K final

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irrevocable offers:

- merchant's firm offer - option K's - Detrimental reliance - unilateral w part performance

•Six types of contracts are subject to the Statute of Frauds

-A. Executor/Administrator Contracts -B. Suretyship Contracts -C. Contracts Made in Consideration of Marriage -D. Land Transactions -E. Contracts with a Term of More than One Year -F. Contracts for the Sale of Goods for $500 or More

Economic duress exists where (3 elements)

(1) one party involuntarily accepted the terms of another, (2) circumstances permitted no other reasonable alternative, and (3) such circumstances were the result of coercive acts of the other party.

SOF - merchant confirmation

-Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.

•A, an elderly and illiterate man, lives with and depends for his support on B, his nephew. B tells A that he will no longer support him unless A makes a contract to sell B a tract of land. A is thereby induced to make the proposed contract. Undue influence?

-Even though B's conduct does not amount to duress, it amounts to undue influence because A is under the domination of B, and the contract is voidable by A.

•2. A, who is not experienced in business, has for years been accustomed to rely in business matters on the advice of his friend, B, who is experienced in business. B constantly urges A to make a contract to sell to C, B's confederate, a tract of land at a price that is well below its fair value. A is thereby induced to make the contract. Undue influence?

-Even though B's conduct does not amount to misrepresentation, it amounts to undue influence because A is justified in assuming that B will not act in a manner inconsistent with his welfare, and the contract is voidable.

•Same facts, except the agreement provides that either party may terminate the contract by giving 30 days notice at any time. Is the agreement within the SOF?

-Majority: The agreement is one of uncertain duration and is not within the one-year provision of the Statute.

•. A, an unlicensed plumber, agrees to repair plumbing in B's home, for which B promises to pay A $1,000. A state statute, enacted to prevent the public from being victimized by incompetent plumbers and to protect the public health, requires persons doing plumbing to be licensed on the basis of an examination, the posting of a bond, and the payment of a fee, and makes violation a crime. A does the agreed work, but B fails to pay. Is the contract enforceable by A?

-No, because B's promise is unenforceable on grounds of public policy.

•A orally promises B to sell him five crops of potatoes to be grown on a specified farm in Minnesota, and B promises to pay a stated price on delivery. Is this contract within the SOF?

-The contract is within the Statute of Frauds. It is impossible in Minnesota for five crops of potatoes to mature in one year.

•On December 1, 2020, A and B contract orally for A's employment by B at a stated salary for a year beginning on December 15, 2020. Is the contract within the SOF?

-The contract is within the one-year provision, since it has a term of more than one year from the date of the agreement.

•A orally promises to work for B, and B promises to employ A for five years at a stated salary. Are the promises within the SOF?

-The promises are within the Statute of Frauds.

•The owner of a mint-condition classic automobile wrote a letter to his trusted car mechanic offering to sell him the auto for $45,000, if he bought it before April 15. The mechanic researched the current market value of the car online and discovered that comparable vehicles were being sold for $48,000. On April 1, he was just leaving his home to drive to the car owner's house to give him a check for $45,000 when he received a fax from the owner stating that he had changed his mind and the auto was no longer for sale. The mechanic drove to the auto owner's house anyway, where the auto was parked out front with a "for sale" sign in its window. The mechanic knocked on the owner's door and, when he answered, tendered the $45,000 certified check and demanded the auto. The car owner refused. The mechanic brings an action for damages of breach of contract against the car owner. He will recover: •A) Nothing, because the offer to sell the auto was withdrawn before he accepted. •B) $45,000, because the auto owner has failed to perform under the contract of sale. •C) $3,000, because his tender of the purchase price was an acceptance of the auto owner's offer. •D) $3,000, because the auto owner's letter created an enforceable option.

•1. A dairy farmer hired a local company to assemble milking machines that the farmer had purchased. The written contract between the parties provides that the company would assemble and install the milking machines in the farmer's dairy barn within 30 days, in time for the arrival of additional cows, and the farmer agreed to pay the company $10,000. Three weeks into the job, the company realized that it would lose $2,500 on the job, due to a new wage agreement forced on the company by its employees' union after the contract was executed. The company approached the farmer and told him that the job could not be completed for less than $12,500. After some discussion, the farmer and the company executed an agreement obligating the farmer to pay an additional $2,500 upon completion of the job. The company completed the work on time, but the farmer now refuses to pay the additional $2,500. In a suit by the company against the farmer, which of the following would be the farmer's strongest position? •A. He has no duty to pay the company more than $10,000, because this was a contract for services and the modification was not supported by consideration. •B. The modification is voidable because the company knew that the farmer needed the machines up and running in 30 days and took advantage of his duress. •C. The company's mistake regarding the cost of providing its services is not grounds for voiding the original contract. •D. During initial contract negotiations, the company assured the farmer that the milking machines would be assembled and installed for no more than $10,000.

•1. On July 18, Snowco, a shovel manufacturer, received an order for the purchase of 500 shovels from Acme, Inc., a wholesaler. Acme had mailed the purchase order on July 15. The order required shipment of the shovels no earlier than September 15 and no later than October 15. Typed conspicuously across the front of the order form was the following: "Acme, Inc. reserves the right to cancel this order at any time before September 1." Snowco's mailed response, saying, "We accept your order," was received by Acme on July 21. As of July 22, which of the following is an accurate statement as to whether a contract was formed? •A. No contract was formed because of Acme's reservation of the right to cancel. •B. No contract was formed because Acme's order was only a revocable offer. •C. A contract was formed, but prior to September 1 it was terminable at the will of either party. •D. A contract was formed, but prior to September 1 it was an option contract terminable at will of Acme.

•2. Rob, an auto retailer, had an adult daughter, Betsy, who needed a car in her employment but had only $3,000 with which to buy one. Rob wrote to her, "Give me $3,000 and I'll give you the car on the lot that we have been using as a demonstrator." Betsy thanked her father and paid him the $3,000. As both Rob and Betsy knew, the demonstrator was reasonably worth $10,000. After Betsy had paid the $3,000, but before the car had been delivered to her, one of Rob's sales staff sold and delivered the same car to a customer for $10,000. Neither the salesperson nor the customer was aware of the transaction between Rob and Betsy. Does Betsy have an action for breach of contract? •A. Yes, because Rob's promise was supported by bargained-for consideration. •B. Yes, because Rob's promise was supported by the moral obligation a father owes his child as to the necessities of life. •C. No, because the payment of $3,000 was inadequate consideration to support Rob's promise. •D. No, because the salesperson's delivery of the car to the customer revoked Rob's offer.

•3. A gambler owed his uncle $9,000, which was due on January 1. On January 15, the gambler offered to pay the uncle $8,000 if he would agree to accept the amount in full satisfaction of the $9,000 debt. The uncle agreed and the gambler paid him the $8,000. If the uncle then sues the gambler for $1,000, the uncle will: •A. Win, because the gambler had an obligation to pay $9,000 on January 1. •B. Lose, because of the uncle's agreement to accept $8,000. •C. Lose, because there was an accord and satisfaction. •D. Lose, because the uncle agreed to the $8,000 after the January 1 due date. •

•3. A mechanic agreed in writing to make repairs to a landscaper's truck for $12,000. The mechanic properly made the repairs, but when the landscaper tendered payment, the mechanic refused to deliver the truck unless the landscaper promised to pay an additional $2,000. The customary charge for such work was $14,000. Because the landscaper needed the truck immediately to fulfill existing contractual obligations, and because no rental trucks of the same type were available, the landscaper promised in writing to pay the mechanic an additional $2,000. The mechanic then delivered the truck. Will the mechanic be able to enforce the landscaper's promise to pay the additional $2,000? •A. No, because the landscaper had no reasonable alternative but to yield to the mechanic's wrongful threat. •B. No, because the mechanic exerted undue influence over the landscaper with respect to the modification. •C. Yes, because the landscaper could have obtained possession of the truck through legal action rather than by agreeing to the increased payment. •D. Yes, because the modified contract price did not exceed a reasonable price. •

•3. John and Mary agreed on the telephone that John would buy Mary's Ted Williams autographed baseball for $400. Mary later told him, "The joke's on you. I got a better offer for the ball, and all I had with you was an oral contract, and that doesn't count." Is there an enforceable contract between Mary and John? •A. Yes, because oral agreements for the sale of goods for less than $500 are enforceable. •B. Yes, because the UCC does not apply to this agreement because John and Mary are not merchants. •C. Yes, because Mary admitted making the agreement. •D. No, because there is no writing signed by Mary.

