Business Law - Chapter 16

Which of the following documents are not valid in most states if signed with an electronic signature?

- Court order - Will - Notice of foreclosure

Which of the following are types of contracts that must be made in writing to be enforceable?

- Made in consideration of marriage - That cannot be performed within one year - To pay the debt of another - Made by an executor of an estate to pay the debt of the estate - For the sale of goods of $500 or more - For any interest in land

Which of the following phrases constitute parol evidence?

- Something the plaintiff did before the contract was signed - Something the defendant said as he signed the agreement

Which of the following does the UCC requires in a contract?

- The signature of the defendant - The quantity of goods being sold

Mast Industries orally offered to sell certain textiles to Bazak International for $103,000. After a few days, Bazak sent a memorandum, signed by a Bazak officer, to Mast confirming the agreement, describing the goods, and specifying their quantity and the price. Mast received the memo but never responded. When Mast failed to deliver the goods, Bazak sued. Who will win?

Bazak

Jamila dies, leaving her best friend Anna as the executor of her estate. Luxury Motors Corp. (LMC) demands $22,000 that is it owed by Jamila, but her estate does not have the money to cover the debt. Anna promises LMC that she will use her own money to cover Jamila's debt, but then fails to do so. Why will LMC not be able enforce Jamila's promise?

Because the promise was not in writing and Anna is the executor of the estate.

Lauren verbally agrees to sell Dante 500 Bietigheimer apple trees, which are currently too small to be transported. Lauren and Dante agree that Lauren will have the trees delivered when they reach maturity in 18 months, and Dante will pay in full when he receives them. Dante then buys a 10 acre parcel of land that has soil suitable for Bietigheimer apple trees, and he pays a farmer to clear the land and begin preparing it for the arrival of the apple trees next year. Lauren then calls Dante and tells him that she is selling the trees to someone who offered her more money. Dante sues. What result?

Dante will win under promissory estoppel.

Which of the following are situations in which the court will probably admit parol evidence?

Duress Misrepresentation Fraud

Able orally agreed to pay Carr $800 to restore Able's antique car within 18 months, even though it was possible for him to complete the restoration in 10 months. The agreement is:

Enforceable because the work could be completed within one year.

An interest in land needs to be in writing.

Examples: A mortgage, An easement

Not an interest in land does not need to be in writing.

Examples: A short-term lease, Your cattle that graze on your property

A promise made in consideration of marriage is never enforceable.

False

Courts are skeptical of email contracts because they want to prevent parties from entering into contracts unintentionally.

False

If a defendant did not sign his full name on a contract, the contract will not satisfy the Statute of Frauds.

False

The Statute of Frauds was written to prevent fraud in criminal suits.

False

Which of the following agreements satisfies the UCC's requirements and may be enforced against Myla?

Geri will sell Myla 2,000 blueberry muffins tomorrow under their usual terms (signed) Myla.

Terrance, a recent college graduate, moves to New York City to open the second branch of his mother's business. He plans to work from his apartment full-time. The landlord of the apartment that Terrance applies for is not convinced that Terrance will be able to afford the rent. So Terrance's mother Gloria (who is extremely rich) speaks with the landlord and tells the landlord that if Terrance fails to pay his rent, Gloria will pay it for him. When Terrance fails to pay his rent, the landlord requests the money from Gloria who refuses. What result?

Gloria will not be responsible for Terrance's debt unless the landlord can prove that Gloria made the promise out of self-interest.

When Griffiths sold his house to Hippen, Griffiths orally agreed to buy the house back at the selling price if Hippen should happen to move within the next three years. Two years later, Hippen was transferred to Miami and tried to sell the house back to Griffiths, but Griffiths refused. Hippen sued for breach of contract, but Griffiths claimed there was never an enforceable contract. Who wins?

Griffiths wins. The purchase - or repurchase - of a house is a classic interest in land, and any such promise must be written to be enforceable.

Iggy verbally agreed to sell frozen hotdogs to Hachiro. He sent a signed memorandum to Hachiro, which read, "Pursuant to our conversation, this is to confirm your order of 100,000 frozen hotdogs for $0.15 each, which you will pick up at my manufacturing plant on November 1 of this year." Upon receiving the memorandum, Hachiro called Iggy and told him the deal was off. On November 1, Hachiro did not collect any hotdogs. If Iggy sues what will be the result?

Hachiro is bound by the memorandum because he never objected to it in writing.

Lorna and Igor make a verbal agreement that Lorna will buy a house Igor owns. They agree on the price and a closing date in sixty days. Before closing, Lorna moves into the house with her mother, remodels one of the bathrooms, and paints the kitchen. A week later Igor tells Lorna he does not want to go through with the deal. May Lorna force Igor to sell her the house?

Lorna cannot enforce the deal because her actions were not sufficient to be considered part performance.

Daquan designs and manufactures ReaderWranglers, which are beaded, nylon cords that attach to reading glasses and sunglasses, to help prevent people from losing them. Daquan calls Magnus, the CEO of several assisted living facilities for senior citizens, and they agree that Magnus will buy 10,000 ReaderWranglers for $3 each and that Daquan will deliver them to Magnus at Mount Olympus Seniors (MOS) in one month. Daquan arrives at MOS on the specified date with 8,000 ReaderWranglers and Magnus refuses to accept the delivery. Daquan sues. What result?

Magnus must pay for 8,000 ReaderWranglers.

Lewis hires Ricky to make some repairs to his sailboat. Repairs of this nature generally take eight months, but Ricky has a difficult time finding two pieces of equipment necessary for the job and it ends up taking him just over a year to finish the job. When Ricky is done, Lewis refuses to pay him saying that the contract is not enforceable. Is Lewis correct?

