling, and speeding for the restof Moses's life was the consideration Moses sought in exchange for his promiseto will the chinchilla ranch to Niles. D. No, because Moses did not benefit from Niles's refraining from drinking,gambling, and speeding for the rest of Moses's life.

Answer C is the best answer because N actually refrained from the specifiedvices for the remainder of M's life, which was what M bargained for. As discussed in theanswer to Q8, M did not ask N to promise to refrain from the specified vices for theremainder of M's life; M asked N to actually refrain from those vices. N's promise to doso was not consideration because M did not seek it in exchange for his promise to will thechinchilla ranch to N. See R2 71(2). Therefore, Answer B is incorrect.As discussed in the answer to Q7, the Restatement has replaced the old "benefit-detriment" test with the concept of "bargained for" consideration. Therefore, althoughthey state the old test correctly, unlike their counterpart in Question 7, answers A and Dare incorrect

Following Wally Wallace's meteoric rise up the charts in the spring of 2002, he signed amulti-album contract with Vista Records. Wally, who was only 17 years old at the time,did not bother shopping around for a better deal because Vista had a good reputationamong recording artists and it gave him a chance when other labels had not. Wally'scontract with Vista included promises (1) by Vista to promote Wally and his music "atsuch times and by such means as Vista, in the exercise of its professional judgment,deems appropriate," and (2) by Wally to record and perform solely for Vista. Thecontract provided that Vista would pay Wally $500,000 for signing the contract and$250,000 per album, plus a percentage of net revenues from all CD, album, and tapesales, and a percentage of net revenues from all non-charity performances. The contractgranted Vista a percentage of gross revenues from all of the foregoing, as well as finalauthority over whether a particular single or album would be released.The bloom was soon off the rose. Whilst Wally had a successful nationwide tour duringthe summer of 2002, he felt that Vista was booking him into too many small venues andtoo many small towns, when larger ven

Answer C is the best answer. A party granted an exclusive right, the exercise ofwhich will benefit another, impliedly promises to use "reasonable efforts" on the other'sbehalf. See Wood v. Lucy, Lady Duff-Gordon case (see also R2 s.77 cmt d & illus 9).Here, Wallace agreed to record and to perform exclusively for Vista, and Vista agreed topromote Wallace's music. When Chick Correa instructed Vista's staff to do nothing topromote Wallace - and, indeed, to try to convince radio stations to stop playing his music- Vista ceased using "reasonable efforts."

Carl decided to sell his classic car, a 1963 Chevy Corvette. He advertised in the newspaper and received a call from Donna. Donna went to Carl's house on Monday to look at the car and decided to offer Carl $125,000 for the Corvette, stating that she could pay $5,000 at that moment and that she would return with the balance on Tuesday and take possession of the car at that time. Carl agreed to that arrangement. Donna then wrote out and signed a personal check for $5,000, noting on the memo line "Deposit on 1963 Chevy Corvette." The next morning Donna called to say that she had changed her mind and would not be buying the car. On what basis is Carl likely to be able to enforce the contract against Donna without a written sales agreement? A. Carl can enforce the contract only if Donna admits in court that she agreed to buy the car. B. Carl can enforce the contract only if he promptly cashes the check. C. Carl can enforce the contract because the check is a sufficient writing. D. Carl can enforce the contract because the car is relatively unique.

Answer C is the best answer. As indicated in the Buffaloe decision, the UCC § 2-201(1) minimal writing requirement can be satisfied by a personal check, with a notation of the goods on the memo line, signed by the party against whom enforcement is sought. This outcome would be true even if the check is not cashed or payment is stopped by Donna. Thus, Answer B is not correct. It should be noted, however, that the part payment exception to the UCC statute of frauds under § 2-201(3)(c) would probably also apply to these facts. Similarly, Answer A is not correct because Carl does not need Donna to admit the making of the contract under § 2-201(3)(a) in order to enforce the contract. Answer D is not correct because uniqueness of the goods is the basis for an exception to the writing requirement only under the "specially manufactured goods" rule in UCC § 2-201(3)(a).

Suppose that there was also a dispute over what property and perils the policy covered.Bruce's insurance policy described the covered premises as:Business premises and other improvement to real property as more fully describedin "Attachment A" affixed hereto, as amended, at the time of the loss.The section of the policy entitled "Perils Insured Against" stated:This policy insures against physical loss to property described in the version of"Attachment A" in effect at the time of the loss caused by a peril listed below,unless the loss is excluded under the terms of the version of "Attachment B -Business Premises: Excluded Perils" in effect at the time of the loss.The policy also stated:Except as subsequently amended in a writing signed or otherwise endorsed byGHI, this policy constitutes the entire agreement of the parties hereto with respectto GHI's obligations in the event of any property loss suffered by the Insured.Which of the following best characterizes the policy's description of the coveredpremises and the excluded perils? A. The policy is fully integrated. B. The policy is only partially integrated, but it is integrated with respect to thecovered premises and excluded perils. C.

Answer C is the best answer. Because the policy refers to the versions ofAttachments A and B in effect at the time of the loss, there was no way for Bruce to tell,either when he entered into his contract with GHI (most likely, when Lee issued thebinder) or when he first received the policy, what property was covered and what perilswere excluded because he did not know when a loss would occur.Answer A is incorrect because the policy refers on its face to documents that may not bein existence when the policy was issued. Answer D is incorrect because at least one ofthe terms of the policy is final: the Insured's identity. Therefore, the policy is not whollyunintegrated. Answer B is trickier. If neither Attachment A nor Attachment B changed in any respectfrom when Bruce received his policy and when a loss occurred, if ever, GHI could makea colorable argument that the policy was integrated with respect to covered premises andexcluded perils. However, the policy makes it clear that Attachment A and Attachment Bcould change after Bruce received his policy and before a loss occurred. Perhaps a betterargument for GHI is that the policy is integrated with respect to those premises coveredin the original Attachment A that remained covered at all relevant times and those perilsexcluded in the original Attachment B that remained excluded at all relevant times, butnot integrated with respect to additional premises or additional perils. Still, for as long asGHI reserved the right to modify the premises covered or the perils excluded, B is not thebest answer.

Suppose that, after receiving the teaching offer from BTC (see question 46), Cain spokewith David Ahmed, a colleague of his, about taking over the responsibility of tutoringand consulting with Niles. Ahmed was intrigued, and agreed to assume Cain's dutiesunder the contract between Cain and Moses. Assume that Niles and Moses were boundto accept Cain's delegation to Ahmed or that, even though they were not so bound, theyconsented to the delegation.If Ahmed failed to perform adequately, who could Niles and Moses sue for breach? A. Only Ahmed, because they accepted or were otherwise bound by Cain'sdelegation. B. Only Cain, because he repudiated his duty to perform for Niles's benefit, and hisdecision to let Ahmed perform for him did not relieve Cain of liability for hisrepudiation. C. Either Ahmed or Cain (or both), because Cain's delegation to Ahmed did notrelieve Cain of liability, but Ahmed's acceptance of Cain's delegation subjectedAhmed to liability, as well. D. Neither Ahmed nor Cain, because only Cain was liable on the contract and hisliability was discharged by the impracticability of simultaneously performing hisduties to Niles and his duties at BTC.

Answer C is the best answer. If the delegation was enforceable, Niles and Mosesmust have accepted Ahmed's performance. But if Ahmed failed to perform adequately,Cain remained liable for Ahmed' breach: see R2 318 cmt d & illus. 10.

Horst Glenn and Sav Savage own adjoining lots along the Willamette River in Oregon.One day, while sitting on his boat dock, Glenn noticed that one of Savage's boats hadbroken loose from its moorings and was floating away down the river toward a set ofrapids that would eventually propel it beyond rescue. Glenn called out to his friends,Will and Grace, to grab some rope and a gaffing hook and hop into his spare canoe tohelp him retrieve the stray boat. An hour or so later, Savage, who had been to town tobuy provisions, returned just as Glenn, Will, and Grace were re-securing Savage's boatand the two canoes. Glenn explained what had happened and Savage thanked the three ofthem profusely for rescuing his too-expensive-to-be-so-poorly-secured boat.Assuming that Savage did not offer to reward them for their efforts, would Glenn, Will,and Grace have a viable equitable claim against Savage? A. Yes, because Glenn and his pals acted without Savage's permission out ofnecessity and had no reason to believe that Savage would not consent if asked. B. Yes, because Glenn and his pals acted lawfully and without owing Savage anypre-existing duty as a result of their relationship to him or their own acts o

Answer C is the best answer. Restatement of Restitution s117 wouldafford Glenn and his mates a claim against Savage if (1) they acted lawfully and withoutowing Savage any pre-existing duty as a result of their relationship to him or their ownacts or omissions; (2) they acted without Savage's permission out of necessity; (3) theyhad no reason to believe that Savage would not consent if asked; (4) they intended to becompensated for their efforts; and (5) Savage accepted the boat when they returned it tohim. The sticking point here is that there is nothing to suggest that Glenn, Will, andGrace had money on their minds when they went after Savage's boat. Like goodSamaritans who stop to aid fellow motorists in distress, they acted gratuitously and hadno reliance interest to protect. Answers A, B, and D, whilst all true, are insufficient toafford Glenn, Will, and Grace a claim against Savage.

Shortly after Beautiful confirmed receipt of SD's fax and its terms, Beautiful contractedwith several landscaping clients who had expressed their desire to include junipersaplings in their landscaping. One client, Cindy Lauper, had recently bought a home andwanted to completely re-landscape the backyard. She paid Beautiful $2,500 to prepare acomprehensive landscape plan for her backyard; and, after approving the plan, she paidBeautiful to remove most of the existing landscaping (such as it was), re-contour the soil,build several flower beds, install an irrigation system, install curbing and stepping stones,plant new grass, flowers, shrubs, and trees (including several of the juniper saplingsBeautiful was purchasing from Sumptuous), and pour foundation for and construct agazebo in her backyard. The cost of the backyard makeover, above and beyond the feefor preparing the plan, was $10,000, of which $2,500 was for materials and $7,500 forlabor.If a dispute subsequently arose between Cindy and Beautiful over Beautiful'sworkmanship in building Cindy's gazebo (for which BEAUTIFUL charged Cindy $350for materials and $650 for labor), what body of law would most likely govern theirdispute? A. Art

Answer C is the best answer. The mere fact that Cindy was purchasing goods as part of the contract is not, in and of itself, sufficient to invoke Article 2, provided that the contract also involved the purchase of non-goods. Thus, Answer A isincorrect.The fact that the goods Cindy was purchasing would become sufficiently attached to realproperty to become "fixtures" does not keep them from being treated as goods forpurposes of deciding whether Article 2 governs the transaction. See UCC 2-105(1)(defining "goods" based on their function "at the time of identification to the contract forsale"). Thus, answer D is incorrect.The choice between answers B and C boils down to whether the contract was for the saleof goods or for services. The "majority" rule, when courts have been faced with thisissue, is the "predominant purpose" test, which asks whether the plaintiff's predominantpurpose in entering into the transaction as a whole was to purchase or sell goods orservices. See Princess Cruises case. It appears that Cindy's predominant purpose in thistransaction (as evidenced by the fact that 80% of the total contract price, including thelandscaping plan fee, was for labor and other services) was to purchase BW'slandscaping services.

Regardless of your answer to Question 39, if the trial court permits Justin and Magda totestify, how many Beetles should the trier of fact find that Justin was entitled to buy andat what price? [Hint: since UCC 2-201 deals with enforceability, its requirementssupercede those of UCC 2-207: see UCC 2-207 cmt 6, and 2-201(1).] A. Four Beetles for $5,000 each. B. Four Beetles for $7,500 each. C. Two Beetles for $5,000 each. D. Two Beetles for $7,500 each.

Answer C is the best answer. Under UCC 2-207, different terms in a singleconfirmation to an already concluded oral agreement should not become part of theagreement unless the other party expressly agreed to them. If the rule were otherwise,then a party would be able to unilaterally change the terms of an already concludedagreement. Using the standard approach to different terms in a single confirmation, then,the price of each Beetle should be $5,000, not $7,500.The standard approach to different terms in a single confirmation breaks down, however,when the different term is quantity. We cannot decide the terms of a contract until wefirst establish that we have an enforceable contract. Because UCC 2-201 deals withenforceability, its requirements will supersede those of UCC 2-207. Belinda's letter willqualify as the writing Justin needs to enforce the contract under 2-201(1), becauseBelinda - the party to be charged - signed it, it is sufficient to indicate Justin and Belindamade a contract for sale, and it states a quantity. Thus, Justin will be stuck with no morethan two cars.

Suppose that Ali never told Lefkowitz and the hospital that he would pay for Wally'scare, but that Ali was Wally's sole heir; and, under applicable state law, Ali' estate wouldbe liable to the same extent as Wally (if he had survived) or Wally's estate (if there wasone). Would the hospital have a viable claim against Ali's estate forthe expenses incurred in seeing to Wally's care? A. Yes, based on breach of contract. B. Yes, based on promissory estoppel. C. Yes, based on Restatement of Restitution §116. D. No.

Answer C is the best answer. Without a promise from Ari, the hospitalcannot recover for either breach of contract or promissory estoppel. Therefore, answersA and B are incorrect. However, unlike Lefkowitz, the hospital can recover both pre-andpost-visit expenses under Restatement of Restitution 116, because it acted with thereasonable expectation of being compensated; and here, unlike [question 23], Ari and hisestate are deemed to be beneficiaries of the hospital's care for Wally. Thus, D isincorrect.