•3. On July 26, a manufacturer of computer accessories received a purchase order form from a retailer who ordered 2,000 ergonomic mouse pads for delivery no later than September 1 for a total price of $10,000, as quoted in the manufacturer's current catalog. Two days later, the manufacturer faxed its own purchase order acceptance form to the retailer, who was a first-time customer. This form stated that it was an acceptance of the specified order, was signed by the manufacturer's shipping manager, and contained all of the terms of the retailer's form, but it also contained an additional printed clause stating that all disagreements under this sale are subject to arbitration by the American Arbitration Association. Assuming no further communication between the parties, which of the following is an accurate statement of the legal relationship between the manufacturer and the retailer? •A. There is an enforceable contract between the parties whose terms probably do not include the arbitration clause in the manufacturer's form. •B. There is an enforceable contract between the parties whose terms include the arbitration clause in the manufacturer's form. •C. There is no enforceable contract between the parties because the manufacturer's form constituted a rejection of the retailer's offer and a counteroffer by the manufacturer. •D. There is no enforceable contract between the parties because the manufacturer's form added an additional term that materially altered the terms of the retailer's offer.

•5. Becky, age 92, has only $25,000 to her name and is fearful that she will outlive her financial resources. On August 10, 2012, Becky explains her concern to her wealthy grand-nephew Logan. On that same day, by signed writing, Logan makes her this promise: "When you exhaust the 25,000 you now have, I will provide you, as a gift, any amount of money you request, up to a maximum of $50,000 per year for the remainder of your life." In September 2012, Becky's grandson Thane asks Becky for $25,000. Unable to resist, and believing that she can turn to Logan for any money she may need, Becky gives Thane the $25,000 in her bank account—all that she has in the world. Becky then contacts Logan. Explaining what she has done, she asks him for $25,000. Logan responds, "I did not make my promise to you so that you could give the money away to Thane. I'm not going to keep the promise." To what extent does the doctrine of promissory estoppel require that Logan keep his promise of August 10, 2012? •A. Not at all, because Becky did not reasonably rely on it. •B. To the extent of $25,000, because that is the extent to which Becky relied on it. •C. To the extent of $25,000, because that is less than amount he promised to pay per year. •D. Fully, because Becky believed that Logan would honor his promise.

•6. Ozzie owned and occupied Blackacre, which was a tract of land improved with a one-family house. His friend, Victor, orally offered Ozzie $50,000 for Blackacre, the fair market value, and Ozzie accepted. Because they were friends, they saw no need for attorneys or written contracts and shook hands on the deal. Victor paid Ozzie $5,000 down in cash and agreed to pay the balance of $45,000 at an agreed closing time and place. Before the closing, Victor inherited another home and asked Ozzie to return his $5,000. Ozzie refused, and, at the time set for the closing, Ozzie tendered a good deed to Victor and declared his intention to vacate Blackacre the next day. Ozzie demanded that Victor complete the purchase. Victor refused. In an action by Victor against Ozzie to recover his $5,000 down payment, Victor will •(A) prevail because the agreement was oral. •(B) lose because Ozzie may keep the $5,000 as liquidated damages. •(C) prevail because Victor unexpectedly inherited another home. •(D) lose because Ozzie tendered a good deed to Victor on the day set for closing.

•7. Elda, the aged mother of Alice and Barry, both adults, wished to employ a live-in companion so that she might continue to live in her own home. Elda, however, had only enough income to pay one half of the companion's $2,000 monthly salary. Learning of their mother's plight, Alice and Barry agreed with each other in a signed writing that on the last day of January and each succeeding month during their mother's lifetime, each would give Elda $500. Elda then hired the companion. Alice and Barry made the agreed payments in January, February, and March. In April, however, Barry refused to make any payment and notified Alice and Elda that he would make no further payments. For this question only, assume that there is a valid contract between Alice and Barry and that Elda has declined to sue Barry. Will Alice succeed in an action against Barry in which she asks the court to order Barry to continue to make his payments to Elda under the terms of the Alice-Barry contract? •(A) Yes, because Alice's remedy at law is inadequate. •(B) Yes, because Alice's burden of supporting her mother will be increased if Barry does not contribute his share. •(C) No, because a court will not grant specific performance of a promise to pay money. •(D) No, because Barry's breach of contract has caused no economic harm to Alice.

•On Dec. 15, Lawyer received from Stationer, Inc., a retailer of office supplies, an offer consisting of its catalog and a signed letter stating, "We will supply you with as many of the items in the enclosed catalog as you order during the next calendar year. We assure you that this offer and the prices in the catalog will remain firm throughout the coming year." No other correspondence passed between Stationer and Lawyer until the following April 15 (4 months later), when Stationer received from Lawyer a faxed order for "100 reams of your paper, catalog item # 101." Did Lawyer's April 15 fax constitute an effective acceptance of Stationer's offer at the prices specified in the catalog? •A. Yes, because Stationer had not revoked its offer before April 15. •B. Yes, because a one-year option contract had been created by Stationer's offer. •C. No, because under applicable law the irrevocability of Stationer's offer was limited to a period of three months. •D. No, because Lawyer did not accept Stationer's offer within a reasonable time.

•Ozzie owned and occupied Blackacre, which was a tract of land improved with a one-family house. His friend, Victor, orally offered Ozzie $50,000 for Blackacre, the fair market value, and Ozzie accepted. Because they were friends, they saw no need for attorneys or written contracts and shook hands on the deal. Victor paid Ozzie $5,000 down in cash and agreed to pay the balance of $45,000 at an agreed closing time and place. Before the closing, Victor inherited another home and asked Ozzie to return his $5,000. Ozzie refused, and, at the time set for the closing, Ozzie tendered a good deed to Victor and declared his intention to vacate Blackacre the next day. Ozzie demanded that Victor complete the purchase. Victor refused. The fair market value of Blackacre has remained $50,000. In an appropriate action brought by Ozzie against Victor for specific performance, if Ozzie loses, the most likely reason will be that •(A) the agreement was oral. •(B) keeping the $5,000 is Ozzie's exclusive remedy. •(C) Victor had a valid reason for not closing. •(D) Ozzie remained in possession on the day set for the closing.

Merchant's Firm Offer

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months

irrevocable offer - detrimental reliance

An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

WidgeCo, a manufacturer of widgets, sent an offer to Discorp, a major wholesaler. WidgeCo offered a standard lot (quantity well-known in the widget trade) of widgets for $8,000. This was a good price, so the president of Discorp personally mailed back to WidgeCo Discorp's standard printed acceptance form. However, the president wrote in large letters in his own hand on the form, "Our liability on this contract is limited to $200." Two days later, the WidgeCo sales manager received the communication from Discorp. WidgeCo sent no additional communication to Discorp. Assuming no additional facts, what is the relationship between the parties? •A. There is no contract between WidgeCo and Discorp because Discorp made a material alteration. •B. There is a valid, enforceable contract between WidgeCo and Discorp, but it is limited to the terms of WidgeCo's offer. •C. There is a valid, enforceable contract between WidgeCo and Discorp and it contains the additional term because WidgeCo failed to object. •D. Discorp has sent a valid counteroffer to WidgeCo which WidgeCo can accept or reject.