No, because it is possible to complete the contract within a year

Mariko wants to buy one of Clare's rowboats so the two draft a contract for its sale. The contract reads: "Binding Agreement: Mariko will buy one of Clare's small rowboats in February. Mariko will pay cash, and Clare will deliver the rowboat to Mariko." If both parties signed the agreement, will it satisfy the Statute of Frauds?

No, because it is too vague

Arabella sells Ann all of her bowling equipment for $1,100. The next day Arabella regrets the deal and tries to rescind the contract. Arabella argues that the agreement is invalid because it should have been in writing, and therefore she has to refund Ann the money, and Ann has to return the bowling equipment to Arabella. Is Arabella correct?

No, because the contract is fully executed.

Can a defendant who is being sued for breach of contract escape liability by arguing that the contract was void because it lacked the plaintiff's signature?

No, if the defendant signed the contract the agreement is valid

Norv and Wanda agree verbally that Wanda will buy Norv's house, and that Norv will also sell her his living room furniture for $1,000. They agree on a total price, and that the deal will close in thirty days. Norv prepares his house for Wanda, taking out all his possessions, and leaving the living room furniture. Two weeks later, Wanda tells Norv she does not want to go through with the deal. Can Norv enforce his agreement with Wanda?

Norv cannot enforce the deal because it was not in writing.

Doreen calls Peruvian Pastimes (PP) and orders three sweaters customized with the initials of her grandchildren. A week after PP starts knitting the sweaters, Doreen sends a letter cancelling her order. PP sues. What result?

PP will win if it cannot sell the sweaters elsewhere

Sabrina tells her boyfriend Alexander that if they get married, she will give him 50 percent ownership of her tech startup company. Alexander quits his job as a teacher and begins working at Sabrina's company. The two get married but divorce ten months later. Alexander claims that Sabrina owes him 50 percent of her company. Please rule.

Sabrina owes Alexander nothing because the agreement was not in writing.

Landlord owned a clothing store and agreed in writing to lease the store's basement to another retailer. Both parties signed a written lease that (1) described the premises exactly, (2) identified the parties, and (3) stated the monthly rent clearly. However, a trial court held that the lease did not satisfy the Statute of Frauds. Why not?

The writing needs to state the effective dates of the lease.

A contract for the sale of goods for $750 is unenforceable if it is not in writing.

True

A contract may consist of several documents that were written at different times.

True

A court will admit parol evidence if it determines that a contract is ambiguous.

True

Carlos has filed suit against Aiden, alleging that they had a binding agreement. When Aiden is cross examined by Carlos's lawyer at trial, Aiden admits that he and Carlos had agreed to the terms verbally. Aiden's statement means the contract may be enforceable.

True

If a court determines that a contract is incomplete, it will admit parol evidence.

True

Lisa assigns a contract to buy a used Chevy "as is" from Alejandro. Shortly after, the car's alternator needs to be replaced and Lisa sues Alejandro. Will Lisa be able to admit evidence that Alejandro told her the car had a brand new alternator?

Yes, even if the contract is fully integrated Lisa can probably testify regarding Alejandro's fraudulent statements

Piper is suing Dimitri for breach of contract. Her lawyer admits into evidence a fully integrated contract signed by Piper and Dimitri stating that Dimitri will sell Piper his beach house for $250,000. Will Dimitri be allowed to testify that he only signed the contract because Piper had a gun to his head?

Yes. The court will admit evidence that Dimitri signed under duress.

In Mayo v. North Carolina State University, the court: a. refused to admit parol evidence because the parties intended the employment agreement to be a full integration, and because the documents were unambiguous. b. admitted parol evidence needed to clarify NCSU's arguments. c. admitted parol evidence submitted by Dr. Mayo that proved NCSU changed the terms of the employment contract.

a. refused to admit parol evidence because the parties intended the employment agreement to be a full integration, and because the documents were unambiguous.

The parol evidence rule: When two parties make _______, neither party may use ________ to contradict, vary, or add to its terms.

an integrated contract parol evidence

E-signatures ____________________.

are valid in all 50 states

The Statute of Frauds was drafted originally _________, who later repealed it. Today, ________ entirely repealed its Statute of Frauds.

by Parliament no state has

An employment contract that does not specify the duration of the employment ________________.

can be terminated at any time by either party

When one person promises to pay the debt of another as a favor to that debtor, it is called a(n) ________ and it generally ____________ need to be in writing to be enforceable. When the promisor makes the promise primarily out of self-interest, the agreement _________ need to be in writing, under the _________ rule.

collateral promise does does not leading object

The Statute of Frauds prevents the enforcement of a(n) ___________ contract, which is a contract in which the parties have not __________. These contracts are _________.

executory fulfilled their obligations not illegal

A(n) __________ is a writing that the parties intend as the final, complete expression of their agreement.

integrated contract

Compared to the common law,

it is easier to form a valid contract under the UCC.

To provide juries with more __________ about whether or not a contract existed, Parliament passed the _________. It required that in several types of cases, contracts had to be _________. One category was contracts involving interests in ___________.

reliable evidence Statutes of Frauds in writing land

Parliament _________ the Statute of Frauds because it concluded the statute was __________.

repealed helping people commit fraud

In 1677, the British legal system was structured in a way ______________.

that made it susceptible to witnesses lying on the stand.

The key difference between the common law Statute of Frauds and its UCC counterpart is that __________ does not require __________ terms of the agreement to be in writing. The Code ____________.

the Code all of the specific looks for an indication that the parties reached an agreement

The UCC requires a writing for __________.

the sale of goods priced $500 or more

The Statute of Frauds allows a party to cancel future obligations but not ____________, so once a contract is ___________ it makes no difference that it was unwritten.

undo past actions fully executed

Informal contracts often fail to satisfy the Statute of Frauds because they are ____________ or ___________.

vague incomplete