Your local city school board operates a fleet of school buses to serve the students who live far enough from their school to require transportation. The 25 buses it is currently using were all purchased in 1995. Recently, the local newspaper reported that the school board was considering replacing a large part of its fleet of buses with newer, more energy-efficient ones. Hank Hill, the owner and operator of a tourists' sightseeing business, wrote the following email note to Linda Lawrence, the chairman of the school board: Dear Linda: I understand that your board is considering replacing all or some of its buses with new ones. I would buy five of your old ones, for the price of $20K each. (My son rides one every day and I have a good sense of their condition.) This offer is good for the next two weeks. - Your friend, Hank Hill Three days after receiving this note, the school board entered into a contract with Monarch Motors to purchase ten new school buses, delivery to be in three months. Linda then received another email from Hank: Dear Linda: I've had second thoughts about buying the buses. I think I'll go in another direction. Sorry to disappoint you. - Hank As of this point, which of

Answer C is the one most likely to be correct, because the school board can argue that the requirements of UCC § 2-205 have all been met here, and an acceptance now would be within the two weeks specified in p. 1163the offer. (This is well within the outside limit of three months of irrevocability that § 2-205 can create.) Answer A is wrong because although § 2-205 requires the offeror to be a "merchant," it does not require him to be in the business of selling goods of the kind; it applies to offers made by "business practice" merchants as well, which Hank surely would be. (See Comment 2 to UCC § 2-104, defining "merchant.") Also, § 2-205 applies to offers made by buyers as well as sellers. Answer D is wrong because the "signature" requirement of § 2-205 can include more than just a hand-signing. See Comment 2 to § 2-205. Answer B is somewhat more problematic, because whether the offer made by Hank was a "firm" one is a matter of interpretation. It does not use the words "firm offer," but § 2-205 does not require that; it simply requires that the offer give an "assurance that it will be held open." Saying that the offer "is good for the next two weeks" could conceivably be interpreted as meaning merely that it will expire automatically at the end of two weeks; it does seem, however, that saying the offer "is good" for two weeks could easily be seen as also a statement that it will not be revoked during that time.

Three years ago Chuck Carlson agreed to lease from Lily Landon a vacant storefront in which Chuck intended to operate a gourmet food shop, "Chucky's Cheeses." The term of the lease was three years, and the rent provided in the written lease (which was signed by both parties) was $2,000 a month. The lease contained the following provision: Renewal Option. Tenant is to have the option to renew for an additional three-year period, at the monthly rate of $2,250 or such other amount as the parties may agree to, provided Tenant gives Landlord written notice of intent to renew at least 60 days before the end of the term of this lease. The shop proved to be successful. When 80 days remained on his lease term, Chuck delivered to Lily a written notice of his intent to renew the lease for three years at the rate of $2,250 per month. Lily stated she would not recognize his right to renew unless he agreed to a monthly rental of $2,500. Which of the following statements best describes the parties' legal position? A. Chuck cannot enforce the option to renew because it is only an agreement to agree. B. Chuck can enforce the option to renew, but only if he can demonstrate reliance on the renewal prov

Answer C is the one most likely to be correct. Answer A echoes the court's decision in the similar case of Walker v. Keith, but here the option provision in the lease does not condition the renewal on the parties' ability to agree on a new rental; it commits Lily to a renewal term at the stated price, and then adds the possibility that the parties might agree to a different amount. (Presumably this might happen if Chuck balks at renewing the lease at $2,250, and Lily offers to take some lower amount as an incentive.) Answer B correctly suggests that Chuck's three years of reliance on the renewal option is likely to be substantial, but proof of reliance should not be necessary for Chuck to prevail. Answer D could be correct if Lily had committed herself only to bargain in good faith to reach an amount for the renewal rental, but the lease provision appears to actually commit her to the stated amount.

In a Restatement or "modified objectivist" jurisdiction, what evidence may the trial judgeconsider when deciding whether a written agreement is fully integrated andunambiguous? A. Only the written agreement. B. The written agreement, plus any other documents incorporated therein byreference. C. The written agreement, plus any other documents incorporated therein byreference, as well as other documents that appear to relate to the agreement. D. The written agreement, plus any other documents incorporated therein byreference, as well as other documents that relate to the agreement, and anyevidence a party wishes to proffer regarding the circumstances surrounding thecontract's formation

Answer D is the best answer

n a Restatement or "modified objectivist" jurisdiction, what is the legal effect of the finalquoted clause in the facts preceding (Question 34)? A. It is conclusive proof that the written agreement sets forth the parties' full andfinal agreement with respect to the subject matter of the written agreement, andthat all prior negotiations, prior or contemporaneous oral agreements, and priorwritten agreements were merged into or superseded by the written agreement. B. It is conclusive proof, in the absence of something on the face of the writing to thecontrary, that the written agreement sets forth the parties' full and final agreementwith respect to the subject matter of the written agreement, and that all priornegotiations, prior or contemporaneous oral agreements, and prior writtenagreements were merged into or superseded by the written agreement. C. It creates a strong, but rebuttable, presumption that the written agreement setsforth the parties' full and final agreement with respect to the subject matter of thewritten agreement, and that all prior negotiations, prior or contemporaneous oralagreements, and prior written agreements were merged into or superseded by thewritten agreement. D

Answer D is the best answer. "Modified objectivist" judges do not afford greatweight to the fact that the writing includes a merger or integration clause, especially if itis boilerplate.

As a general rule, extrinsic evidence, whether written or oral, is inadmissible to proveeither the intent of the parties to the contract or the meaning of contractual terms whenthe parties have executed A. an integrated written agreement. B. an integrated written agreement, the terms of which are unambiguous. C. a fully integrated written agreement. D. a fully integrated written agreement, the terms of which are unambiguous.

Answer D is the best answer. A fully integrated written agreement discharges allprior or contemporaneous oral agreements and prior written agreements relating to thesame subject matter as the fully integrated written contract. See R2 213(2). Courts willgenerally not permit the trier of fact to hear evidence of prior agreements, negotiations, orrepresentations superceded by a fully integrated writing. However, if an integrated termor agreement is susceptible to more than one reasonable meaning (i.e., ambiguous), thetrier of fact may consider extrinsic evidence, even if the writing is fully integrated, todetermine which of the possible meanings the parties must have objectively intendedwhen they entered into their contract.A contract is integrated if it represents the final agreement of the parties as to one or morewritten terms. R2 s.209(1). A contract is fully integrated if it represents the full and finalagreement of the parties as to all terms related to the contract's subject matter. R2s.210(1). A contract is partially integrated if it is final as to some or all of the termscontained in the writing, but not as to all terms relevant to the subject matter. R2s.210(2).Answer C is not the best answer because it ignores the possibility that, while a fullyintegrated writing is the full and final expression of the terms of the parties' agreement,one or more terms in the fully integrated writing may be reasonably susceptible to morethan one interpretation. If that is the case, the trial court should permit the trier of fact toconsider extrinsic evidence to resolve that ambiguity.

Beautiful's business had been flourishing, despite the minor setback involving CindyLauper, and Beautiful's owner, Tom Browne, wanted to expand. Tom contracted withRita Moreno to locate the record owner of the lot immediately east of Beautiful's existinglocation and to arrange Beautiful's purchase of the property. Tom agreed to pay Rita fourpercent (4%) of the purchase price if she could successfully arrange Beautiful's purchaseof the property.Absent a contrary agreement between the parties, what body of law governs Beautiful'scontract with Rita the realtor? A. Article 2, because Beautiful is a merchant dealing in goods. B. Article 2, because both Beautiful and Rita are merchants. C. Common law, because Beautiful's contract with Rita was for the purchase of real property. D. Common law, because Beautiful's contract with Rita was for Rita's personalservices.

Answer D is the best answer. Absent a contrary agreement between theparties, BW's contract with Rita will be governed by common law because BW'scontract with Rita was for Rita's personal services. While it is true that Rita, ifsuccessful, was to arrange for BW to purchase real property from the owner of the lot inquestion, Rita was not selling the real property to BW. Therefore, answer C is incorrect.Article 2 has nothing to do with BW's agreement with Rita, nor will it have anything todo with BW's purchase of the real property, if consummated. Neither Rita nor BW are"merchants," as Article 2 uses that term, in real property, because Article 2 defines a"merchant" only with respect to goods. See UCC s.2-104(1).

Returning to the facts in Questions 44 and 45, suppose that Niles, try as he might, simplycould not follow most of Cain's tutoring and grew increasingly disenchanted with theidea of taking over the family ranching business. One weekend, Niles and some friendswent to a concert featuring rising celtic-techno-hiphop sensation Wally Wallace. Fiveminutes in, Niles was hooked. When he returned home, he told his grandfather that hewanted to become a musician. After some lengthy conversations, Moses saw that Nileswould not be swayed. Moses then spoke with his daughter Esther and her son Sam, whowas delighted to be offered the opportunity to be groomed to take over the familybusiness from his grandfather.Notwithstanding the nature of the contract between Moses and Cain as one for personalservices, if Niles is legally able to and does transfer his rights to receive the benefit ofCain's tutoring and, eventually, consulting expertise, to Sam, would Cain be obligated toperform his contract with Moses for Sam's benefit?A. No, Cain's contract only obligated him to tutor and consult with Niles. If Samwanted the benefit of Cain's expertise, Moses or Sam would have to make a newcontract with Cain for Sam'

Answer D is the best answer. Barring language in the contract restricting Niles'sright to assign, or prohibiting Niles from assigning, his rights under the contract toanother, Niles could assign them to Sam: see R2 317. Niles was not required to giveCain prior notice, much less get his consent: see R2 323 cmt a, and 336(2).

Suppose, instead, that Savage was present when the boat floated away from the dock, butwas unable to do anything about it because he had recently had knee surgery and was oncrutches. Seeing his cherished boat begin to float away, he called out to Glenn, who wasnearby: "If you will fetch my boat and bring it back to me, I'll pay you $100." Glenn,seeing an opportunity to make a few extra bucks, grabbed his friends Grace and Will, andthey set out to retrieve the boat and return it to Savage. When they returned withSavage's boat, he thanked them, handed them $10 each, and said, "Sorry, that's all I haveon me." Grace and Will are satisfied because Glenn never told them how much toexpect. Glenn, on the other hand, was upset, and tried unsuccessfully the next day to getthe rest of the money Savage promised him.Does Glenn have a viable equitable claim against Savage? A. Yes, based on promissory estoppel. B. Yes, based on promissory restitution. C. Yes, based on Restatement of Restitution, §117. D. No, because Glenn can recover from Savage for breach of contract.

Answer D is the best answer. Glen appears to have two claims againstSavage: breach of a unilateral contract and promissory estoppel. Promissory restitutionapplies only where the promise to pay comes after the service was rendered, which is notthe case here. Therefore, B is incorrect. Section 117 of Restatement of Restitution onlyapplies in situations where a party is forced by circumstances not of his own making toact without the owner's permission: C is incorrect. Glenn easily establishes that aunilateral contract was created (acceptance-by-performance). Thus, a court will not reachthe equitable remedy, available only if there is an unavailability of any other remedy: seeR2 139(2)(a). Answer A is the second-best answer because Glenn's promissory estoppel claim should yield to his contract claim.

Returning to the facts of Question.15, suppose that, instead of offering to employ Handefor two years, Elliot offered to employ Hande "until she dies, becomes disabled, orvoluntarily retires."Assuming that Portia's and Hande formed a contract supported by consideration, wouldthat contract satisfy the relevant statute of frauds? A. No, because it was a contract for services that the parties anticipated would beperformed over a period in excess of one year. B. No, because the contract gave Hande the option to terminate the contract early byvoluntarily retiring; therefore, it was illusory and unenforceable. C. Yes, but only if Hande died, became disabled, or voluntarily retired during herfirst year of employment. D. Yes, because Hande could fully perform the contract in one year or less.

Answer D is the best answer. Hande could have fully performed thiscontract within one year, because she could have died, become disabled, or voluntarilyretired in that time. As such, R2 110(1)(e) does not require a signed writing to evidencethe contract.While it is true that the parties may have expected Hande to work for Portia's for twoyears or more, it is also true that Hande could fully perform the contract by dying,becoming disabled, or voluntarily retiring prior to the commencement of the contract'ssecond year. Because the contract provides that it would terminate when the first of theseevents occurred, it could be fully performed in less than one year. Therefore, A isincorrect.While giving Hande the option to voluntarily retire might make her promise to teach atPortia's for two years or until she retires illusory, it does not make Portia's promise toemploy Hande for two years or until she retires illusory. And, in any event, lack ofconsideration is not a factor in deciding whether a contract, if one exists, satisfies thestatute of frauds. Therefore, answer B is incorrect.Whether a contract satisfies the "one-year provision" of the statute of frauds depends onthe state of affairs when the parties formed the contract, not on what happens thereafter.So, this contract does or does not satisfy the statute of frauds irrespective of whathappened to Hande after the contract formed. Therefore, answer C is incorrect

Lefkowitz, an insurance defense attorney, found Wally lying gravely injured andunconscious by the side of the road, where Wally had apparently crawled from hisoverturned car. The car was leaking fuel and appeared to be at risk of catching fire.Lefkowitz carefully placed Wally in the back of Lefkowitz's Range Rover and droveWally to the local hospital, where Lefkowitz had Wally admitted and promised to payWally's expenses if he was unable to do so himself. Word of Lefkowitz's good deedsoon spread, and the local network affiliate ran a story in the evening news that waspicked up a few days later by the network news. Wally's recently estranged partner, Ali,saw the story and tracked down Lefkowitz, who told Ali where to find Wally. Unable toattend to Wally personally, Ali told both Lefkowitz and hospital officials to spare noeffort or expense to return Wally to good health. Ali promised to pay the hospital, orreimburse Lefkowitz, whatever the arrangement between Lefkowitz and the hospitalmight be, for all expenses. Alas, Wally did not recover, and Ali met an untimely endwhile mountain climbing. The hospital sent Lefkowitz a bill for Wally's room and care,which Lefkowitz paid as he had promis

Answer D is the best answer. Lefkowitz cannot claim promissory estoppelbecause Ari' promise did not cause Lefkowitz to detrimentally rely by agreeing to pay for Wally's care up to the date of Ari' visit. Lefkowitz had already agreed to do that. R290(1). See also R2 86

Assuming no additional facts other than that Cain appeared at the family homestead thefollowing week, as promised, and commenced tutoring Niles, as promised, at what pointin time did Niles's rights as a third party beneficiary of the contract between Moses andCain vest (i.e., become enforceable)? A. When Moses and Cain signed the contract. B. When Moses paid Cain $5,000 toward his first year's retainer. C. When Cain appeared at Moses's door to begin tutoring Niles. D. When Cain began tutoring Niles.

Answer D is the best answer. Moses and Cain were free to change the terms of orto rescind the contract until (1) Niles manifests his own assent to the contract; (2) Nilesmaterially alters his position in detrimental reliance on the contract; or (3) somecontractual condition for vesting occurs. See R2 311(2) and (3). Niles's rights in thecontract did not vest until he gave up his free time the first afternoon Cain came to tutorhim, and thus materially changed position in detrimental reliance on the contract.