•1. A licensed doctor saw an unconscious pedestrian bleeding and lying on the shoulder of a highway. Two years earlier, she had witnessed a similar scene and failed to stop. The earlier pedestrian had wound up dying, and the doctor had promised that victim's wife that if she ever came upon a similar victim, she would stop to help. True to her word, the doctor stopped her car, dashed to the pedestrian's side, and frantically (yet competently) rendered emergency medical care. The pedestrian was stabilized because of the doctor's quick actions and survived. He eventually made a full recovery. The best argument for the doctor recovering the reasonable cost of her medical care from the pedestrian is: •A. There was an implied-in-fact contract. •B. There was an implied-in-law contract. •C. The doctor acted under extreme duress. •D. The doctor had a preexisting duty to a third party. •

•1. On August 1, Geriatrics, Inc., operating a "lifetime care" home for the elderly, admitted Ohlster, who was 84 years old, for a trial period of two months. On September 25, Ohlster and Geriatrics entered into a written lifetime care contract with an effective commencement date of October 1. The full contract price was $20,000, which, as required by the terms of the contract, Ohlster prepaid to Geriatrics on September 25. Ohlster died of a heart attack on October 2. In a restitutionary action, can the administrator of Ohlster's estate, a surviving sister, recover on behalf of the estate either all or part of the $20,000 paid to Geriatrics on September 25? •(A) Yes, because Geriatrics would otherwise be unjustly enriched at Ohlster's expense. •(B) Yes, under the doctrine of frustration of purpose. •(C) No, because Ohlster's life span and the duration of Geriatrics' commitment to him was a risk assumed by both parties. •(D) No, but only if Geriatrics can show that between September 25 and Ohlster's death it rejected, because of its commitment to Ohlster, an application for lifetime care from another elderly person. •

•1. Tenant rented a commercial building from Landlord, and operated a business in it. The building's large front window was smashed by vandals six months before expiration of the Tenant-Landlord lease. Tenant, who was obligated thereunder to effect and pay for repairs in such cases, promptly contracted with Glazier to replace the window for $2,000, due 30 days after satisfactory completion of the work. Sixty days later, Tenant mailed a $1,000 check to Glazier bearing on its face the following conspicuous notation: "This check is in full and final satisfaction of your $2,000 window replacement bill." Without noticing this notation, Glazier cashed the check and now sues Tenant for the $1,000 difference. If Tenant's only defense is accord and satisfaction, is Tenant likely to prevail? •A. No, because Glazier failed to notice Tenant's notation on the check. •B. No, because the amount owed by Tenant to Glazier was liquidated and undisputed. •C. Yes, because by cashing the check Glazier impliedly agreed to accept the $1,000 as full payment of its claim. •D. Yes, because Glazier failed to write a reservation-of-rights notation on the check before cashing it.

•A seller has a contract with a buyer for the sale of a widget on June 1 for $1,000. On June 1, the market price of widgets is $800. The buyer decides to buy the widget on the market for $800 rather than buy it from the seller for $1,000, so the buyer breaches. The seller could have sold the widget for the market price of $900 on June 3 but does not. Assuming the seller incurs no additional expenses because of the breach, how much should the seller recover as damages for the breach under § 2-708? A. $1,000 B. $200 C. $100 D. $0

•10. A distributor of electric toy trains and a hobby shop owner entered into a written contract providing that the distributor will tender to the shop owner four dozen of a popular electric train set at a price of $100 apiece, to be delivered no later than October 31, to take advantage of the holiday shopping season. The shop owner chose to order from this distributor because its price for the train set was lower than that of other distributors. Shortly after the shop owner placed his order, the distributor raised its prices due to a sudden surge in popularity of that train set. Because the distributor did not have enough train sets to accommodate everyone due to the surge of orders, it decided to deliver train sets only to those buyers who had ordered them at the increased price. The distributor notified the shop owner that it would not deliver the train sets it ordered. The shop owner filed an action to force the distributor to deliver the train sets at the agreed-upon price. Will the court compel the distributor to deliver the train sets to the shop owner? •A. No, because a contract for the sale of goods is not subject to specific performance. •B. No, because the shop owner can buy them from another distributor. •C. Yes, because the shop owner will not be able to buy them from another source at the contract price. •D. Yes, because time is of the essence. •

•2. A buyer of goods (Retailer) sends a purchase order to a seller (Manufacturer) on its form. The seller responds with an acknowledgment form that has additional and different terms. In addition, the seller's form states, "Acceptance is expressly made conditional on assent to the additional or different terms in this acknowledgment." When it receives the form, the buyer refuses to go through with the deal. Is the buyer in breach? •A. No, because under the common law there was a counteroffer that was not accepted. •B. No, because the UCC says there was no acceptance and therefore no contract. •C. Yes, because the UCC says there is an acceptance and therefore a contract. •D. Yes, because there was acceptance by conduct.

•2. Buyer faxed the following signed message to seller, his longtime widget supplier: "Urgently need blue widgets. Ship immediately three gross at your current list price of $600." Upon receipt of the fax, seller shipped three gross of red widgets to buyer and faxed to buyer the following message: "Temporarily out of blue. In case red will help, I am shipping three gross at the same price. Hope you can use them." Upon buyer's timely receipt of both the shipment and seller's fax, which of the following best describes the rights and duties of buyer and seller? •A. Buyer may accept the shipment, in which case he must pay seller the list price, or he must reject the shipment and recover from seller for total breach of contract. •B. Buyer may accept the shipment, in which case he must pay seller the list price, or he may reject the shipment, in which case he has no further rights against seller. •C. Buyer may accept the shipment, in which case he must pay seller the list price, less any damages sustained because of the nonconforming shipment, or he may reject the shipment and recover from seller for total breach of contract, subject to seller's right to cure. •D. Buyer may accept the shipment, in which case he must pay seller the list price, less any damages sustained because of the nonconforming shipment, or he may reject the shipment provided that he promptly covers by obtaining conforming widgets from another supplier.

•2. In answer to a radio advertisement, a teenager two months shy of his 18th birthday contracted to buy a late model car from a car dealership. The agreement required a $1,500 down payment with the remainder of the $7,200 price to be paid in monthly installments to a local finance company. The teenager's first eight payments were made regularly until his driver's license was suspended. He then informed the company that no further payments would be forthcoming. The finance company sued for the remaining payments. The age of majority in the teenager's state is 18 years. Would the teenager be liable for the balance of the payments? •A. Yes, because the car dealership was liable on the contract from the outset, notwithstanding the teenager's minority. •B. Yes, because he kept the car for six months after reaching the age of majority. •C. No, because he was a minor at the time of the contracting, and the contract is voidable by him. •D. No, because he informed the finance company in a timely manner after his driver's license was suspended.

•2. In order to raise revenue, a city required home-repair contractors who performed work within the city limits to pay a licensing fee to a city agency. A contractor who was unaware of the fee requirement agreed to perform home repairs for a city resident. After the contractor completed the work, the resident discovered that the contractor had not paid the licensing fee, and she refused to pay for the repairs, which were otherwise satisfactory. In the contractor sues the resident for breach of contract, how is the court likely to rule? •A. Although the contract violates the law and is void, the court will require the homeowner to pay the contractor the reasonable value of the work accepted. •B. Although the contract violates the law, the court will find that public policy does not bar enforcement of the contract, because the purpose of the fee is merely to raise revenue. •C. Because the contract violates the law and is void, the court will not enforce it. •D. Because the purpose of the fee is merely to raise revenue, the court will find that the contract does not violate the law but will allow the contractor to recover his costs only.

•Same facts as the prior slide, but for this question only assume that on January 15, having at that time received no reply from Lawyer, Stationer notified Lawyer that effective February 1, it was increasing the prices of certain specified items in its catalog. Is the price increase effective with respect to catalog orders Stationer receives from Lawyer during the month of February? •A. No, because Stationer's original offer, including the price term, became irrevocable under the doctrine of promissory estoppel. •B. No, because Stationer is a merchant with respect to office supplies; and its original offer, including the price term, was irrevocable throughout the month of February. •C. Yes, because Stationer received no consideration to support its assurance that it would not increase prices. •D. Yes, because the period for which Stationer gave assurance that it would not raise prices was longer than three months.

UCC Gap Fillers: Place of Delivery

Buyer comes to seller

•4. Client consulted Lawyer about handling the sale of Client's building, and asked Lawyer what her legal fee would be. Lawyer replied that her usual charge was $100 per hour, and estimated that the legal work on behalf of Client would cost about $5,000 at that rate. Client said, "Okay, let's proceed with it," and Lawyer timely and successfully completed the work. Because of unexpected title problems, Lawyer reasonably spent 75 hours on the matter and shortly thereafter mailed Client a bill for $7,500, with a letter itemizing the work performed and time spent. Client responded by a letter expressing his good-faith belief that Lawyer had agreed to a total fee of no more than $5,000. Client enclosed a check in the amount of $5,000 payable to Lawyer and conspicuously marked, "Payment in full for legal services in connection with the sale of Client's building." Despite reading the "Payment in full..." language, Lawyer, without any notation of protest or reservation of rights, endorsed and deposited the check to her bank account. The check was duly paid by the Client's bank. A few days later, Lawyer unsuccessfully demanded payment from the Client of the $2,500 difference between the amount of her bill and the check, and now sues Client for that difference. What, if anything, can Lawyer recover from Client? •(A) Nothing, because the risk of unexpected title problems in a real-property transaction is properly allocable to the seller's attorney and thus to Lawyer in this case. •(B) Nothing, because the amount of Lawyer's fee was disputed in good faith by Client, and Lawyer impliedly agreed to an accord and satisfaction. •(C) $2,500, because Client agreed to an hourly rate for as many hours as the work reasonably required, and the sum of $5,000 was merely an estimate. •(D) The reasonable value of Lawyer's services in excess of $5,000, if any, because there was no specific agreement on the total amount of Lawyer's fee.

•6. Employee, aged 60, who had no plans for early retirement, had worked for Employer for 20 years as a managerial employee-at-will when he had a conversation with Employer's president (President), about Employee's post-retirement goal of extensive travel around the U.S. A month later, President handed Employee a written, signed resolution of Employer's Board of Directors stating that when and if Employee should decide to retire, at his option, the company, in recognition of his past service, would pay him a $4,000-per-month lifetime pension. The company had no regularized retirement plan for at-will employees. Shortly thereafter, Employee retired and immediately bought a $50,000 recreational vehicle for his planned travels. After receiving the promised $4,000 monthly pension from Employer for six months, Employee now unemployable elsewhere, received a letter from Employer advising him that the pension would cease immediately because of recessionary budget constraints affecting in varying degrees all managerial salaries and retirement pensions. In a suit against Employer for damages, Employee will probably •A. win, because he retired from the company as bargained-for-consideration for the Board's promise to him of a lifetime pension. •B. win, because he timed his decision to retire and to buy the recreational vehicle in reasonable reliance on the Board's promise to him of a lifetime pension. •C. lose, because the Board's promise to him of a lifetime pension was an unenforceable gift promise. •D. lose, because he had been an employee-at-will throughout his active service with the company.

•7. A wholesale seller of DVD players e-mailed a message to the owner of a retail electronics store, stating that he had recently received a new shipment of 200 X-Brand DVD players that were available for sale to the store owner. ln a return e-mail, the store owner accepted the offer to purchase the DVD players, but added that it would be easier, given his limited space, if the wholesaler delivered 50 of the DVD players each month for the next four months. The wholesaler e-mailed back to the store owner, saying that he would only ship the entire order of 200 DVD players now. If the wholesaler then tenders the 200 conforming DVD players, the store owner: •A. May reject the entire delivery. •B. Must accept the entire delivery. •C. May demand that the wholesaler deliver 50 DVD players a month for the next four months. •D. Must accept or reject the entire delivery.

•7. Dominique obtained a bid of $10,000 to tear down her old building and another bid of $90,000 to replace it with a new structure in which she planned to operate a sporting goods store. Having only limited cash available, Dominque asked Hardcash for a $100,000 loan. After reviewing the plans for the project, Hardcash in a signed writing promised to lend Dominique $100,000 secured by a mortgage on the property and repayable over ten years in equal monthly installments at 10% annual interest. Dominique promptly accepted the demolition bid and the old building was removed, but Hardcash thereafter refused to make the loan. Despite diligent efforts, Dominique was unable to obtain a loan from any other source. Does Dominique have a cause of action against Hardcash? •(A) Yes, because by having the building demolished, she accepted Hardcash's offer to make the loan. •(B) Yes, because her reliance on Hardcash's promise was substantial, reasonable, and foreseeable. •(C) No, because there was no bargained-for exchange of consideration for Hardcash's promise to make the loan. •(D) No, because Dominique's inability to obtain a loan from any other source demonstrated that the project lacked the financial soundness that was a constructive condition to Hardcash's performance. •

•9. A buyer contracts to buy a supply of oil over a term of 12 years. At the end of the third year, the contract is not profitable for the seller and it breaches. The buyer finds that oil is readily available from sellers on a short-term basis, but because of volatility in the market, no seller will enter into a long-term agreement similar to the one the buyer had with the seller. Is specific performance available to the buyer under Article 2? •A. Yes, because the goods are unique. •B. Yes, because this is an example of "other proper circumstances." •C. No, because the buyer can buy oil on the market. •D. No, because the seller can't be compelled to perform a losing contract.

•A contractor sends a company its bid on a construction job. The bid consists of specifications and prices, followed by a number of boilerplate provisions. The company responds by writing up the price and specifications on its own form, which it sends to the contractor. The contractor completes the project and the company inspects it after 25 days. The company finds some unfinished work and demands payment for it. The contractor claims that he is not responsible for the unfinished work because the form he sent says that inspection must be completed within 20 days after construction, and the company did not timely inspect. However, the company's form indicates that it has 30 days after completion to inspect. Who is responsible for the unfinished work? •A. The owner, because the contractor's form governs. •B. The contractor, because the company's form governs. •C. Neither, because there is no agreement on this term. •D. Both terms are knocked out and the party who would be responsible is supplied by trade usage or by a court.

A racehorse breeder and a stable owner entered into a written agreement giving the stable owner the option to purchase all colts foaled out of a particular champion racehorse during the next three years. The agreement provided that price would be determined on the basis of weight, height, and bone structure at time of delivery. Six months later, the first colt was born to the horse, and it had all the markings of a champion. The stable owner immediately tendered $25,000 to the breeder for the colt, which was a good faith approximation of its value. However, the breeder refused to deliver the colt unless the stable owner paid $100,000. The stable owner sued the breeder. If the breeder defends on the ground that there is no enforceable contract obligating him to sell, what would the court most likely hold? A. There is no enforceable contract because the stable owner was not obligated in any way under the signed writing. B. There is an enforceable contract because, by signing the document, the stable owner impliedly promised to purchase. Correct C. Even if the writing was not an enforceable contract, the stable owner's good faith tender of $25,000 created an enforceable contract. Incorrect D. The agreement is enforceable as a firm offer between merchants under the UCC.

Hydro-King, Inc., a high-volume, pleasure boat retailer, entered into a written contract with Zuma, signed by both parties, to sell Zuma a power boat for $12,000. The manufacturer 's price of the boat delivered to Hydro-King was $9,500. As the contract provided, Zuma paid Hydro-King $4,000 in advance and promised to pay the full balance upon delivery of the boat. The contract contained no provision for liquidated damage. Prior to the agreed delivery date, Zuma notified Hydro-King that he would be financially unable to conclude the purchase, and Hydro-King thereupon resold the same boat that Zuma had ordered to a third person for $12,000 cash. If Zuma sues Hydro-King for restitution of the $4,000 advance payment, which of the following should the court decide? •A. Zuma's claim should be denied, because, as the party in default, he is deemed to have lost any right to restitution of a benefit conferred on Hydro-King. •B. Zuma's claim should be denied, because, but for his repudiation, Hydro-King would have made a profit on two boat sales instead of one. •C. Zuma's claim should be upheld in the amount of $4,000 minus the amount of Hydro-King's lost profit under its contract with Zuma. •D. Zuma's claims should be upheld in the amount of $3,500 ($4,000 minus $500 as statutory damages under the UCC).