Which of the following evidence should the trial court consider in deciding whetherB&S's contract with GenX is unambiguous? A. Evidence that "Osaka" is a generic term for a particular type or grade of steel, aswell as the name of a particular brand of that type or grade of steel (like"Kleenex" or "Xerox"). B. A copy of a memo written by Falconer's site supervisor attached to the invitationto bid sent to, among others, B&S, explaining that Falconer's specification of"Osaka steel" meant "Osaka or similar grade and type steel." C. Evidence that, in their past dealings on other projects, Falconer had routinelyallowed B&S to substitute like type and grade materials for those specified byFalconer or called for in the contract between B&S and the project owner. D. All of the above.

Answer D is the best answer. Now we are in the realm of ambiguity. Therefore,evidence of a trade usage(A), prior dealings between the same parties on other projects(C), and the parties' own construction of this agreement (B) are all relevant todetermining whether the written agreement is ambiguous and to resolving any ambiguity.All are correct, but under-inclusive.

In June 2023, Sam Seller, a high school teacher, decided to sell a unique chair that had been designed in 1920 by world renowned architect, Fred L. Bright, to go into a house he had also designed. The "Bright" chair had been passed down through Sam's family for four generations. He advertised the chair for sale online and received a call from Ben Buyer, a wealthy art collector. Ben went to Sam's house on June 20 to look at the chair and decided to offer $150,000 for it. Sam orally agreed to sell the chair for that price. The next day, June 21, Ben obtained from his bank a cashier's check payable to Sam Seller, for $150,000. Ben sent the check in a letter to Sam by messenger, along with a signed note that accurately described the agreement. The following day, June 22, Sam returned the check to Ben with the letter unopened. Ben immediately called Sam to ask why the check was returned. Sam stated, "I never really agreed to sell the chair. I merely agreed to consider your offer and I have decided that I cannot part with it." Ben promptly filed a lawsuit for breach of contract, but Sam filed a motion to dismiss with a sworn affidavit that he never agreed to sell the chair. Would Ben be likely

Answer D is the best answer. The UCC § 2-201(1) applies to contracts for the sale of goods for a price of $500 or more. Sam never signed anything that would satisfy the writing requirement of UCC § 2-201(1), and thus the question is whether one of the exceptions in the section is satisfied. No exception applies and therefore the correct answer is D. Answer A is not correct because the exception in UCC § 2-201(3)(a) requires that the goods be "specially manufactured for the buyer" and a unique heirloom would not qualify. Answer B raises the possible application of UCC § 2-201(2), the "between merchants" exception, but Sam Seller is a school teacher and does not appear to be a merchant with regard to antique furniture. Answer C is not correct because while UCC § 2-201(3)(c) creates a part performance exception to the statute of frauds, it requires either that payment have been "made and accepted" by the seller or that goods have been "received and accepted" by the buyer, not both, and neither of which have occurred here.

In early June 2002, Rita Elliot, the Dean of Portia's College of Law, located in the stateof Magnolia, telephoned Hansel Hande, a resident of South Mesquite (located in anotherstate several hundred miles away from Magnolia), and offered her a two-yearappointment as a visiting professor of law at an annual salary of $50,000, plus certainexpenses, provided that Hande could move to Magnolia in time to begin the Fall 2002semester. Elliot mentioned a remote possibility that the visiting position might becomepermanent, but she cautioned Hande against considering that possibility when decidingwhether to accept the visiting offer. Hande accepted, quit her lucrative private practice inSouth Mesquite, sold her home in South Mesquite, and moved herself, her husband, andtheir child Lars, to Magnolia, incurring several thousand dollars in un-reimbursed movingexpenses.During the spring semester of her first year, Elliot informed Hande that the springsemester would likely be her last. While Hande's job performance was satisfactory,former Supreme Court Justice Pussy Foote, a Magnolia native, had inquired aboutteaching part-time at Portia's whilst he worked on his memoirs, and Elliot decided to usethe fu

Answer D is the best answer. The fact that Hande might have become unable orunwilling to perform the contract during the first year does not change the fact that thiswas a contract for services not to be fully performed within one year. R2 s110(1)(e)requires that a writing signed by the party against whom enforcement is sought evidencesuch a contract. There is no such writing, so Hande cannot enforce the contract againstPortia's. Therefore, C is incorrect.While Hande may have been paid on an annual basis, she and Elliot agreed on a two-yearcontract. Therefore, answer A is incorrect. While Hande's detrimental reliance mayallow her to enforce Portia's promise despite the fact that Hande can produce no writingthat satisfies the statute of frauds, her detrimental reliance would not, by itself, satisfy thestatute of frauds. Therefore, B is incorrect.

Suppose that Ali never told Lefkowitz and the hospital that he would pay for Wally'scare, but that Ali was Wally's sole heir; and, under applicable state law, Ali' estate wouldbe liable to the same extent as Wally (if he had survived) or Wally's estate (if there wasone).Would Lefkowitz have a viable claim against Ali's estate for the expenses he incurred inseeing to Wally's care? A. Yes, based on breach of contract. B. Yes, based on promissory estoppel. C. Yes, based on Restatement of Restitution §116. D. No.

Answer D is the best answer. Without a promise of any sort from Ari,Lefkowitz cannot recover for either breach of contract or promissory estoppel.Therefore, answers A and B are incorrect. Without a promise, his only avenue isRestatement of Restitution 116, which is foreclosed because, as discussed above,Lefkowitz did not act expecting compensation. Thus, C is incorrect.

Dina Drew decided in May 2023 to leave her job as an accountant and to pursue a long-time goal by opening a children's day care center in Oaktown. Dina had saved $500,000, all of which she used to purchase a commercial building and buy furniture and supplies. Upon inspection by the Oaktown City Building Department in July 2023, it was discovered that the building needed two more emergency exits to meet city safety code requirements. Dina contacted Carl Cruz, a contractor who had often done work for her mother, Megan Drew. Carl offered to do the renovations within a week at a price of $75,000. Dina did not have cash funds to pay Carl and was having trouble getting a loan from a bank. Upon hearing about the problem, Megan called Carl and spoke with him over the telephone. Megan told Carl, "If you will go ahead and do the work for my daughter, Dina, I will pay you the $75,000 in two months if Dina cannot borrow the money from a bank by then." After that conversation, Carl agreed with Dina to do the work, and they both signed a brief one-page contract. In the margin Carl had added this sentence: "Payment in two months guaranteed by Megan Drew." If Carl completes the work and after two months

Answer D is the best available answer. This question focuses on the "suretyship" category of the statute of frauds, or promises to answer for the debt or duty of another, as discussed in Note 3 following the Crabtree case. This category is covered by the Restatement (Second) of Contracts §§ 112-123. The promise here is made to the creditor and is for the benefit of Megan's daughter and does not benefit Megan herself. Thus, the promise from Megan to Carl would come within the suretyship category and would require a writing signed by Megan. Answer A would not be correct because, while it is true that the promise would not fall within the one-year category, it does fall within the suretyship category. Answer B would not be correct because, while the promise from Megan was reflected in the writing, Megan did not sign it. There is no indication that Dina signed on Megan's behalf. Answer C would not be correct because Carl's contract was for construction services and was not one for transfer of an interest in real property as discussed in Note 1 following the Beaver case. Carl would be left to his contract claim against Dina. Carl might pursue a reliance claim against Megan under Restatement (Second) of Contracts § 139, but Comment a to Restatement (Second) of Contracts § 112 gives a strong indication that a reliance argument should not prevail in a suretyship situation. Mother promised money but since she didn't have anything to do with the deal it had to be in writing. There is no privity of contract between the mother and the contractor.

Suppose, instead, that Ari offered to pay Ben $750 to repaint Ari's car and Ben accepted.Both parties understood at the time that $500 of the $750 was the money Ari alreadyowed Ben.Was Ari's offer of $750 valid consideration for Ben's promise to repaint Ari's car? A. No, because Ari's promise to pay a debt he already owed to Ben cannot beconsideration for an additional promise or performance by Ben. B. Yes, because Ben had not previously been able to induce or compel Ari to pay hisdebt, so Ari's offer to pay the $750 provided Ben with value he might nototherwise have received. C. Yes, because the price Ari promised to pay equaled the amount of his outstandingdebt plus the fair market value of Ben's services. D. Yes, because Ben promised to repaint Ari's car in exchange for Ari's promise topay Ben more than the $500 Ari already owed Ben.

Answer D is the correct answer because Ari offered Ben considerationover and above the $500 already owed. Ari's promise to perform an existing legal duty owed to Ben would not be valid consideration, as discussed in re [above qu.13], unlessthe obligation was doubtful or the amount owed was subject to a good faith dispute. R2s.73. In this Question, Ari offered consideration that "differs from what was required bythe duty in a way which reflects more than a pretense of a bargain." R2 73. If the partiesbargained for this consideration, and Ben was willing to paint Ari's car for the $750, thena court will not inquire into the adequacy of the consideration. Therefore, A is incorrect.The fact that Ari had, up to this point, failed to pay Ben the $500 he owed him does notchange the analysis. Ari's offer to pay Ben $750 to paint his car is or is not adequateconsideration standing alone, unless the amount of the prior debt or Ari's obligation topay it were the subject of an honest dispute. The facts deny such a dispute. Therefore,answer B is incorrect.For the same reasons discussed in the answer to Question 13, the fact that Ari promisedto pay Ben three times the "going rate" for Ben's promise to repaint his car would nottransform Ari's otherwise legally inadequate consideration into adequate consideration.Therefore, answer C is incorrect.

Ari owed Ben $500, which the parties did not dispute. Ari offered to pay Ben the $500 ifBen would promise to repaint Ari's car. Ben typically charged $250 to repaint a car thesize, style, and condition of Ari's.Was Ari's offer of $500 valid consideration for Ben's promise to repaint Ari's car? A. Yes, because Ben promised to repaint Ari's car in exchange for Ari's promise topay Ben the $500 Ari already owed Ben. B. Yes, because the price Ari promised to pay was twice the value of Ben's services,so Ari was obviously repaying a part of his debt as well as purchasing Ben'sservices. C. Yes, because Ben had not previously been able to induce or compel Ari to pay hisdebt, so Ari's offer to pay the $500 provided Ben with value he might nototherwise have received. D. No, because Ari's promise to pay a debt he already owed to Ben cannot beconsideration for an additional promise or performance by Ben.

Answer D is the correct answer. Ben promised to repaint Ari's car inexchange for Ari's promise to pay Ben the $500. Therefore, Ari's promise is what Benbargained for. While that normally would be sufficient to make Ari's promiseconsideration, Ari already owed Ben a duty to pay him the $500. Ari's promise toperform an existing legal duty Ari owed to Ben was not valid consideration, unless theobligation was doubtful or the amount owed was subject to a good faith dispute. R2 s.73.the facts of this question deny any such doubt or dispute. Therefore, Answer A isincorrect. The fact that Ari had, up to this point, failed to pay Ben the $500 does notchange this. Therefore, Answer C is incorrect.The fact that Ari promised to pay Ben twice the "going rate" for Ben's promise to repainthis car does not transform Ari's legally inadequate consideration into adequateconsideration. Therefore, B is incorrect.

Moses was getting along in years and wanted to ensure that the chinchilla ranch he hadinherited from his father, who had inherited it from his father, would stay in the familyfor many years to come. Moses's eldest son, Lazarus, predeceased him, leavingLazarus's son (Moses's grandson) Niles next in line to inherit the ranch. (Moses stronglybelieved in primogeniture.) Niles, who was 19 years old at the time, had never done wellin school, but he seemed to enjoy spending his free time at the ranch, helping outhowever he could. Moses was concerned that, while Niles might want to run the ranchwhen Moses retired or died, Niles might not be able to handle the ranch's businessaffairs.Desiring to provide Niles with training that would enable him to take over the business,Moses entered into a contract with Adam Cain, a business consultant who lived in anearby city and had particular expertise in farm and ranch finances and management.The contract provided that Cain would meet with Niles one afternoon a week during theschool year, and twice a week during the summer, to tutor Niles in accounting,economics, finance, and management, for three years or until Niles took over day-to-daymanagement of the r

Answer D is the correct answer. Niles is an intended beneficiary because Mosesformed his contract with Cain for Niles's benefit. Niles is a donee beneficiary, ratherthan a creditor beneficiary, because Moses made his contract with Cain as a gift to Niles

Suppose that Portia's policy is to pay professors their salaries in equal installments on thelast business day of each month, beginning with the last day of the month in which aprofessor begins teaching. In order to process Hande's first paycheck, Elliot signed apayroll form prepared by her administrative assistant, Chet, who typed the words"Visiting Professor" on the line on the payroll form titled "Job Title" and "24 months" onthe line titled "Duration of Contract." Elliot signed the payroll form without making anychanges to it.Assuming that Portia's and Hande formed a contract supported by consideration, wouldthat contract satisfy the relevant statute of frauds? A. No, because there was no written contract signed by both parties. B. No, because there was no writing signed by both parties evidencing the contract. C. No, because Chet created and Elliot signed the payroll record after Hande hadalready accepted and begun to perform. D. Yes, because the payroll form evidenced a two-year employment contractbetween Portia's and Hande.

Answer D is the correct answer. The payroll record "reasonably identifiesthe subject matter of the contract," R2 131(a) - namely, Hande's employment by Portia's.It "is sufficient to indicate that a contract with respect thereto has been made between theparties," R2 131(b) - why else is Portia's putting Hande on the payroll? It "states withreasonable certainty the essential terms of the unperformed promises in the contract," R2131(c) - the document, at a minimum, indicates the position to which Elliot appointedher, the amount and frequency of her pay, and the term of her appointment. And, Elliotsigned it, on behalf of Portia's, which is the "party to be charged."Answer A plays upon the misconception that the statute of frauds requires writtencontracts. Whilst true historically, the statutes of frauds most often encountered, in thiscourse and in practice, do not require a written contract. Rather, R2 110, UCC 2-201,and UCC 1-206 require only a signed writing that (1) satisfies one or more specified content requirements, and (2) evidences that the parties formed a contract relating to thesubject matter of their actual agreement. Note also that both parties need not sign the"writing"; it need only be signed by "the party to be charged," R2 131. The trick, ofcourse, is that the parties generally do not know, when they enter into a contract, whichone of them is going to need to seek legal recourse to enforce the contract against theother at some future date; so, the parties often will insist that everyone sign the writing.However, the statutes of frauds themselves include no such requirement. Therefore, B isincorrect.Another misconception, albeit less common, is that, for purposes of the statute of frauds,time stops at the moment the contract is formed (i.e., if there is no writing in existence atthat time, no subsequent writing can satisfy the statute of frauds. R2 136 states: "Amemorandum sufficient to satisfy the Statute may be made or signed at any time beforeor after the formation of the contract." See also the Crabtree and Bazak cases, where the memoranda retroactively satisfied the statute of frauds when suit was later brought on the contract.