•1. A young man proposed to his girlfriend, but she was reluctant because of his meager income and lack of job potential. The young man told his father about her reluctance. The father told the girlfriend that if she married his son, he would support them for six months and send his son to a six-month computer technology training school. This was sufficient to dispel her reservations and the two were married very soon thereafter. When they returned from their honeymoon, the father refused to go through with his offer. Although the girlfriend is happy in her marriage, she sued the father for damages. If the father prevails, it will be because: •A) The father's promise was not supported by valid consideration. •B) The contract is against public policy. •C) The contract was oral. •D) The girlfriend is happy and therefore has incurred no detriment.

•11. One Saturday, the owner of an art gallery and her friend were discussing art after the friend had helped the owner move some furniture in her home. The friend mentioned that he was very fond of a particular artist. The gallery owner asked her friend if he would like to buy a painting by the artist, entitled "Tears of a Clown," recently consigned to the gallery. The friend said that he would love it, but he only had $2,700. The gallery owner told her friend that she would let him have the painting for that price. The friend knew that the painting was priced at $7,000. He immediately wrote out a check for $2,700 and gave it to the gallery owner, who told him to visit the gallery on Monday to pick up the painting. On Sunday, a salesperson at the gallery sold "Tears of a Clown" to a gallery customer. Neither the salesperson nor the customer knew of the agreement between the gallery owner and her friend. The customer took the painting with him on Sunday. When the friend arrived at the gallery on Monday, the painting was gone. Can the friend obtain specific performance from the gallery owner? •A. Yes, because there was a bargained-for exchange of promises between the friend and the gallery owner. •B. Yes, because the friend's assistance to the gallery owner in moving her furniture should be considered part of the quantum of adequate consideration. •C. No, because the painting was sold to a bona fide purchaser for value and enforcement against the gallery owner is no longer feasible. •D. No, because the gallery owner's promise was essentially a gift to her friend that she was free to revoke. •

•3. In a single writing, Painter contracted with Farmer to paint three identical barns on her rural estate for $2,000 each. The contract provided for Farmer's payment of $6,000 upon Painter's completion of the work on all three barns. Painter did not ask for any payment when the first barn was completely painted, but she demanded $4,000 after painting the second barn. Assume that Farmer rightfully refused Painter's demand for payment. If Painter immediately terminates the contract without painting the third barn, what is Painter entitled to recover from Farmer? •A. Nothing, because payment was expressly conditioned on completion of all three barns. •B. Painter's expenditures plus anticipated "profit" in painting the first two barns, up to a maximum recovery of $4,000. •C. The reasonable value of Painter's services in painting the two barns, less Farmer's damages, if any, for Painter's failure to paint the third barn. •D. The amount that the combined value of the two painted barns has been increased by Painter's work.

•4. A building contractor entered into a contract with the local college to remodel a residence hall during the summer. As specified by the contract, the work had to be completed before the fall semester began at the beginning of September. Because the contractor received a great deal of other maintenance business from the college, his price of $400,000 was significantly lower than other contractors and he was not going to demand payment until the work was completed. By the end of the first week in August, the contractor had completed 75% of the project and had expended $350,000 in labor and materials. At that time, however, a labor dispute between the contractor and his employees prompted most of the workers to walk off the job. Because prospects for a quick settlement of the dispute were doubtful, the contractor informed the college that he would not be able to meet the completion deadline. A week later, the college obtained another contractor who was able to finish the project by the end of August. The college paid him $150,000, which included a substantial amount of overtime for his workers. The increase in value of the residence hall due to the remodeling was $425,000. The original contractor, who had not been paid, files suit against the college, which files a counterclaim against him. What should the contractor recover from the college? •A. Nothing, because the contractor breached the contract. •B. $200,000 in restitutionary damages, which is the difference between its expenditures and the amount the college paid the other contractor to complete the work. •C. $250,000 in restitutionary damages, which is the contract price minus the amount the college paid the other contractor to complete the work. •D. $275,000 in restitutionary damages, which is the difference between the value of the completed remodeling and the amount the college paid the other contractor to complete the work.

•4. A daughter was appointed guardian of her elderly father following an adjudication of his mental incompetence. The father had experienced periods of dementia during which he did not fully understand what he was doing. The father later contracted to purchase an automobile at a fair price from a seller who was unaware of the guardianship. At the time of the purchase, the father was lucid and fully understood the nature and purpose of the transaction. What is the legal status of the transaction? •(A) The contract is enforceable, because a reasonable person in the situation of the seller would have thought that the father had the capacity to make the contract. •(B) The contract is enforceable, because it was made on fair terms and the seller had no knowledge of the father's guardianship. •(C) The contract is void, because the father was under guardianship at the time it was made. •(D) The contract is voidable at the option of the father. •

•4. On June 1, Buyem, Inc., a widget manufacturer, entered into a written agreement with Mako, Inc., a tool maker, in which Mako agreed to produce and sell to Buyem 12 sets of newly designed dies to be delivered August 1 for the price of $50,000, payable ten days after delivery. Encountering unexpected expenses in the purchase of special alloy steel required for the dies, Mako advised Buyem that production costs would exceed the contract price; and on July 1 Buyem and Mako signed a modification to the June 1 agreement increasing the contract price to $60,000. After timely receipt of 12 sets of dies conforming to the contract specifications, Buyem paid Mako $50,000 but refused to pay more. Is Mako entitled to $10,000 for breach of Buyem's July 1 promise? •A. No, because Mako provided no new consideration for the July 1 agreement. •B. No, because Mako had a pre-existing duty to perform. •C. Yes, if Mako was acting in good faith. •D. Yes, but only if Mako agreed to deliver the dies prior to August 1.

•8. Assume the same facts as the last question. For this question only, assume that Dominique has a cause of action against Hardcash. If she sues him for monetary relief, what is the probable measure of her recovery? •(A) Expectancy damages, measured by the difference between the value of the new building and the old building, less the amount of the proposed loan ($100,000). •(B) Expectancy damages, measured by the estimated profits from operating the proposed sporting goods store for ten years, less the cost of repaying a $100,000 loan at 10% interest over ten years. •(C) Reliance damages, measured by the $10,000 expense of removing the old building, adjusted by the decrease or increase in the market value of Dominique's land immediately thereafter. •(D) Nominal damages only, because both expectancy and reliance damages are speculative, and there is no legal or equitable basis for awarding restitution. •

•A manufacturer of soft drinks orders a ton of sugar from a seller to be delivered on June 1. The manufacturer tells the supplier that if it does not deliver the sugar on time, it will have to close its assembly line. On May 31, the supplier calls the manufacturer and says that it will be unable to deliver the sugar until June 5. The manufacturer ran out of sugar on June 3 and closed its assembly line, losing profits because it could not make the drink without the sugar. The manufacturer asks you whether you would advise him to make a claim against the sugar supplier for consequential damages. Is he likely to recover consequential damages? •A. Yes, because the manufacturer was told that the sugar was needed to keep the assembly line operating, •B. Yes, because a reasonable person would know that the sugar was needed to keep the assembly line operating. •C. No, if the manufacturer failed to make efforts to find substitute sugar after it knew the seller would not deliver. •D. No, because the seller would not reasonably know that the sugar was needed to keep the assembly line operating.

-Problem: A, who has promised B to vacate leased premises in return for $10,000 in order to permit B to demolish the building and construct another, refuses to do so unless B agrees to purchase his worthless furniture for $5,000. B can resort to regular eviction proceedings, but because this will materially delay his construction schedule and cause him heavy financial loss, he is induced by A's threat to make the contract. Enforceable contract?

•No, B has no reasonable alternative, A's threat amounts to duress, and the contract is voidable by B.

Bakery and Restaurant agree in writing that Restaurant will buy all of the pies it requires for the next 12 months from Bakery at $5 per pie. 1.Is this agreement legally enforceable? 2.Restaurant averages 50 pies per month for the first six months. In month seven, Bakery orders 55 pies because its business has improved. Is Bakery obligated to supply 55 pies? 3.Restaurant averages 50 pies per month for the first six months. In month seven, Bakery opens two new locations and now demands 150 pies per month (50 pies for each location) from Bakery for $5 per pie. Is Bakery obligated to supply 150 pies? 4.As it turns out, Restaurant is losing money purchasing the pies for $5. Restaurant asks Bakery to lower the price to $4, but Bakery refuses. As a result, Restaurant discontinues the sale of pies and instead starts selling cakes. Has Restaurant breached the contract it has with Bakery? 5.In month eight, Restaurant sells its business to Conglomerate, which owns a chain of restaurants. As part of the sale, Restaurant assigns its rights in the Bakery contract to Conglomerate. Conglomerate determines that $5 per pie is a good price, so it orders 600 pies in month nine, most of which will be sold in Conglomerate's restaurants in other states. Is Bakery obligated to supply 600 pies?

Contract? Yes If they want 5 more is that ok? Yes 2-306(1) cant be disproportionate Now they want to triple. No can do They don't wanna pay $5 anymore and stop selling pies. They need to be in good faith- customers stop buying Probs cant do under ucc

•Retail Marine, a retailer of boats that is able to get an unlimited supply of boats from manufacturers, agrees to sell Neri a boat for $12,587. Before the date for delivery, Neri repudiates the contract. After several weeks, Retail Marine is able to sell the boat to another customer for $12,587. Retail Marine is able to prove that it incurred reasonable incidental expenses of $674 in connection with the resale, and that its profit on the sale to Neri would have been $2,587. How much should Retail Marine recover as damages from Neri? -A. $13,261, the sale price plus expenses incurred -B. $3,261, the lost profit plus expenses incurred -C. $2,587, the lost profit -D. $674, the expenses incurred in connection with the resale.

•12. A homeowner contracted with a local builder, a sole proprietorship, for the builder to personally build a wooden deck onto the back of her house. The contract called for half of the contract price of $20,000 to be paid to the contractor before he began work and the other half to be paid to him when the job was completed. The contractor began the work but, partway through the job, he got an offer for a rush job that paid better and abruptly quit. The homeowner sues the contractor for specific performance. Will she prevail? •A. Yes, because there has been a novation. •B. Yes, because the contract between the parties was valid and the contractor had no legal justification for abruptly quitting. •C. No, because by not paying the contractor for the second half of the job, the homeowner has not satisfied all of her conditions under the contract. •D. No, because the contract is for personal services. •

V=•On October 1, a siding installer sent a letter to a builder stating, "I am offering to install siding on one or up to all of the 12 houses that you are currently building. This offer remains open until November 1." On October 13, the builder e-mailed the installer, "We accept your offer with respect to the house on Main Street." There was only one house on Main Street that the builder was constructing, so the installer promptly began the siding installation. On October 25, the installer telephoned the builder to inform him that she had accepted other work and so would not be able to install siding on the builder's other houses. The builder thereafter faxed the installer, "We would like you to do the siding on the other houses." In an action by the builder against the installer for breach of contract, the builder will probably: • A. Succeed, because the installer had promised that the offer would remain open until November 1. • B. Succeed, because the installer's attempted revocation was by telephone. • C. Not succeed, because the builder's power of acceptance was terminated by the installer's contract with another party. • D. Not succeed, because the builder's power of acceptance was terminated by effective revocation. •

•1. Homeowner hired Incompetent, a professional carpenter, to construct a new deck on Homeowner's house. Under the arrangement, Incompetent was to provide all the materials (the wood, nails, etc.) and to complete construction for a price of $2,000. The materials themselves cost only $300. After Incompetent finished and received payment, Homeowner had a party. When Doug Drinker, one of the guests, walked out onto the deck, the deck collapsed and Drinker was severely injured. If Drinker sues Incompetent for breach of the UCC's implied warranty of merchantability and implied warranty of fitness for a particular purpose, Drinker most likely will: •A. Prevail on both warranties. •B. Lose on the implied warranty of merchantability because Incompetent is not a merchant, but prevail on the implied warranty of fitness for a particular purpose. •C. Prevail on the implied warranty of merchantability because Incompetent is a merchant, but lose on the implied warranty of fitness for a particular purpose. •D. Lose on both warranties. •

•1. On June 1, Topline Wholesale, Inc. received a purchase-order form from Wonder-Good, Inc., a retailer and new customer, in which the latter ordered 1,000 anti-recoil widgets for delivery no later than August 30 at a delivered total price of $10,000, as quoted in Topline's current catalog. On June 2, Topline mailed to Wonder-Good its own form, across the top of which Topline's president had written, "We are pleased to accept your order." The form contained the same terms as Wonder-Good's form except for an additional printed clause in Topline's form that provided for a maximum liability of $100 for any breach of contract by Topline. As of June 5, when Wonder-Good received Topline's form, which of the following is an accurate statement concerning the legal relationship between Topline and Wonder-Good? •A. There is no contract, because the liability-limitation clause in Topline's form is a material alteration of Wonder-Good's offer. •B. There is no contract, because Wonder-Good did not consent to the liability-limitation clause in Topline's form. •C. There is an enforceable contract whose terms include the liability-limitation clause in Topline's form because liquidation of damages is expressly authorized by the UCC. •D. There is an enforceable contract whose terms do not include the liability-limitation clause in Topline's form.

•2. A company contracted with a builder to construct a new corporate headquarters for a fixed price of $100 million. At the time of the contract, structural steel was widely available and was included in the contract as a $6 million item. Before work began on the project, tornado damage shut down the production facility of the biggest structural steel supplier in the country, and the price of structural steel increased by 20% as a result. The builder informed the company of the steel price increase, and the parties then orally agreed to increase the project price to $101 million. The builder proceeded with construction and delivered the project on time. The company paid the builder $100 million but refused to pay the additional $1 million. If the builder sues the company for $1 million, is the builder likely to prevail? •(A) No, because the modification was never reduced to a writing signed by the party to be charged. •(B) No, because there was no consideration for the modification of the contract. •(C) Yes, because the company's promise was supported by consideration. •(D) Yes, because the modification was fair and equitable in view of the unanticipated increase in the price of structural steel. •

•2. In a state where gaming is legal, a professional gambler ran up a tab of $50,000 at his favorite casino. Pursuant to a longstanding agreement between the gambler and the casino, once the gambler's tab reached $50,000 he was required to repay the debt in five monthly installments of $10,000 before putting any additional charges on his tab. After making three repayments, the gambler approached the casino owner and offered an immediate payoff of $15,000 in cash as payment in full. The casino owner had a cash flow problem and needed the money, so he agreed. The gambler made the cash payment of $15,000 that same day. A few days later, the casino owner demanded $5,000 from the gambler. Does the casino owner have a right to collect $5,000 from the gambler? •A. Yes, because the gambler had a preexisting duty to pay the full $50,000. •B. Yes, because the casino owner acted under duress when he accepted the immediate payoff of $15,000 in cash as payment in full for the gambler's debt. •C. No, because there was a discharge by release. •D. No, because there was an accord and satisfaction. •

•2. Jon and Margee work as coal miners. One day while working, Margee noticed that a dynamite charge was not properly placed and that Jon was at risk of being killed by the dynamite explosion. Margee rushed over to push Jon out of the way. In doing so, Margee absorbed some of the dynamite explosion and was crippled for the rest of her life. Jon was so moved by Margee's sacrifice that he promised to pay Margee $1,000 per month for the rest of Margee's life. Jon paid Margee the $1,000 per month for 5 years, but then Jon died. Jon's estate does not want to continue to pay Margee the $1,000 per month. Which of the following statements is most accurate? •A. Margee will definitely not be allowed to enforce Jon's promise because it is supported only by past consideration. •B. Margee might be allowed to enforce Jon's promise, but only if it was reduced to writing. •C. Margee will definitely not be allowed to enforce Jon's promise because it was an offer to make a gift, which offer was automatically revoked upon Jon's death. •D. Margee might be able to enforce the agreement if the court accepts the validity of the material benefit rule. •

•3. A burglar stole Collecta's impressionist painting valued at $400,000. Collecta, who had insured the painting for $300,000 with Artistic Insurance Co., promised to pay $25,000 to Snoop, a full-time investigator for Artistic, if he effected the return of the painting to her in good condition. By company rules, Artistic permits its investigators to accept and retain rewards from policyholders for the recovery of insured property. Snoop, by long and skillful detective work, recovered the picture and returned it undamaged to Collecta. If Collecta refuses to pay Snoop anything, and he sues her for $25,000, what is the probable result under the prevailing modern rule? •(A) Collecta wins, because Snoop owed Artistic a preexisting duty to recover the picture if possible. •(B) Collecta wins, because Artistic, Snoop's employer, has a preexisting duty to return the recovered painting to Collecta. •(C) Snoop wins, because Collecta will benefit more from return of the $400,000 painting than from receiving the $300,000 policy proceeds. •(D) Snoop wins, because the preexisting duty rule does not apply if the promisee's (Snoop's) duty was owed to a third person.