Seller owns two bicycles: one old bicycle worth about $75 (Old Bike) and a new bicycle worth $200 (New Bike). Seller wants to sell the Old Bike and keep the New Bike. On a public street, Seller is seated on the New Bike, to which he has attached a sign, "My bicycle for sale, $75." Walking on the street, Buyer approaches Seller. Seller says, "As the sign gives notice, my bicycle is for sale; $75 takes it." Buyer believes that Seller is offering for sale the very bicycle on which Seller sits. Buyer takes $75 from his pocket and says, "I'll take it." Buyer hands Seller the $75 and says, "So, would you give it over to me please? I'll ride it away now." Seller responds, "Oh, no. I was referring not to this bicycle but to an older bicycle I have sitting in my garage." The parties have contracted for the sale of: A. The Old Bike sitting in Seller's garage. B. The New Bike on which Seller is seated. C. No bicycle, because there was no meeting of the minds between the two parties. D. No bicycle, because $75 would be considered too little money for a bicycle worth $200.

As this is a mutual assent case, the correct answer is B, under the objective approach to contract formation. (See R2 50(1) pursuant to an invitation to complete the bargain either by promise or by performance. More on "unilateral" contracts next day). Under a "subjective" or "meeting of the minds" approach, the seller's "actual" intention (see Raycase) does not signify as against the seller's "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." R2 24. A reasonable buyer would understand the advert to refer to the bike in place, rather than another one in a remote location.

After the notoriety surrounding the lawsuit between Amanda and Dang Durbin dies down and leaves the front pages, a rather rueful Dick, Dang's son, arranges to meet Amanda for a coffee, ostensibly to smooth their ruffled feathers. During the coffee, romantic sparks fly between Amanda and Dick. Dick is a happily married man. Nevertheless, Dick and Amanda embark upon an illicit sexual affair. When the paparazzi catch them leaving a hotel together one night, the pictures are splashed all over the papers and the internet the next morning. Amanda is vilified in public as "that gold-digger" who was after Dang's money from the beginning. "The Good Samaritan act was a ruse," the papers crow. The affair between Amanda and Dick quickly ends. Amanda loses her job, and her landlord asks her to leave her rented apartment because "I can't have this sort of adverse publicity associated with my building." Feeling terrible about all this, Dick writes to Amanda, promising to reimburse Amanda for all the losses she suffered because of their affair and its aftermath. When she calls at his office, broke and destitute, to ask him to make good on his promise, he demurs. She sues him. What result? A. Amanda wi

B is correct. In this case, none of the theories - contract, reliance, or restitution - succeeds, since the promise follows the consideration which, itself, is "an illicit relationship." Recall that in Watts, the court noted that a contract based on consideration based solely on such a relationship may run afoul of enforcement on public policy grounds, rendering the contract void. Watts, at 313.

Baker operated a plant that made specialty fabrics. Baker routinely orderednylon, needed in the fabrication process, from McKenzie. Over time, Baker sent a seriesof purchase orders to McKenzie each of which legally qualified as an offer to purchase.Each purchase order contained an arbitration clause, which stated in pertinent part,"Any controversy arising out of this contract shall be settled by arbitration in the City ofBoston in accordance with the Rules of the American Textile Industry then obtaining."McKenzie received the purchase orders and dealt with each in the same way, namely: itsent a written, signed invoice, followed by shipment. Each invoice set forth quantity andprice with the following clause included:This document shall not be considered an acceptance under sec. 2-207 of the UCCunless Buyer agrees with all terms herein contained, Buyer's order and Seller'sacceptance being hereby made expressly subject to all terms herein contained.A conspicuous term in every invoice stated, "All disputes will be settled in the statecourts of Massachusetts." Baker routinely received the invoices followed by the nylonand paid in a timely manner, and both parties were satisfied. However, disa

B is correct. This case is complicated by two factors: first, it is Baker's PO thatcontains the arbitration clause, but Baker resists arbitration (i.e., he has changed his mindand prefers to litigate, or wishes to ignore what may in any event have been "boilerplate"within his PO). Second, although there is a strong presumption in favor of arbitration, theclause will only be enforced if the parties have agreed to that term within the contract.Since we are told in the call that the PO represents the offer, the seller's form is anacceptance that expressly conditions its acceptance of the offer to its terms. As such, it isa counteroffer, and the document exchange, even over the course of several transactions,never constitution contract formation. The contract terms, expressed within thosedocuments, are those that agree; any others are knocked out under 2-207(3). The defaultis litigation, so McKenzie's motion will be denied.

Bob Byer entered into negotiations to purchase a house from Sam Seller during April 2022. On April 15, while touring the house with his realtor, Bob noticed some water stains on the ceiling in an upstairs bedroom. Bob asked Sam, who happened to be present, about the condition of the roof. Sam stated that there had been a leak in the roof but said it was repaired during March 2022. Sam went on to say, "Rest assured that the roof is in good shape." In fact, the roof actually had not been repaired. On April 21, 2022, Bob signed a five-page, standardized purchase contract for the house which contained a provision which read, "Seller makes no representations concerning the condition of the roof, plumbing, or electrical wiring in the house. Buyer may conduct any inspections of the house that may be desired." Another paragraph read, "This writing contains the entire agreement of the parties." Bob took possession of the house on June 2, 2022, and the next day he discovered that the roof was still leaking in the upstairs bedroom when a rainstorm occurred. Would Bob be likely to succeed in an action to rescind the home sales contract? A. Yes, because the oral commitment about the roof would modify

B is the best answer. Generally speaking, the parol evidence rule does not bar evidence offered to prove fraud for the purpose of invalidating the agreement. See Restatement (Second) § 214(d). The California Supreme Court took that position in the Riverisland case, discussed in Note 1 following the Sherrodd case. It should be noted from the Sherrodd case, however, that some jurisdictions will add a qualification that the alleged fraud cannot be based on something specifically disclaimed in the writing. If Bob were located in such a jurisdiction, then Answer C would most likely be the correct response. While the parol evidence rule does not bar evidence of a modification, the statement about the roof came before the written contract was executed and therefore Answer A is incorrect. Answer D is incorrect because it is in fact possible for a buyer to reasonably rely on an oral statement from a seller, depending on the context.

Olga was the owner of two homes, a primary home in the capital city and a lakeside cabin on the other side of the state of Adams. Olga owned a car in each location. Olga's daughter, Enid, graduated from college in June 2021 and decided to live in the cabin for the following year with her college friend, Fay, while the two of them collaborated on a writing project. Olga contacted her automobile insurance company, Acme Insurance, to renew her auto insurance policy for the coming year and to make sure that both Enid and Fay would be fully covered while driving her second car. The Acme agent said that the policy covered friends who were not listed on the policy when driving with Olga's permission. Olga paid her annual premium on June 10, 2021, and received a new copy of the policy one week later. On April 15, 2022, Fay was involved in an accident while driving Olga's car. The driver of the other car promptly brought a lawsuit against Olga and Fay for physical injuries and property damage. Olga filed a claim with Acme under her auto policy but Acme denied coverage based on language on page 7 of the 20-page policy which defined a "permissive driver" as "someone other than a listed driver who d

B is the correct answer in those jurisdictions that have adopted a broad version of the reasonable expectations doctrine because Olga received an oral promise of coverage that would have been disproved only by reading through the lengthy standardized policy. Her situation is exactly the kind that the broad form of the reasonable expectations doctrine would address. It should be noted, however, that some states do require that the objectionable term be ambiguous or hidden before the reasonable expectations doctrine will apply. The term at issue for Olga is probably not ambiguous, but it may be considered to have been hidden since it was on page 7 of a 20-page contract. Answer A is incorrect because insurance contracts are a type where parties frequently contemplate that the detailed terms will arrive after formation and the insured party will be able to cancel the contract if they disagree with the terms. Answer C is incorrect because the premise of the reasonable expectations doctrine is its recognition that adherents to standardized agreements will frequently not read the fine print in p. 1165the contract. Answer D is incorrect in a state with a broad version of the reasonable expectations doctrine because an ambiguity is not required to apply the doctrine.

On May 1, 2003, Beautiful World, a professional landscaper doing business in Iowa,telephoned Sumptuous Delights, a commercial tree farm in Colorado, and ordered 100juniper saplings, at a price of $9 per sapling, with Sumptuous to deliver the saplings toBeautiful no later than June 15th. Later that day, Sumptuous faxed an acknowledgement to Beautiful, agreeing to deliver 100 juniper saplings to Beautiful no later than June 15th, with Beautiful paying $9 per sapling. Absent a contrary agreement between the parties, what substantive body of law governsthe contract between Beautiful and Sumptuous? A. UCC Article 2, because both Beautiful and Sumptuous were merchants when theyentered into the contract. B. UCC Article 2, because the juniper saplings were goods when Beautiful andSumptuous entered into the contract. C. UCC Article 2, because the juniper saplings were goods when Beautiful andSumptuous entered into the contract and the contract price is $500 or more. D. Common law, because the juniper saplings were affixed to real property when Beautiful and Sumptuous entered into the contract.

B. Absent a contrary agreement between the parties, UCC Article 2 governs the transaction between BW and SD, because the juniper saplings were goods when BW and SD entered into the contract While it is true that common law generally governs contracts involving real property,UCC s 2-105(1) defines "goods" to include "growing crops and other identified thingsattached to realty as described in the section on goods to be severed from realty (s.2-107)." UCC s.2-107(2), in turn, provides that "[a] contract for the sale apart from theland of growing crops or other things attached to realty and capable of severance withoutmaterial harm thereto...or of timber to be cut is a contract for the sale of goods within[Article 2]." Therefore, even if the saplings were growing on real property, Article 2would govern this sale. If the saplings were growing in movable planters, then we wouldnot even need to look at UCC s.2-107 to decide that the saplings were goods. Either way,Answer D is incorrect.Note also that Article 2 applies to all contracts for the sale of goods, regardless of theirprice. See UCC s.2-102. The $500 (or $5000) threshold only dictates which contractsfor the sale of goods require some writing in order to satisfy the statute of frauds.Therefore, answer C is incorrect. Article 2 also applies to all contracts for the sale ofgoods, regardless of whether the contracting parties are merchants or non-merchants; seeUCC 2-104 cmt 1. Therefore, answer A is incorrect.

Anita places an advert in the local papers: "I offer my farm Blackacre for sale to the highest cash bidder and undertake to make conveyance to the person submitting the highest bid received at the address below within the next thirty days." Five days after this ad is placed, Candace submits a bid for $40,000. Two days later, Bertram submits a bid for $50,000. Bertram triumphantly insists that he has a contract with Anita. A. Bertram is correct, since his bid is higher than Candace's bid. B. Bertram is correct, since Anita's advert is not an invitation but an incontrovertible offer. C. Bertram is not correct, since Anita's advert is not an invitation but actually a real offer with a condition attached. D. Bertram is not correct, since Anita's advert is an invitation merely, and not an offer.

C is correct. Anita's advert is an offer but it is conditional; that is, each bid operates as an acceptance creating rights and duties conditional on no higher bid being received within thirty days. Bertram's acceptance is still within the first week. Thus, even though this advertisement would be seen as an offer - see R2 26 (and R2 29), Comment b - because there is "language of commitment or some invitation to take action without further communication," this does not mean that the offer was accepted without the condition's being satisfied.

Bertram and Scott were negotiating the leasehold of a plot of land that Bertram owned on the outskirts of the city. Bertram agreed to the leasehold on condition that Scott develop the property in order to attract suburban development. This would raise the value of the land, and Scott's contract payment of $100,000 was therefore calculated to factor in the future market value of the estate. Both parties were aware that the County had recently zoned the area in question for both commercial and residential construction. Scott completed the project. Upon payment of the contract price, he sued for double the amount, arguing that he had developed the property for the future building of both commercial and residential units. Scott wishes to introduce evidence of an oral promise, made before the parties signed the contract, that Bertram would pay him double his fee if Scott included the appropriate landscaping and installation of utilities for the future development of commercial units on the property. "Of course," Bertram is alleged to have said, "I will pay you double for that work, since that would enhance the value of the property even more." Bertram wants to exclude evidence of the oral ag

C is correct. This is the only reason, of the choices given, for why a court - whether textualist or contextualist - would exclude this prior oral agreement. (A contextualist court may listen to extrinsic evidence to determine the question of integration, but once it has satisfied itself as to that question, it will bar evidence to supplement a fully integrated agreement.) Note that there may be ambiguity in the contract price since it is calculated according to "future market value." An assessor may prove that the value is enhanced by developing the land for commercial use. As such, parol evidence may be admitted to explain an ambiguity (choice D). For choice A, the parol evidence may be characterized as collateral, but if it was agreed to for separate consideration (exchange of promises: develop commercial properties for extra money) there should be no reason to bar it. The more likely reason, as in Sherrod, would be that the collateral agreement directly conflicts with a material term (price) of the contract. But B is wrong because not all courts follow Sherrod, and many will admit parol evidence of fraud irrespective of contradiction with the term.

Clara, a home improvement contractor, and Hannah, a homeowner, both signed a brief one-page "work bill" form which simply stated, "$4,000—a new fence for backyard—redwood five-foot high—pay in full on completion." The writing did not contain a merger clause. Hannah alleges that there was also an oral understanding that Clara would receive an additional $500 for removing debris from the old fence and disposing of it at a waste facility. Clara dismantled the old fence and placed it in the center of Hannah's backyard. When Clara completed the new fence and asked for payment, Hannah asked about removal of the old fence debris. Clara replied that she never committed to the $500 price to remove the old fence and that she is only willing to do so for $1,000. Hannah then refused to pay the $4,000 for the new fence. If a lawsuit ensues, would Hannah be able to offer evidence of the alleged oral agreement to have the old fence removed for $500? A. No, because the alleged oral agreement would contradict the written agreement. B. No, because there is no ambiguity in the written agreement. C. Yes, because the alleged oral agreement would be a separate contract with separate consideration from the wri

C is the correct answer. The parol evidence rule does not bar evidence of the oral agreement concerning debris removal because it is a "separate contract" with separate consideration. See Restatement (Second) § 216(2)(a). Answer A is incorrect because the alleged oral agreement in no sense contradicts any term in the writing. Answer B is incorrect because the evidence does not purport to interpret any provision in the writing. Answer D is incorrect because the absence of a merger clause does not conclusively establish that a writing is not a complete integration.

An employer sends a computer programmer an email stating, "I am making you a job offer to hire you for a one-year contract at a salary of $100,000 a year." The email provided all of the relevant employment terms, including the details of the programmer's duties, job title, benefits etc. The email ended by stating, "This offer will remain open for 60 days. Write or call me to accept." The programmer replied by email, stating, "That is a very interesting offer. Let me consider it over the next couple of months. Would you consider hiring me for two years at a salary of $90,000 a year?" The employer did not reply to the programmer's email. Within the 60-day period, the programmer called and told the employer that he accepted the employer's original offer. Which of the following is the most accurate characterization of the parties' communications? A. The programmer's email is a counteroffer. B. The programmer formed a contract with the employer when he called the employer within the 60-day period. C. Since the programmer only accepted orally, the programmer could argue he hadn't accepted in the proper form (in writing) if he later changed his mind and wanted out of the agreement. D. The empl

Choice B is correct . This is a mutual assent problem, the main legal issue being whether the programmer's email was a counteroffer that destroyed the power of acceptance. To solve the problem, identify the legal effect of each communication. The employer's email is obviously an offer since the employer manifests intent to enter into a bargain. The essential terms are certain and definite because the salary, term, relevant duties and other employment terms are specified. Therefore, the programmer has the power of acceptance. Was the programmer's response a counteroffer that destroyed his power of acceptance as to the employer's offer? R2 39(2) provides that, "An offeree's power of acceptance is terminated by his making of a counteroffer, unless the offeror has manifested a contrary intention or unless the counteroffer manifests a contrary intention of the offeree." Here, the programmer has made what might be deemed a "mere inquiry" as to whether the employer would accept different terms: a slightly lower salary but for a longer term. Because the programmer specifically asks to think the offer over before asking about these other terms, the programmer has sought to reserve his power of acceptance as to the employer's offer. Here, it is clear that the programmer does not intend to reject the original offer through a counteroffer. Since the employer specified that the offer was open for 60 days, the lapse of time has not destroyed the programmer's power of acceptance. Since the employer specified that the programmer could accept by phone or email, the programmer's phone call serves as acceptance of the offer since he agrees unequivocally to every term of the original offer. Consequently, Choice B is correct. Choice D misapplies the "silence as acceptance" rules. Silence is not normally acceptance (see p.45), but R2 69 provides some exceptions. However, nothing in these facts suggests that the parties had previously agreed that silence is acceptance. None of the other exceptions apply.

Seller manufactures and sells hydraulic jacks. Buyer is a construction company that regularly purchases hydraulic jacks, which it uses to install elevators. On August 1, by signed writing, Buyer contacts Seller: "Pursuant to earlier discussions with you, we have studied your Hydraulic Jack Set Model U-t. We wish to purchase ten units of this particular model for $500,000 with delivery on September 1. We will pay within 30 days after you deliver." On August 2, Seller responds with a signed "Acceptance of offer, and Sales Confirmation" form. Seller's form included all of the terms in Buyer's writing. Seller's form also contained the following clause: "Late Charge: If by 90 days after Seller makes delivery, there remains unpaid any portion of the purchase price, Buyer agrees to pay, as a late charge, Interest on the unpaid balance for each month during which it remains unpaid." On another part of the form, "Interest" is defined to be triple the prevailing market rate. In this industry, interest as such, never mind at triple the market rate, is rarely, if ever, charged for late payment. Buyer's writing did not include this clause. Seller sends the form to Buyer, and Buyer quickly receives i

Choice B is correct. Here, you undertake a "battle of forms" analysis. Neither the offer nor the acceptance are "expressly conditional," and the contract is between merchants. As such, the additional term in the seller's form comes into the agreement unless it falls afoul of 2-207(2). It passes the tests under sub-(a) and sub-(c), but given the radical difference between the industry practice (and therefore a "surprise" for Buyer) and the rate charged here (possibly a hardship), the term is likely to fall out as materially altering the agreement.

Amita, Bertram and Clyde are having a coffee at a stall in Boston Common. Bertram says, "If either one of you can promise me that you can walk from here to Fenway Park in less than thirty minutes, you've got yourself $100, which I promise to pay." Amita says, "Thirty minutes is cutting it fine. Come on, let's make it two hours, eh?" Clyde says "I can do it. I promise to make it in less than thirty minutes, no sweat." Bertram raises his hand to give Clyde a high-five. Amita quickly interposes, raises her hand and shouts, "Okay! Okay! Thirty minutes! You're on!" It is her hand that slaps Bertram's. A. Contract between A and B. B. Contract between B and C. C. Contract between A and C. D. No contract.

Choice B. There is a promise inducing a promissory acceptance that involves a future act, i.e. this resembles a promise for performance but is in form at least an offer from Bertram to create a bilateral agreement. Amita makes a counteroffer when she attempts to change the terms, so as to her, in classical contract terms, the offer from Bertram would seem to have been rejected. Alternatively, she is still in negotiations with Bertram and has not yet rejected his offer ("Come on...). In any event, Clyde accepts Bertram's offer. Since the terms of the offer were for only one party to accept, this extinguishes the power of acceptance as to the other party (Amita). As such, her acceptance is moot.

Assuming the facts as stated in Question 4, supra, but suppose that in discovery it was found that whereas neither party knew the other party's meaning of the term "develop," but both parties had reason to know of the other's alleged meaning, that the contract was drafted by Mrs. Adams' husband, an accountant with her firm. The judge availed himself of all the available tools of interpretation and construction. What is the likely result of the lawsuit? A. Mrs. Adams's meaning prevails, since her husband drafted the agreement, and her firm is presumed to have been in the best position to protect its interests. B. Mrs. Adams' meaning prevails since the term is in a contract drafted by an expert witness as to her meaning. C. Mr. Joyner's meaning prevails, since Mr. Adams drafted the agreement, and the Adams firm is presumed to have been in the best position to protect its interests. D. There is no meeting of the minds, so the court will not enforce a contract between the parties.

Choice C is correct. The court will likely apply a "canon of construction (see p.414-418). One of these is "contra proferentum," whereby a court will prefer "an interpretation [of the term] that is less favorable to the party that drafted the agreement." R2 206. The drafter is presumed to have protected their own interests, and so if they failed in that endeavor (here, the meaning of "develop" that is susceptible to two or more interpretations), they bear the risk of an adverse interpretation. Choice A is wrong because it states the opposite of the basis for the application of contra proferentum. Choice B is wrong because it's not really the issue. And Choice D is wrong because the parties, at this point, have performed. (Recall that if a term is material and the parties have not yet substantially performed, a court may then rule that the contract is a nullity.)

Seller manufactures and sells hydraulic jacks. Buyer is a hobbyist and a sculptor. He buys and collects hydraulic jacks, pumps, valves and cylinders for use in the construction of stunningly large sculptures. He does not trade in these products; nor does he purchase them for resale. On August 1, by signed writing, Buyer contacts Seller: "Pursuant to earlier discussions with you, I have studied your Hydraulic Jack Set Model U-t. I wish to purchase ten units of this particular model for $500,000 with delivery on September 1. I will pay within 30 days after you deliver." On August 2, Seller responds with a signed "Acceptance of offer, and Sales Confirmation" form. Seller's form included all of the terms in Buyer's writing. Seller's form also contained the following clause: "Late Charge: If by 90 days after Seller makes delivery, there remains unpaid any portion of the purchase price, Buyer agrees to pay, as a late charge, Interest on the unpaid balance for each month during which it remains unpaid." On another part of the form, "Interest" is defined to be the prevailing market rate, and a method is determined to calculate the amount. In this industry, interest at the market rate as a late

Choice C is correct. The question is almost identical to a similar question in a previous quiz. However, here, the Buyer is a non-merchant, so the 2-207 analysis stops at the first sentence under 2-207(2). The additional term is a "proposal," and since Buyer was silent and did not expressly assent to it, it will fall out.

On June 12, Ramone signed an agreement with Horst Construction Co. to tear up Ramone's front lawn and pave it over. The contract specified, at Ramone's direction, that Horst was to use a rare and expensive Italianate cobblestone. The specification clause read, inter alia, "subject to availability." A month later, after the lawn had been torn up, Horst showed Ramone samples of a stone similar to the one Ramone desired but, rather than imported from Italy, it had been quarried in Babcock, Illinois. Ramone remonstrated, then looked out of his window at the ravaged lawn. He relented. When the job was completed, Ramone sued for breach of contract and specific performance. A. Ramone will prevail because although he relented, he really didn't want the stone from Babcock. B. Ramone will prevail under a theory of actual, objective intent (he really wanted, and signed up for, Italianate cobblestone). C. Horst will prevail under a theory of objective consent, because of the "subject to availability" clause. D. Horst will prevail under a theory of subjective intent

Choice C. A is incorrect because Ramone assented to the "subject to availability" clause. Even though he "actually" wanted Italianate, he bore the risk that he might not get it.

Amanda had been thinking about giving up bartending and attending law school. She finally decided to do it, and made the necessary applications and preparations. When her Aunt, herself a lawyer, heard about the decision, she was delighted, and promised Amanda that she'd contribute $10,000 toward her education. Assume Amanda goes to law school and graduates. She writes to Aunt to remind her of her promise. Aunt replies that she's awfully glad Amanda has done well, but she's afraid she's fallen on hard times ("My clients have fled!") and can no longer pay as promised. Desperately in need of money pursuant to setting up a new law practice and relying on the Aunt's promise to undertake start-up costs, Amanda sues for the money. If litigated, what result? A. Judgment for Amanda under the benefit/detriment test. B. Judgment for Amanda under the bargained-for exchange test. C. Judgment for Aunt under a donative promises test. D. Judgment for Aunt under a "condition versus consideration" test.

Choice C. Amanda may have suffered a "detriment in fact," in that she spent money in reliance on the promise of payment from her Aunt. However, there was no bargain: Amanda's decision to attend law school preceded the Aunt's promise. As such, it might constitute "past consideration" for the promise. Under a benefit/detriment test, the same result: although there is benefit on one side (to Amanda), there was no induced benefit or detriment on the other. The promise was for her education, not her practice. In the result, the promise was gratuitous and nonreciprocal.

Assuming the facts in Question 2, supra, but suppose that when Joe is able to prove that when Martin made his offer of a lifetime job to Joe, he actually said, "If you're thinking of retiring in your sixties, that gives you at least ten years in a practice you love!" Joe accepts and moves to the practice. His performance is adequate, but he engages in an office intrigue with Martin's longtime assistant Alice. Martin is upset by this, and after a confrontation, he sacks Joe. Joe sues, and Martin claims the contract is barred by a statute of frauds. What is the most likely result? A. Joe wins, because even if the contract falls within the statute, he can satisfy the writing requirement by producing his bank statements, which show monthly electronic payments from Martin's firm. B. Joe wins, because the "lifetime" contract does not fall within a statute of frauds. C. Martin wins, because the office intrigue is reason enough to terminate even a lifetime contract. D. Martin wins, because enforcement of the oral agreement is barred by a statute of frauds.

Choice D is correct. One might have been tempted by A, but this is wrong because the electronic payments show that there was a contract but, without more, do not indicate how long the contract was for. The contract is for a lifetime, and usually this is considered "fully performable within a year." Here, however, Martin mentions a term of years, and that is usually enough to place it within the statute of frauds because it cannot be performed within a year.

Mr and Mrs Spain worked for Matt Door, a rancher. When the Spains decided to raise livestock of their own, Door agreed to furnish grass for their animals. The Spains borrowed $9,000 from the Moorcroft Bank to finance the operation and executed a note and livestock mortgage in favor of the bank in that amount. They were awarded the loan. Door was not involved in any of these loan negotiations. Eight days later, however, the bank's president invited Door to his home, where he presented Door with a proposed personal guaranty of the loan to the Spains. Loan guarantees typically precede a bank's approval of a loan and function as part of the consideration for a debtor's promise of payment. Door refused to sign, explaining that he had only agreed to provide grass for the livestock, not to guarantee a loan. "Besides, my signature would be after the fact, a worthless promise really." "I know," said the bank manager, "and of course it will never come to that. I'm sure the Spains are good for the money. Have another glass of wine." After a time, Door left the house, and vaguely remembers signing something at the behest of the bank manager. Several months go by, and the Spains default on the loan.

Choice D. Choice A might have been possible as an ex post promise of payment should the Spains default, but the word "only" is a giveaway, given that the fact that there may have been a defect in contract formation which we'll discuss further when we get to defenses/excuses. Choice C essentially says the same thing as choice A, and choice B is wrong because there is no reliance on the signature from Door for the promise of a loan from the bank to the Spains. If Door can prove that the promise to the bank lacked consideration, given that it was not "induced" by the exchange of promises between the bank and Spain and thus, at best, would function as a gift from Door to the bank (there's nothing in it for Door, after all), then he should prevail.

Matthew purchased an antique 1956 sports car and was restoring it himself. It needed a great deal of mechanical work. Matthew's friend, Nadia, came by one day whilst Matthew was working on the car. Matthew was trying to loosen a bolt on the engine when something broke. Matthew looked at the car in dismay and said to Nadia, "I paid $10,000 for this car, but I don't think I will ever be able to get it to run properly." Then he laughed and said, "I am so thirsty, I would trade this car to you for the can of soda you are drinking." Nadia laughed too and said, "It's a deal." Nadia handed Matthew the can of soda, and Matthew took a drink from the soda. Matthew then said, "I was joking, of course." Nadia insists that the parties have a contract for the purchase and sale of the sports car in return for the can of soda. Is Nadia correct? A. Yes, because Nadia formed a unilateral contract when she gave Matthew the soda. B. Yes, because Nadia formed a bilateral contract when she said, "It's a deal." C. No, because a reasonable person would understand that Matthew was joking. D. No, because the subjective intent of the offeror controls whether an offer has been made.

Correct answer is C. Issue is whether Matthew made an offer that Nadia accepted. Rule: R2 24 defines an offer as, "the manifestation of a 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." Use the "objective theory of contract" to determine whether in the circumstances Matthew intended to make an offer, per the reasonable person test.