•3. Paul is a law student and needs some extra cash. He puts up posters saying that he wants to sell his skis. Dorothy agrees to buy them for $200. She never comes up with the money, so she breaches their contract. How much is Paul most likely to recover, assuming the contract price is essentially the same as the fair market value and that it is not too hard to sell skis this time of year? •A. $200. •B. $200, with a possibility of large punitive damages for willful breach. •C. Paul will probably be limited to specific performance. •D. Probably close to nothing. •

•3. Walmart purchases a full-page ad in the weekly newspaper. In this week's ad, Walmart lists a Samsung DVD player for $75. The newspaper, however, made a mistake. The advertisement should have listed the DVD player at $475. Upon seeing the ad, Buyer goes to the nearest Walmart, walks up to the electronics department, shows the advertisement to the clerk, and before the clerk can say a word, Buyer says, "I accept." At this point in time, do the parties have a contract? •A. Yes, because Buyer accepted before Walmart revoked the offer. •B. No, if Walmart attempted to retract the advertisement within a reasonable time after its publication. •C. No, because such contracts must be in writing. •D. No, because Buyer's attempted acceptance was nothing but an offer, which Walmart has yet to accept.

•5. A buyer of goods sends a purchase order to a seller on its form. The boilerplate on the form states that the seller is liable for consequential damages. The seller responds with an acknowledgment form that contains boilerplate that states that the seller is not liable for consequential damages. In addition, the seller's form states, "Acceptance is expressly made conditional on assent to the additional or different terms in this acknowledgment." After the forms are exchanged, the seller ships the goods and the buyer pays for them. The buyer then suffers consequential damages because of a breach by the seller. Is the seller liable for consequential damages? •A. No, because there is no contract between the parties. •B. No, because the seller's form governs. •C. Yes, because the buyer's form governs. •D. Yes, because the UCC provides for consequential damages.

•5. A manufacturer of electronic game cartridges for use with other manufacturers' electronic game systems received a letter from a buyer for a large toy store chain ordering two 100-unit lots of a particular game cartridge from the manufacturer's catalog. The buyer's letter stated that the cartridges must be compatible with two specified game systems. The manufacturer made no warranties of any type regarding the compatibility of the cartridges with any game systems, but both parties reasonably believed that the cartridges were compatible with both game systems. On receiving the shipment, the buyer discovered that the cartridges did not work with one of the game systems. The buyer has made full payment to the manufacturer. Which of the following is the most appropriate remedy for the buyer? •A. Specific performance of the contract, requiring the manufacturer to ship two 100-unit lots of cartridges compatible with both game systems. •B. Rescission of the contract. •C. Restitution by the manufacturer of the purchase price of the two lots. •D. Both B and C.

•6. On September 15, a highlighter manufacturer faxed a large office supply company offering to sell the supply company 50,000 highlighters for $25,000. The supply company faxed back the following communication: "We accept your offer. Please box 125 highlighters per case in post-consumer cardboard shipping boxes." Assuming the existence of a valid contract, its terms would include: •A. Only those terms set forth in the manufacturer's fax of September 15, because the manufacturer did not assent to any enlargement of the shipping terms. •B. All terms set forth in the manufacturer's offer plus consistent additional terms proposed in the office supply company's acceptance. •C. All terms set forth in the manufacturer's offer plus those in the office supply company's attempted acceptance that did not amount to a material alteration of the manufacturer's offer. •D. All terms set forth in the manufacturer's offer plus all those in the office supply company's purported acceptance that did not amount to a material alteration of the manufacturer's offer and to which the manufacturer did not object within a reasonable time. •

•8. In a contract for the sale of goods, a merchant offeror's form states, "This contract is governed by the law of Texas." The merchant offeree's form states, "This contract is governed by the law of Vermont." In a jurisdiction that employs the knockout rule, which jurisdiction supplies the governing law? •A. Texas, because the offeror should be able to choose the applicable law. •B. Texas, because Vermont is materially different. •C. Vermont, because it is not materially different from Texas. •D. Whichever state prevails when the UCC choice of law rules are applied. •

•A buyer orders widgets from a seller at a contract price of $12,000. Before the seller has a chance to assemble the widgets ordered by the buyer, the buyer repudiates the contract. The market price is $11,000. The seller has some costs associated with this order, including the cost of materials and labor plus fixed costs, that come to $5,000; in addition, the seller would have made $1,000 in profit on the transaction. As a result, the seller believes it has a claim for $6,000 in damages. The seller also reasonably believes that it can complete production of the widgets and sell them for $7,000, so that the buyer's damages will be $5,000, which is less than the damages would be if it did not complete production. The seller goes ahead and completes production, but by the time it has done so, the market has fallen so that the market price is only $4,000. The seller sells them at that price. What should the seller recover as damages from the buyer? •A) $1,000, the amount under the market price formula. •B) $5,000, the amount the seller thought the damages would be if mitigated. •C) $6,000, the amount under the lost profit formula. •D) $8,000, the amount it actually lost after it attempted to mitigate.

•Bobby, age 17, enters into an oral agreement to purchase Sally's 1974 Ford Pinto for $500. Prior to either party performing, Sally (age 21) repudiates. Bobby brings suit for breach of contract. If Sally wins, it will be because of: •A. Bobby's age. •B. Sally's age. •C. Lack of consideration. •D. The Statute of Frauds. •

•Buyer mailed a signed order to Seller that read: "Please ship us 10,000 widgets at your current price." Seller received the order on January 7 and that same day mailed to Buyer a properly stamped, addressed, and signed letter stating that the order was accepted at Seller's current price of $10 per widget. On January 8, before receipt of Seller's letter, Buyer telephoned Seller and said "I hereby revoke my order." Seller protested to no avail. Buyer received Seller's letter on January 9. Because of Buyer's January 8 telephone message, Seller never shipped the goods. Under the relevant and prevailing rules, is there a contract between Buyer and Seller as of January 10? •A. No, because the order was an offer that could be accepted only by shipping the goods; and the offer was effectively revoked before shipment. •B. No, because Buyer never effectively agreed to the $10 price term. •C. Yes, because the order was, for a reasonable time, an irrevocable offer. •D. Yes, because the order was an offer that Seller effectively accepted before Buyer attempted to revoke it.

•Fruitko, Inc., ordered from Orchard, Inc., 500 bushels of No. 1 Royal Fuzz peaches, at a specified price, "for prompt shipment." Orchard promptly shipped 500 bushels, but by mistake shipped No. 2 Royal Fuzz peaches instead of No. 1. The error in shipment was caused by the negligence of Orchard's shipping clerk. Which of the following best states Fruitko's rights and duties upon delivery of the peaches? •(A) Orchard's shipment of the peaches was a counteroffer and Fruitko can refuse to accept them. •(B) Orchard's shipment of the peaches was a counteroffer but, since peaches are perishable, Fruitko, if it does not want to accept them, must reship the peaches to Orchard in order to mitigate Orchard's losses. •(C) Fruitko must accept the peaches because a contract was formed when Orchard shipped them. •(D) Although a contract was formed when Orchard shipped the peaches, Fruitko does not have to accept them.