Anita writes to Bertram, "I am eager to sell my house. I would consider $20,000 for it." Bertram promptly answers, "I will buy your house for $20,000 cash." Do Anita and Bertram have a contract? A. Yes, Anita and Bertram have a contract, since Bertram accepted Anita's offer. B. Yes, Anita and Bertram have a contract, since Bertram is willing to pay cash. C. No, Anita and Bertram do not have a contract, since Bertram's reply to Anita is a counteroffer. D. No, Anita and Bertram do not have a contract, since Bertram's reply to Anita is an offer.

D is correct. Anita's statement is an invitation to Bertram to make her an offer; she "would consider" this price, but she might consider an alternative price also. Anita has yet to make a further manifestation of assent to Bertram's response, whereupon a contract would then be formed.

As she exits the subway on her way to work, Amanda Adams, a nurse employed at Brigham Women's Hospital, passes a middle-aged man wearing shorts and sneakers in evident distress lying on the sidewalk. People have gathered, staring and wringing their hands. Amanda, who always carries a first aid kit, kneels and administers an AED and CPR, which saves his life. The crowd cheers as the man revives and declines to get onto the stretcher provided by the EMT, which has just arrived on the scene. The man turns out to be Dick Durbin, the son of Boston's most famous billionaire Dang Durbin. Dick asks Amanda her name, thanks her, then goes on his way. A few days later, Amanda receives a letter in the mail. The letter is addressed to her, care of the hospital. It is from Dang Durbin, thanking her for saving his son's life and promising a lifetime annuity, paid per month, for her services. Enclosed with the letter is a check for $10,000. Amanda takes the letter and the check to her bank, and both are verified as authentic. Amanda cashes the check. A month later, Amanda receives another check for the same amount. News of Amanda's Good Samaritan gesture and reward spreads across the internet and the

D is correct. The consideration for the promise is in the past, and does not revive any legal obligation (infancy, debts discharged in bankruptcy, or statute of limitation) that would enable enforcement of a promise based on "moral obligation." The fourth exception to the general rule of nonenforcement of moral obligation promises, the "material benefit rule," would not seem to apply in these circumstances, particularly since the benefit did not accrue to Dang himself. See R2 86 illus. 1. Could Amanda prevail on a theory of reliance? Consider Plowman: if this was a gift promise, then Amanda would have to show detrimental reliance in order to recover under R2 90. Even the payments (part performance of the promise) may simply act as acceptance or ratification (ex post) of a gift.

Lucy Lee, an art collector, writes the following email to Grant Gilmore, a prominent art dealer: Dear Grant: As you know, I own four oil paintings by Warren Wyatt, entitled "Spring," "Summer," "Autumn," and "Winter." Because I am temporarily in need of immediate funds for another project, I'm offering to sell all my Wyatts to you for a total of $280,000, delivery and payment to be made within one month. As you know, the paintings were recently appraised at $300,000. Please let me know if you accept my offer. - Lucy Lee Grant immediately writes back to Lucy: Lucy: That's great news! I accept gladly. I'll be in touch shortly to work out the details. - Grant In the discussions that follow, Grant tells Lucy that for his $280,000 he expects to receive not only the four oil paintings mentioned in her email but also a set of six small water-color sketches by Wyatt that Lucy owns. Lucy denies that she intended to include those in her offer and correctly states that the six sketches themselves have been valued at more than $500,000. Would Grant be likely to succeed in an action to obtain the oil paintings and the sketches for $280,000? A. Yes, because Lucy's written offer clearly stated "all my W

D is the best answer. From the available information, it appears that the oil paintings and sketches together would be worth at least $800,000. To sell them for only $280,000 would be clearly an irrational bargain and it appears that Grant should have known that. Answer C is also a plausible answer because under a standard maxim of interpretation, the listing of specific items will define a more general item. The maxims, however, are often viewed by the courts as not being controlling and they tend to lend themselves to use by both sides to a dispute. That is why D is a better answer. Answer E is not a good answer because Grant should have been aware of Lucy's meaning and therefore would be bound by it under the Restatement (Second) of Contracts § 201(2). Answer A is incorrect because it improperly reads the language "all my Wyatts" in isolation, something even textualist courts reject. While the phrase "all my Wyatts" does support Grant's interpretation, the textual and extrinsic evidence for Lucy's reading is much stronger. Answer B is incorrect because the rule of "contra proferentem" is not applicable for two reasons. First, the contract is not a formalized agreement with drafting attributable to one party. Second, the rule of construction against the drafter is a rule of last resort, typically used only when other means of interpretation do not resolve the dispute.

Suppose that Niles was a precocious 16-year old who was, in Moses's opinion, a bit toofond of cold beer, high stakes, and fast cars. Moses promised to will the chinchilla ranchto Niles if Niles would refrain from drinking and gambling and avoid speeding tickets forthe rest of Moses's life. Niles promised to refrain from drinking and gambling and toavoid speeding tickets for the rest of Moses's life.Did Moses and Niles form a contract obligating Moses to amend his will to leave thechinchilla ranch to Niles? A. Yes, because Niles's promise to refrain from activities that were not illegal, and inwhich he might otherwise have engaged, was a legal detriment to Niles. B. Yes, because Niles's promise to refrain from drinking, gambling, and speeding forthe rest of Moses's life was the consideration Moses sought in exchange for hispromise to will the chinchilla ranch to Niles. C. No, because Moses did not benefit from Niles's promise to refrain from drinking,gambling, and speeding for the rest of Moses's life. D. No, because Niles's promise to refrain from drinking, gambling, and speeding forthe rest of Moses's life was not the consideration Moses sought in exchange forhis promise to will the chi

D is the best answer. The question is not whether Niles's promise to refrainfrom drinking and gambling and to avoid speeding tickets for the rest o Moses's lifewould have been valuable consideration per se. [...] consideration may take the form ofa return promise, R2 ss71 and 75, provided that what is promised would itself beconsideration: R2 s75. The question is whether Moses bargained for Niles's returnpromise. Moses did not ask Niles to promise to refrain from the specified vices for theremainder of Moses's life. Moses asked Niles to actually refrain from those vices.Niles's promise was not consideration because Moses did not seek it in exchange for hispromise to will the chinchilla ranch to Niles. See R2 s.71(2). Therefore, Answer D is thebest answer, and answer B is incorrect.

On January 13, 2002, A sends B a written offer to sell 10 trailer houses for a total of$12,000. A promises to keep the offer firm for "a reasonable time." The offer languishesin B's files for several weeks as he sets about determining the resale value of the trailerhouses. On April 20, 2002, B sends an acceptance letter to A, which states in part, "Ieagerly accept your offer to buy the houses for $1000 each." Is there a contract? A. Yes, since the firm offer becomes a regular offer even after 90 days. B. Yes, since B accepted "eagerly." C. No, the offer's irrevocability has been lost. D. No, since B's acceptance is a counteroffer.

D. Answer C is wrong because B could still have accepted even after 90 days, i.e.as a regular offer. R2 39.

Beautiful World Vending Co. (Beautiful World) entered into negotiations with KofiAthena (Athena) to place its cigarette vending machines on Athena's premises,specifically within the lobby of his discothèque in TriBeCa. The parties agreed to all thematerial terms except for the fee. They did, however, include in the memorandum ofagreement that Beautiful World would have the right to set commission rates. WhenAthena refused to permit Beautiful World to set up its machines as agreed, BeautifulWorld sued. Athena cited a common law case (Walker v. Keith) for the proposition thatunder the common law, there was a presumption against enforcement of "agreements toagree" that did not specify a price term, since such agreements lacked mutuality.Beautiful World in turn invoked by analogy Article 2-305 of the UCC. On this issue,who's right? A. Athena: the parties failed to agree on a specific price, thus no contract came intoexistence. B. Beautiful World, under the "pre-acceptance reliance" doctrine. C. Athena: without a set price, the preliminary agreement itself is "fatally illusoryand void for lack of mutuality." D. Beautiful World: the common-law presumption is rebutted by the price-settingprovis

D. You'll notice that answers A and C are pretty much a repetition of thedefendant's position.

Assuming the facts as stated in Question 1 (supra), but suppose instead that before the purchase of the first shipment of 250 units from Allen, Beta's floor manager (at its operating plant) called her counterpart at Allen and relayed the following message: that she believed her company, Beta, was "playing hardball" and might really be interested in purchasing Allen's prototype rather than Carrot's; that Beta would eventually agree to purchase the full 30,000 required by Allen because its product was "superior" to the Type Z produced by Carrot; and therefore, that Allen would be wise to produce sufficient quantities to fulfil an anticipated order of 30,000 from Beta. The following week, as noted in Question 1, Allen ships the consignment of 250 units. This consignment accepted and paid for, but the subsequent shipment of 250 units is rejected by Beta. Allen sues. In court testimony, Beta says that the floor manager at Beta had absolutely no authority to "bind" Beta in any negotiations with Allen to purchase Type Z product; that she was only expressing her opinion. What result? A. Contract. Even if the floor manager had not actual authority, she had apparent authority to bind the partie

Here, the issue is whether the representations of the floor manager indicated that the parties (secretly, notwithstanding their conduct as manifestations of assent or the lack thereof) intended to enter an agreement for Beta to purchase 30,000 units from Allen. Does Beta's purchase order "ratify" the floor manager's representations to a similarly placed officer at Allen? The representations themselves were rather vague, such that ratification would seem to rest on a slim reed. It should be noted that 2-204 presumes a search for intent on an "interchange [of] correspondence" and not on mere speculation, particularly in a context (sale of goods) where contracts may be formed in any manner and at any time, so long as intent is shown. As such, the dispositive issue remains whether or not, on these facts, the parties have an agreement for the sale and purchase of the Type Z prototype. Choice D is the best response.

On March 1, Olivia contacts Bob and expresses interest in having him install a swimming pool in her backyard. On March 3, Bob responds with a signed written offer to build the pool. In the offer, Bob specifies price, timetable, and all other relevant details. As for scheduling, the offer provides that Bob will begin work on April 1 and complete it by April 15. He writes, "I have only those 15 days in which to install your pool, and I can only install one pool at a time. I am filled up with commitments before and after that period. You have one week in which to respond." On March 4, Olivia learns from her neighbor, Nancy, that Nancy and Bob have formed a contract for the installation of a swimming pool on Nancy's property, with Bob to begin on April 1 and finish by April 15. Immediately on that same day, March 4, Olivia sends a signed email to Bob, stating, "I accept your March 3 offer." In response, Bob advises Olivia that his offer is no longer open - that he has committed April1 - April 15 to building another party's swimming pool. Olivia maintains that Bob is in breach of contract: that he made her an offer on March 3, gave her one week in which to accept, and that within one week sh

Issue in this mutual assent case is whether or when an offer can be revoked. The rule provides that in general an offeror may revoke her offer at any time before the offeree accepts it. See R2 43, which provides, "An offeree's power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect." Thus, the best answer is B. Choice C misstates the law. Choice D describes a common law rule that does not apply to the facts (since the offer was in writing, and not pursuant to a conversation). Also, no "option contract" was formed without some sort of consideration provided in order to keep the offer open (for a week). And Choice A draws the wrong conclusion.

Peter, a suicidal heroin addict, is admitted by his family, against his will, to a drug treatment clinic and given tranquilizers. In a moment of lucidity, Peter rages against his wife, his parents, and all of those he suspects of colluding in his confinement. The nurses on hand give him more drugs to calm him down. A week into the detox treatment, a nurse presents a release form for Peter to sign. The release is a promise, by Peter, to pay for treatment received at the clinic. Peter refuses to sign. The nurse threatens to donate his personal effects to charity. Peter relents and signs. The next morning, Peter is released from the institution. A week later, Peter receives a bill from the clinic for the treatment he received there. Peter refuses to pay, arguing he received the treatment against his will and signed the release under duress. After collection efforts have failed, the case goes to trial. The court rules that the clinic was not an "officious intermeddler." Of the following, which is the most likely theory of the case? A. The clinic will prevail, only because Peter signed a release and he is therefore contractually bound to pay. B. The clinic will prevail, because it bestowed

Issue is whether the clinic can recover from Peter for benefits bestowed and unpaid for either on a theory of contract or unjust enrichment. Whilst the clinic did secure a release from Peter, it was belated (after the treatment was essentially complete), leading to a possible "past consideration" argument (rebuttable), and was secured "under duress," a possibly vitiating factor in relation to contract formation (as is the argument for mental incapacity). As such, choices A and C may be "correct" but not the best or most likely result. Restatement (First) of Restitution §116 and R(3)R §20 (pp. 286, 290) maintain that even without defendant's consent, plaintiff can recover in restitution if all the other elements are met (nonofficious intermeddler, expectation of payment, and benefits bestowed and unpaid for). As for Choice D, see the Crisan case, p. 289: plaintiff may recover the reasonable value of the services despite evidence that the recipient "ultimately did not benefit." Choice B is the best answer.

Trucker visits Mechanic's facility and tells her his truck engine needs an overhaul. Mechanic says that the service charge alone for an overhaul is $15,000. Trucker agrees to pay that amount. Mechanic then presents Trucker with a pre-printed form entitled, "Contract for Engine Overhaul." In a blank space that appears after the words, "charge for service will be $___," Mechanic inserts, "$15,000." The pre-printed portion of the writing includes this text: "Customer will pay for all parts used in connection with the work to be done." The form contains space for listing the cost of parts and a total price, which are both left blank. Mechanic signs the writing and gives the form to Trucker. Mechanic says, "Please read and sign this." Mechanic turns away to help another customer. Trucker signs the form without reading it. Mechanic completes the overhaul. She presents Trucker with a bill, showing a charge of $15,000 for labor, and $3,000 for parts. Trucker refuses to pay the $3,000 for parts. Can Trucker avoid paying the $3,000 for parts? A. Yes, because the law imposes a duty on reasonable business people to orally explain any written agreement. B. Yes, because a party cannot be held to a c

Issue: can a party be held to a contract's terms if he signs a writing without reading it? Rule: under the manifest assent theory of contract formation, one who signs a contractual writing is bound by its terms whether she has read them or not. There are exceptions to the rule, such as when a party signs a contract under circumstances that would lead to a defense of fraud, duress, unconscionability, or mistake. The "duty to read" actually represents a more fundamental rule: that contracting parties are bound by the intentions each party reasonably attributes to the other. It thus expresses the "objective theory" of contract formation. Thus, under the rule, Trucker is bound by the terms of the writing that he signed even though he did not read the writing. Nothing in the facts shows that Mechanic intentionally deceived Trucker. The pay-for-parts provision was disclosed on the form and Mechanic asked Trucker to read it. Choice C is correct.

On January 1, Accountant sent a letter to each of her clients offering to prepare their tax returns by April 15, the tax deadline. The letter stated the services that she was offering, the rates she charged, and a list of documents that she would need from the client to prepare the tax return. The letter stated, "If you want to hire me to do your taxes by April 15, then you must let me know and send me all of your tax documents by February 15." Laura is one of Accountant's clients and received Accountant's letter. On March 1, Laura called Accountant asking her to prepare her tax returns. Accountant replied, "I am not sure that I can do that. I needed your documents earlier, and I have many commitments between now and April 15." Laura sent Accountant by overnight mail copies of her tax documents and a signed letter that stated, "I accept your offer of January 1. Enclosed are copies of my tax documents. I look forward to having my taxes prepared by April 15." Accountant did not respond to Laura's letter and did not prepare Laura's taxes by April 15. Laura brings a breach of contract claim against Accountant. Which of the following is the most accurate statement about the outcome of Laura

Issue: this problem tests the common law rules of mutual assent, specifically the power of acceptance (see Lonergan and cases following). In a mutual assent problem, examine each communication/event chronologically and then evaluate the legal effect, if any, of the communication. Dispositive here is the February 16 deadline specified as a term of the offer from Accountant. Since Laura missed this deadline, her power of acceptance was terminated, and no contract was formed despite her subsequent efforts. If, then, one can characterize Laura's March 1 phone call as an offer to Accountant, nothing in her response suggests a manifestation of assent or acceptance. She is also, however, not outright rejecting the offer. So the subsequent communications should be examined to see whether any contract formed. Accountant's nonresponse to Laura's overnight mailing meant that she did not accept Laura's offer, and no contract was formed. Therefore, C is the best answer.

Mrs. Adams, a lessor, owns a large, undeveloped plot of land. Mr. Joyner, a lessee, is land developer. The parties agreed that Mr. Joyner would lease and develop the plot to create a new residential neighborhood. It was understood by both parties that the term "develop" within their agreement involved grading, paving and installing utilities. But it turned out, after substantial performance of the contract, that they had different understandings of whether the phrase "all portions deemed lots" merely required the lessee/developer to partition the land into separable lots that were ready for construction (Joyner's meaning), or required that buildings actually be under construction on each lot (Adams's meaning). The contract included an escalation clause (a reduction of the contract price for every day that performance was incomplete by a date certain). The clause would be triggered if, by September 15th, lessee had not completed the work. Joyner would be paid the full contract price less the "penalty" for late completion. The parties signed the agreement. By September 15, Mr. Joyner had completed all the grading, paving and utilities work on all the plots. He had also laid the foundation

NOT D

Rebecca Ray is the CEO and chief stockholder of a company which operates a successful online dating service, "Dates with Destiny." Two weeks ago, when Rebecca was dining out with friends at a local seafood restaurant, she got a fishbone stuck in her throat. Making the throat-clutching gesture to signal choking, she attracted the attention of Myles Marlin, a real estate salesperson from out of town who was visiting local friends. Being familiar with the Heimlich Maneuver, Myles was able to assist Rebecca in dislodging the bone and breathing normally again. She thanked him profusely for saving her life at a time when her companions and the others around her seemed unable to be of assistance, and asked for his mailing address, so that she might send him a proper note of thanks and a suitable reward. He protested that it was really nothing, anyone would have done the same, but he did give her his business card, with an email and mailing address. Five days later, Myles received in the mail a thank-you greeting card, along with a check from Rebecca, made out to him, in the amount of $10,000. Written on the card was the message "Thank you - I owe you my life!! And here is my reward for you. - R

Of the four possibilities, Answer B is the most likely outcome. A is not correct, because the mere fact that a promise is expressed in writing does not make it enforceable in the absence of consideration. Answer C does not apply because Rebecca did not make an "offer" to Myles; she made a gratuitous promise, not proposing the formation of a contract. Answer D may be a statement of desirable public policy, but the common law of contracts does not adopt that policy as a rule of law. It is possible that a court would be willing to consider the application to this case of the rule stated in Restatement (Second) of Contracts § 86 (inspired by the Webb case), permitting enforcement of a promise made in recognition of a benefit conferred—a possibility not considered by the four answers proposed for this question—but the case law adopting § 86 is sparse, and the facts of this case are nowhere near as compelling as those of Webb.

South searched online for a wholesale producer of specialty fabrics and found something interesting within the local market: a company called North Specialty Fabrics Inc. On September 5, 2022, South downloaded its own boilerplate "purchase order" form, filled out the blank spaces to request the following from North: 3,000 reams of high-count cotton fabric for delivery to its clothing factory no later than September 25, for a total price of $10,000. South then signed and scanned the form to North via email, with a note in the message box: "Please see attached order for your product. Please sign and return promptly if interested in accepting our offer." On September 6, North mailed to South its acceptance. "We're delighted to serve you," said the message box, signed by one Lisa Danvers, Sales Representative. Below her name and "e-signature," within the body of the email, was the title, "Order Acknowledgement." Below the title were the words, "This acknowledgement is expressly conditional on the buyer's assent to the additional or different terms contained herein." The email then listed the terms to match the purchase order. Below these common terms, the email/acknowledgement form listed f

The correct answer is B. South's acceptance was indeed a counteroffer - note the language of express conditionality that tracks the UCC 2-207(1) for acceptances. As such, a contract was formed not under 2-207(1) by the exchange of documents but by their exchange of performances. To determine the terms in the agreement, the "agreed terms" (or alternatively, the knock-out rule) approach under 2-207(3) governs. Since the term in dispute is not present in both documents (it is not in the PO) but only in the OAF, it is not an "agreed term." There is no UCC gap-filler that would "fill in" a limited liability clause, and so this provision would fall out. South is therefore correct.

Martin had been trying for several years to persuade Joe to join his admiralty practice. Joe had hesitated in part because he thought he was close to making partner at a large downtown law firm. His heart, however, had always belonged to admiralty law. One day, Joe makes inquiries at his firm, and discovers that his chances of making partner are about 50-50, certainly not as great as he had thought. A few nights later, Joe meets Martin for a drink at their favorite bar. Martin once more brings up the possibility of Joe joining his firm. Ultimately, according to Joe, what persuades Joe is Martin's oral promise of a lifetime job with his firm. "You will be doing something you love for the rest of your life," says Martin. Joe accepts Martin's offer of a job in his firm and the following day quits his big firm practice. After eighteen months in the small firm, it becomes clear to both men that they have grossly overestimated their capacity to work together. Martin and Joe get into a huge argument one day, and Martin asks Joe to leave. Joe is now unemployed, and he sues Martin for wrongful termination. At this point, they had only an oral agreement between them. Martin raised the statute of f

The issue here is whether defendant can assert the statute of frauds as a defense against enforcement of an oral employment agreement. In effect, Joe is saying: we have an oral agreement that is valid because lifetime (or indefinite duration) agreements are not within the statute of frauds since they can, potentially, be performed within a year. Thus, your oral promise of a lifetime employment contract has been breached, and I have been damaged. You owe me reasonable compensation for the "life" of the contract (from formation to expected retirement). Choice C is wrong because Joe can win under contract; choice B misstates the rule as it applies to Martin. Choice A is correct.

Alice lives on her own in Chicago and works as an attorney specializing in wills and trusts for a large law firm. Her widowed father, Michael, lives on a farmstead in Idaho. Michael is diagnosed with prostate cancer in an advanced stage. He calls his daughter on the phone and assures her that if she would come to work for him on the farmstead, he would bequeath to her the land, worth $1 million. Alice moves to the farm and works for her father for several years. During that time, she had ample opportunity to ask her father to reduce his "promises" to writing but did not do so. When Michael dies, it was found that he had disinherited his daughter. She sues the estate, arguing that Michael "induced" her to come work on the farm. What is the most likely result? A. Alice will prevail, on a theory of contract. B. Alice will prevail, on a theory of promissory estoppel. C. The estate will prevail, since Alice's reliance was unreasonable, given her education. D. The estate will prevail, since there was no promise made to Alice.

The issue here is whether or not an "inducement" can be characterized as a promise, the predicate for a finding of contract or, alternatively, enforcement under a theory of promissory estoppel. The facts are based on the Bouton v. Byers case on p.221, the issue being the "reasonableness" of the reliance. Recall that for a court to enforce a promise, it must find either an express or implied promise. Alice alleges she was "induced" to move from her home to her father's farm; in similar cases (e.g., Greiner v. Greiner; Kirksey v. Kirksey), the conduct of the promisor "implied" a promise where no express promise was made. Same goes for the Harvey case. In addition, the reliance here seems substantial. The only question, raised by the trial court in the Bouton case, was whether the daughter's reliance was reasonable, given that her training should have required her to insist upon a written document to protect her interests. The appeals court in that case noted, however, that to so rule would be to say, as a matter of law, that familial promises would not be enforced unless they resembled "a joint venture for business advantage." The best choice is B. Choice A is a close second. Here, it would seem that unlike the other familial donative promises, the promisor receives a benefit, by way of the work the daughter provides on the ranch. What is implied (and should have been included in the facts) is that there is a contract for services ratified between father and daughter (she's not working for free). There is no agreement as to the conveyance, however, or compensation for the loss of income in giving up a lucrative career as a lawyer/professor. It's this loss, the reliance interest, that she seeks to recover. Later, we'll learn that for the conveyance there has to be more than "inducement," but also a writing that "satisfies" the statute of frauds.

Amita promises Ben, a workmate, that if Ben would pick up Amita's weekly paychecks, along with his own, from Payroll (upstairs) every Friday, Amita will pay Ben a .5% commission on her salary at the end of each month. Ben says, "Why would you want to pay me to pick up your check? This sounds like a joke." Amita says, "No, I'm serious. But I don't want you to promise you'll do it. Just do it and I'll pay the commission." Ben says, "Sure, okay, I'll do it." At this point, do Amita and Ben have a contract? A. No, since Amita has not made an offer under a theory of "further manifestation of assent" upon her part, should Ben perform. B. No, since Ben has not accepted Amita's offer. C. Yes, since Ben is persuaded that Amita is serious, and the parties have effectuated a "meeting of the minds." D. Yes, since Ben is persuaded that Amita is serious, and the parties have manifested an intent to be bound.

The issue here is whether the elements of contract formation were all satisfied, including whether the agreement between Amita and Ben is supported by consideration. The offer from Amita clearly indicates that she seeks a return performance rather than a return promise. As such, until Ben performs, they do not have a contract under a theory of unilateral contract formation, and Choice B is correct. Ben's performance will supply the necessary consideration to support the formation of a contract.

John joined B Inc as a Project Manager at the age of 63. He is an at-will employee. Two years later, John tells his supervisor Joe in passing that he is getting "long in the tooth" and thinking of retiring soon. Joe says, "You are such a valued project manager!" A month later, Joe presents John with a retirement package. The parties discuss the fine points, and Joe points to language that says B Inc promises to pay John "a pension for life, in consideration of your valuable service to the company." John signs the agreement and retires that same year, receiving a monthly check at half his salary. With a change in management the following year, however, the amount of the payments is halved and disbursed every other month, allegedly as a cost-cutting measure. John sues under breach of contract. B Inc. demurs, saying that Joe is not on the Board of Directors and had no authority to make the promise of a lifetime pension, and in any event the so-called "pension" is at best a gift, not a legal obligation. On these facts, how is the court most likely to rule? A. For John, since by now he has relied on the promise and has irreparably changed his life. B. For John, since he negotiated the retire

The issue here is whether, given the sequence of events, John can claim under promissory estoppel. This requires a close analysis of the facts in order to distinguish them from other similar cases, such as Plowman v. Indian Refinery, and Katz v. Danny Dare. Here, as in Plowman, John's performance is "past consideration" for a promise made to him by B Inc. For John to provide good consideration, his retirement must be the quid pro quo for the promise. Here, it does not appear to be B Inc.'s promise that then induced him to retire; he was already contemplating retirement after only two years on the job, and the manager was privy to this information. There was no nexus, at least on the facts we are given, that John left because of the promise of a pension. This case resembles Hayes v. Plantations Steel (notes after Katz, pp.240-241): there, the plaintiff announced that after 25 years he was retiring, effective in six months. An officer then promised to "take care of him." The court ruled that Hayes failed to show either consideration for the promise or that the promise induced detrimental reliance, since "his decision to retire preceded the promise," p.241. As such, choice D is correct.