•Loomis, the owner and operator of a small business, encourages "wellness" on the part of his employees and supports various physical fitness programs to that end. Learning that one of his employees, Graceful, was a dedicated jogger, Loomis promised to pay her a special award of $100 if she could and would run one mile in less than six minutes on the following Saturday. Graceful thanked him, and did in fact run a mile in less than six minutes on the day specified. Shortly thereafter, however, Loomis discovered that for more than a year Graceful had been running at least one mile in less than six minutes every day as a part of her personal fitness program. He refused to pay the $100. In an action by Graceful against Loomis for breach of contract, which of the following best summarizes the probable decision of the court? •A. Loomis wins, because there is a compelling inference that Loomis' promise did not induce Graceful to run the specified mile. •B. Loomis wins, because Graceful's running of the specified mile was beneficial, not detrimental, to her in any event. •C. Graceful wins, because running a mile in less than six minutes is a significantly demanding enterprise. •D. Graceful wins, because she ran the specified mile as requested, and her motives for doing so are irrelevant.

•On September 1, a law school professor announced to his class that he would pay the tuition of the bar review course of the student's choice for the student who received the highest grade in his Constitutional Law class. A week later, one student in the professor's class told the professor that he was giving his best effort to get the highest grade in class to win the prize and had already purchased every substantive Constitutional Law outline on the market. On October 1, the professor told his class that he was withdrawing his offer. Which of the following statements about the professor's October 1 announcement is correct? •A. It had no legal effect, because no offer had been made. •B. It was an effective revocation of the offer to all students who heard it because it was made in the same manner as the offer. •C. It was an ineffective revocation as to any student who failed to hear it. •D. It was ineffective as to the student who had begun performance prior to the withdrawal of the offer.

•are two types of physical duress under contract law: (which ones are void/ voidable)

Force or Threats of Imminent Violence or Unlawful Imprisonment - VOID Other Improper Threats - VODIABLE

UCC Gap Fillers: price

Parties can conclude a K for sale even tho price isn't settled. in such case, price is reasonable @ time for DELIVERY if: - nothing said as to price - price is left to be. agreed by parties and they fail to agree - price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and not set

A builder and a landowner entered into a valid written contract under which the builder agreed to erect a house on the landowner's land according to certain plans and specifications and the landowner agreed to pay the sum of $200,000 upon completion. During the course of construction, building costs increased by $15,000 due to an unexpected shortage of materials. The builder informed the landowner of the increased costs, and the parties agreed in writing that the builder could omit installing the air conditioning unit called for by the specifications (thus saving the builder approximately $10,000) and nevertheless receive the full construction contract price. A. No, for lack of consideration, even though in writing. B. Yes, as a novation, which superseded the original construction contract. Correct C. Yes, because it is fair and equitable in view of the unanticipated increase in the cost of materials. D. Yes, because the builder gave up his right to refuse to complete the building in reliance on the landowner's agreement to the modification.

A customer orders a tailor-made suit from a particular tailor. The tailor informs the customer that he would like the customer to make payment to the doctor next door, to whom the tailor owes a substantial sum of money. The customer fails to pay. Does the doctor have a claim against the customer? •A) Yes, because there was an effective assignment to the doctor. •B) Yes, because the duty to pay was effectively delegated to the doctor. •C) No, because the assignment materially changed the duty of the customer. •D) No, because the assignment is for a personal purpose rather than a business purpose.

•8. A seller agrees to sell a buyer a particular Rembrandt painting that the buyer intends to hang in her living room. The seller breaches and the buyer sues for specific performance. Is specific performance available to the buyer under Article 2? •A. Yes, because the goods are unique. •B. Yes, because this is an example of "other proper circumstances." •C. No, because the buyer can find another Rembrandt on the market. •D. No, because this is not an Article 2 transaction as the buyer is not a merchant.

•Bob loans Sally $1,000 that is due on June 1. On that day, Sally has no cash but she promises to transfer her car to Bob in satisfaction of the loan. Bob agrees to accept the car in satisfaction. -A. What is the legal effect of such an agreement? -B. If Sally timely transfers her car to Bob, what is the legal effect of such transfer? -C. If Sally fails to transfer her car to Bob, what are Bob's options?

a •It is an "accord," which suspends Sally's duty to pay the $1,000. b. •It is a "satisfaction," which excuses Sally's duty to pay the $1,000. c •Bob may sue Sally for breach of the original agreement (i.e., the $1,000) or for breach of the accord (i.e., the car). Of course, Bob may recover only one satisfaction (i.e., either the $1,000 or the car).

•4. On June 1, T, a wholesaler of widgets, received a purchase-order form from W, a retailer of widgets, in which W ordered 10 anti-recoil widgets for delivery no later than August 30 at a total price of $1,000, as quoted in T's catalog. On June 2, T mailed to W its own form, across the top of which it was written, "We are pleased to accept your order. This acceptance is expressly made conditional on your assent to the additional or different terms contained herein." T's form contained the same terms as W's form except for an additional printed clause that provided for a maximum liability of $10 for any breach of contract by T. As of June 5, when W received T's acceptance form, which of the following is an accurate statement concerning the legal relationship between T and W? •A. There is no contract because the liability-limitation clause in T's form is a material alteration of W's offer. •B. There is no contract unless W thereafter consents to the liability-limitation clause in T's form. •C. There is an enforceable contract whose terms do not include the liability-limiting clause in T's form because such clause is a material alteration of W's offer. •D. There is an enforceable contract whose terms do not include the liability-limiting clause in T's form because W did not consent to the liability-limitation clause in T's form.

•4. Best Music, Inc. offers to buy from Sound Products Corporation (SPC) 100,000 blank Sony CDs. Without notifying Best, SPC timely ships 100,000 RCA CDs. This shipment is: •A. an acceptance of Best's offer. •B. a breach of the parties' contract. •C. both (a) and (b). •D. a counteroffer.

•From a seller of neon signs, a buyer orders a sign that says "Joe's Bar and Grill" at a price of $2,000. The seller is able to make the sign at a cost of $1,600 and will profit $400 from the transaction. When the sign is ready, the buyer repudiates the contract. From past experience, the seller knows there is no market for this sign. Without making any effort to resell the sign, the seller sues the buyer. What should the seller recover? •A. Nothing, because the seller did not make reasonable efforts to resell the sign. •B. $1,600, because that is the amount the seller lost on the contract. •C. $2,000, the contract price. •D. The seller should be awarded specific performance.

UCC Gap Fillers: Mode of Delivery

goods will be delivered and received in single lot.

•If a contract is illegal solely because a party does not have a required license, the enforceability of the contract depends on the purpose of the license: If the primary purpose of the license is to regulate the skill and quality of a particular occupation is the K enforceable?

UCC Gap Fillers: Time & Place of Payment

payment is due at time and place at which buyer is to RECEIVE goods. installment - payment due at time and place @ which buyer is to receive EACH installment buyer may pay by check, but seller may demand cash; in such event, buyer must be given a reasonable time to obtain cash.

UCC Gap Fillers: Date of Delivery

time for shipment shall be REASONABLE time. reasonableness depends on: - how complicated good is to make - past dealings of parties - practice of industry - needs of buyer party must give notice before treating sales K as breached due to passage of reasonable time for performance

If a party's manifestation of assent is induced by undue influence by the other party, the contract is ( Void or voidable ) by the victim

voidable

yes

Economic duress exists where (3 elements)

•(1) one party involuntarily accepted the terms of another, (2) circumstances permitted no other reasonable alternative, and (3) such circumstances were the result of coercive acts of the other party.

-A, with whom B has left a machine for repairs, makes an improper threat to refuse to deliver the machine to B, although B has paid for the repairs, unless B agrees to make a contract to have additional repair work done. B could use replevin to obtain possession of the machine, but because he is in urgent need of it and delay would cause him heavy financial loss, he is induced by A's threat to make the contract. Enforceable contract?

•No, B has no reasonable alternative, A's threat amounts to duress, and the contract is voidable by B.

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