Allen Inc. makes and sells high quality widgets (Type X), and Beta Corp. has been purchasing these widgets from Allen Inc. for two years. Commercial standards of the business determine their course of dealing: price, quantity and delivery terms were routinely specified in the Purchase Order Form from the buyer (Beta), and the Order Acknowledgement Form from the seller (Allen). Beta enters into discussions with Carrot Company to purchase a test sample of Carrot's Type Z prototype. Upon learning of this, Allen offers to sell Beta its own version of the Type Z prototype, but requires Beta to agree to purchase a minimum of 30,000 units. Beta says it can only afford 10,000 units, and the negotiations stall. The two parties continue to purchase and sell the Type X product. The following week, Beta purchases 500 units of Type Z prototype from Carrot. Allen quickly sends a price index with discounted prices for its Type Z product, but once again stipulates that an agreement is contingent upon Beta purchasing a minimum of 30,000 units. As a further inducement to agree to purchase the product, Allen ships 250 units to Beta and Beta accepts, with payment at the discounted price. When Beta refuses

The issue is contract formation under the UCC Article 2. The question is loosely styled on the facts in the Styberg case. Allen seems to have at least a colorable claim that the parties intended to form an agreement, but there is even less evidence on these facts than in the Styberg case. The parties are negotiating for the purchase of Type Z product from Allen, but they break off negotiations before any agreement is reached: even under the liberal rules of 2-204, such that "even though one or more terms are left open a contract for sale does not fail for indefiniteness," a contract is formed only "if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy." Thus, two things fail the test in this case: first, there is no evidence that the parties intend to enter a contract for the sale of the Type Z units. Beta does not submit, as is its usual practice, a purchase order for 30,000 or even 10,000. Second, an essential term is missing, one that would enable the court to "give an appropriate remedy.". What then becomes of the subsequent sale and purchase of 250 units? Seller argues this constitutes an "acceptance" of its offer via part performance. But its offer has already been rejected, so this doesn't work. Could it be "part performance" of the buyer's offer of purchase, with shipment constituting seller's acceptance? Nothing in the facts suggests that the shipment and acceptance are contingent on an agreement to purchase more than the shipment itself; the course of dealing between the parties seems to be on a basis of specifying each term within the exchange of documents, and here they only reflect the actual consignment. (Alternatively, in the language of Styberg, "Eaton's two requests for 240 I-brakes, one of which was cancelled, did not come close to the repeated, ongoing dealing that proved a contract [for the sale of the new product]." Finally, Beta's conduct with Carrot was inconsistent with an implication of intent to form a contract with Allen. Beta did not, in the language of Article 2-204, act as if it "recognized the existence of a contract" with Allen, but the call of the question in choice D goes too far. All things considered, the

Ally, a resident of Palo Alto, CA, had some flowerpots on her windowsill, in which she grew an especially strong variety of hemp. Baba, a sensitive neighbor, frequently got high (elevated dopamine levels) from the plants' aroma wafting into his rooms. Although Baba enjoyed it, he was fast becoming addicted, rushing home from work at odd times in the day to sit vacantly by the window. One morning, deciding the distraction was becoming too disruptive in his life, he knocks on Ally's door, and they have the following exchange: Baba: "Get rid of those plants right now. If you don't, I'll report you to the authorities. You know it's illegal to grow hemp in this state, don't you?" Ally: "Really? Actually, it is legal in this state, but I didn't think anyone cared. Ok sure, I promise to get rid of them." Baba is happy. Several weeks go by, however, and Ally has failed to remove the plants. Baba's addiction to the hemp aroma has now grown so acute that he has missed too many hours. He eventually gets sacked. Assume it is in fact legal to grow hemp in California. Baba sues Ally under contract, promissory estoppel, and tort. What are his chances of success on the contract and promissory estoppel

The issue is whether all the elements of either contract formation or promissory estoppel are present to allow Baba to prevail against Ally. Ally gives assurances that she will remove the plants, but Baba provides no consideration for what, in the light most favorable to the claimant, may be characterized as a "promise." His threat (and query whether a contract secured on the basis of threat, which we'll discuss when we get to defenses later) is in any event empty, since it is legal to grow hemp in this state. Baba's subjective belief that it is illegal is irrelevant. Thus, he gave up nothing to secure her promise to remove the plants, and she gave the promise without, given her knowledge, expecting any change in position on his part. Choice A is correct.

Anouk submitted a notice in the online village blog (rather like craigslist) that read, in relevant part, "Authorized to sell five relatively new iPhone X models at $50 each! Cash only, first buyer first served!" Anouk provided his home address. Aimée saw the ad moments after it was posted and quickly wrote an email to Anouk that read, "I accept your offer! I will buy all 5 models at stated price! I'm coming over!" Meanwhile, Anouk's neighbor Amita, who was standing next to Anouk as the latter received the response from Aimée on his cellphone, took out her purse and tendered $250 cash in exchange for the models, which Anouk accepted. Anouk writes back: "Sorry, I just sold them." Aimée sues. Under the classical rules of offer and acceptance, A. Anouk's email giving notice of revocation terminates Aimée's power of acceptance. B. Anouk's acceptance of the cash from Amita is an attempted revocation, but Aimée will prevail under the mailbox rule. C. Aimée's acceptance was timely, and it would be unfair if Amita prevailed since she had the advantage of being in the house with Anouk at the time. D. Aimée's email was an offer, which was not accepted by Anouk.

The issue is whether the advertisement could be considered an offer, or merely an invitation. If an invitation, then choice D would be correct. However, the language tracks the Lefkowitz case ("first come, first served") highlighted in the casebook notes, and establishes the proviso that "[T]o make an offer by an advertisement...there must ordinarily be some language of commitment or some invitation to take action without further communication." Since Anouk made an offer, he created a power of acceptance for Aimée. The offer has conditions, though: cash only, and "first come" suggests unilateral contract (performance demanded) rather than return promise. The next issue whether or not the offer was timely accepted by Aimée. The mailbox rule would help were this an offer to create a bilateral agreement, which it is not. Choice A is therefore the best response.

AnnCo, a subcontractor of gravel supplies, submits an oral bid to BartCo, a general contractor, which BartCo uses in its competition for a government award to build a road. Before BartCo has a chance to inform the sub of BartCo's award of the government contract, AnnCo calls up and withdraws the bid, stating that it had made a mistake in the calculation of the gravel per ton. Under the current law, who would prevail on a suit at trial? A. AnnCo, since no bilateral agreement was formed by mere use of the bid by BartCo. B. BartCo, since an option was created with the use of the bid. C. AnnCo, since promissory estoppel does not apply on these facts. D. BartCo, under a theory of unilateral contract formation.

The issue is whether the sub can withdraw its bid without liability toward the general, since the general has used the bid in its own application for the government contract. In James Baird v. Gimbel Bros., Judge Hand agreed with the sub (defendant) that its bid was merely used by the general, that the general had not "accepted" its bid even though it had used it, that there was no mutuality of obligation, and so the sub could withdraw the bid without being held liable. Neither a contract nor an option was created by the use of the bid. In Drennan, however, a case closely resembling the facts in Baird, the opposite holding maintained that the use of a subcontractor's bid by the general contractor created an estoppel: the sub could not simply withdraw the bid once it was used. The use of the bid created an irrevocable offer (to supply the product at stated cost), i.e., an option contract, to the extent that a general contractor had reasonably relied upon the bid. As Judge Traynor put it, "Reasonable reliance resulting in foreseeable prejudicial change in position affords a compelling basis ... for implying a subsidiary promise not to revoke an offer for a bilateral contract," at 265. In short, whilst an option was not created by consideration, reasonable reliance binds the promisor to its promise. Choice B is correct. Choice D would be true if the use of the sub's bid were the performance, as such, requested by the general (it is not), toward the formation of a true unilateral agreement. See R2 45.

A year ago, Ashley Anderson was a high school senior, making plans to attend college. She was accepted at a community college in her hometown, and also at a large private university, Stepford U. Initially, Ashley planned to attend the local college because of the high cost of attending Stepford, but her Aunt Ivy (her mother's wealthy sister, who had attended Stepford herself) urged Ashley to attend Stepford even if it did mean Ashley would incur a larger burden of student debt. When Ashley hesitated, Aunt Ivy promised Ashley (in a written email note) that she (Aunt Ivy) would pay Ashley's tuition at Stepford for her sophomore year if she finished the first year at Stepford with a grade point average of 3.0 or better. Ashley agreed, p. 333and attended Stepford for her first year of college with some financial help from her parents and the benefit of substantial student loans. She finished the year with a 3.4 GPA. When she notified her Aunt Ivy of that achievement, Ashley received the following response: Ashley: I'm delighted to hear of your excellent work at Stepford this past year. I'd like to help with your tuition this coming year, but some of my business ventures require additional at

The principle of restitution requires that Megan repay the money that was paid to her by mistake. This type of obligation is often referred to as an "implied-in-law" contract, or sometimes "quasi-contract." It does not depend on the making of a promise, but rather on the law's desire to prevent unjust enrichment. This is true whether the mistake was her fault or not, so Answer C is incorrect. Answer A states the correct result, but not the correct reason: Megan would be liable to repay even if she had not promised to do so.

Megan Murphy went shopping last Monday at a local bookstore and bought several books for herself and as gifts for her friends, at a total price of $92.58. She paid in cash, with five 20-dollar bills, and received back some bills and coins, which she put in her purse without looking carefully at them. When she got home she found a message on her land-line phone from the clerk in the bookstore (which had her number on file from prior ordering requests) saying that Megan had apparently been accidentally given a $50 bill in change, instead of a five. Megan looked in her purse and found a $50 bill there which had not been there earlier. Megan called the store, spoke to the clerk, confirmed the error, and said she would be in the store later that day to refund the extra amount. Which of the following is the best description of her legal position? A. Megan is obligated to pay the store $45 only because she promised to do so. B. Megan is obligated to pay the store $45 because otherwise she would be unjustly enriched. C. Megan is not obligated to pay the store, because the mistake was not her fault, and she got no consideration for her promise to repay.

The principle of restitution requires that Megan repay the money that was paid to her by mistake. This type of obligation is often referred to as an "implied-in-law" contract, or sometimes "quasi-contract." It does not depend on the making of a promise, but rather on the law's desire to prevent unjust enrichment. This is true whether the mistake was her fault or not, so Answer C is incorrect. Answer A states the correct result, but not the correct reason: Megan would be liable to repay even if she had not promised to do so.

Seller manufactures and sells hydraulic jacks. Buyer is a construction company that regularly purchases hydraulic jacks, which it uses to install elevators. On August 1, by signed writing, Buyer contacts Seller: "Pursuant to earlier discussions with you, we have studied your Hydraulic Jack Set Model U-t. We wish to purchase ten units of this particular model for $500,000 with delivery on September 1. We will pay within 30 days after you deliver." On August 2, Seller responds with a signed "Acceptance of offer, and Sales Confirmation" form. Seller's form included all of the terms in Buyer's writing. Seller's form also contained the following clause: "Late Charge: If by 90 days after Seller makes delivery, there remains unpaid any portion of the purchase price, Buyer agrees to pay, as a late charge, Interest on the unpaid balance for each month during which it remains unpaid." On another part of the form, "Interest" is defined to be the prevailing market rate, and a method is determined to calculate the amount. In this industry, interest as a late charge is a standard practice; however, Buyer's writing did not include this clause. Seller sends the form to Buyer, and Buyer quickly receives

This is a battle of the forms problem under UCC Article 2-207. The battle illustrates a difference between the UCC Article 2 and the common law. Under the common law mirror image rule, a purported acceptance with an additional term is treated as a counteroffer. However, under 2-207(1), "a definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon." Since this transaction involves the sale of goods (hydraulic jacks), it is covered by UCC Article 2. Buyer made an offer and Seller manifested an intention to agree to all of the terms of Buyer's offer. Under 2-207(1), a contract is considered to have formed even though Seller's form contained a different term. Does this term become part of the contract? See the first sentence of 2-207(2): if at least one of the parties is not a merchant then the "additional terms are to be construed as proposals for addition to the contract." However, if both parties are merchants, then the additional terms are included unless one of the three exceptions applies. Are both parties merchants? UCC 2-104 provides that a merchant "means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction." The definition is broad enough to encompass both buyers and sellers. Here, Seller is clearly a merchant since the manufacturer deals in the goods. Although Buyer is not a reseller, as a construction company it regularly purchases hydraulics and therefore holds itself out as having knowledge or skill necessary to be classified as a merchant. Since both parties are merchants, the second part of 2-207(2) applies. The facts don't state that the offer "expressly limits acceptance to the terms of the offer" under sub-(a), nor that the offeror objected to the additional terms in a reasonable time, per sub-(c). That leaves the issue of whether the terms materially alter the offer under sub-(b). An additional clause materially alters the offer if it "results in surprise or hardship if incorporated without express

Seller builds and sells high-end custom computers. Buyer, who earns her living as a teacher, sent Seller a signed email with an offer that Seller build a computer for her. The offer contained (1) specifications for the custom computer, (2) a delivery date of July 15, and (3) a proposed price of $10,000 to be paid upon delivery. Seller sent a signed email stating, "I accept your offer to build a custom computer with these specifications delivered by July 15 in return for a payment of $10,000, payment to be made upon delivery. All computers are sold 'as is' without any warranty - express or implied." Buyer did not reply to Seller's email. Seller builds the custom computer according to the specifications and delivered it to Buyer by July 15. Buyer paid the $10,000 upon delivery. Buyer used the computer for one week; however, the computer, through no fault of Buyer, stopped working after one week. Buyer tried to return the computer or have Seller fix it, but Seller refused. Under UCC Article 2-314, all sales of goods by a merchant include an "implied warranty of merchantability," which under these facts means that the goods must be fit for their ordinary purpose. However, the implied warran

This is another battle of the forms problem. UCC 2-207 applies since the transaction involves the sale of goods. The problem includes some background information on warranties under the UCC that we have not studied yet; this helps to explain the different outcomes. Under 2-207, best to take a two-step approach (see Answer to Question 1, supra). The two steps are: (1) Has a contract formed despite additional or different terms in the acceptance? (2) Are the additional or different terms incorporated into the contract? Step 1: Formation. Here, Seller's acceptance agreed to all of the proposed terms in Buyer's offer; however, it also contained an additional term: an "as is" clause that disclaims any warranty on the computer. This term was not in Buyer's offer. Under the common law, Seller's purported acceptance would be treated as a counteroffer. However, under 2-207(1) a contract is formed despite the additional term. Step 2: Contract Terms. Under these facts, 2-207(2) controls. This provision breaks into two parts. The first sentence applies to situations where at least one party is not a merchant. The second sentence applies to situations where both parties are merchants. Therefore, it is crucial to determine whether both parties are merchants. Here, the contract is between a merchant (Seller) and a nonmerchant (Buyer). Seller is classified as a merchant under 2-104. However, Buyer works as a teacher. Nothing in the facts suggests that she is a dealer in computers or has any particular expertise in custom computers or holds herself out in that way. As such, Buyer is not a merchant. Since one party is not a merchant, the second sentence in 2-207(2) does not apply. That means that any additional terms in Seller's acceptance are construed as proposals for addition to the contract which require affirmative acceptance by the Buyer and are not passively adopted under the second sentence (applicable between merchants). Since Buyer never agreed to the "as is" clause, it is not included in the contract terms. Choice D is correct.

Assuming the facts as stated in Question 5, suppose the Order Acknowledgement e-form had stated, under the title, "this acknowledgement is subject to the buyer's assent to the additional or different terms contained herein." North breaches, South sues, North cites to the clause limiting its liability. What result? A. South may prevail, since the term in dispute is subject to a 2-207(2) analysis. B. South may prevail, since the term in dispute is subject to a 2-207(3) analysis. C. North will prevail, since the term in dispute would be included under a contract formed by the exchange of performances (i.e., under 2-204), and South agreed to the term when it paid for the goods upon receipt. D. North will prevail, since the term in dispute was agreed to by South under a contract formed by the exchange of documents (i.e., under 2-207(1)), and the term would survive "between merchants" under 2-207(2).

This time, the correct answer is A. The language, "may prevail," is more accurate than in C and D, "will prevail," since the term is "additional or different" and subject to 2-207(2). Since 2-207(2)(a) is not applicable here, and the facts don't indicate any objection by South after the fact, the clause would be knocked out only if a court determined that its inclusion in the contract would cause a "material alteration" of the agreement between North and South. The result of its application of the "surprise or hardship" test would depend on the industry context and the jurisdiction.