Contracts (Barbri Q&A)
A music promoter planned to open a discotheque and bar on the outskirts of town. He hired a builder to build it, with a completion date of September 15. Although the promoter was very optimistic that the disco would be a big success, its profitability could not be determined with certainty. First year profits were estimated to be about $1,000 per day. To encourage the builder to work in a timely manner, the contract included a liquidated damages clause, providing that the builder would pay the promoter $10,000 per day for each day the contract ran over its completion date. The builder's work progressed smoothly and would have been finished on time, except that the builder failed to place in a timely manner his order for the disco's specially manufactured dance floor lighting. Consequently, the work was not completed until October 15. The promoter sued the builder for breach of contract. The builder called a witne
$10,000, representing the disco's lost profits.
On February 1, the owner of a bowling alley read in a magazine an ad from a major manufacturer of bowling balls offering sets of 40 balls in various weights and drilled in various sizes for $10 per ball. The owner immediately filled out the order form included in the ad for the 40 balls and deposited it, properly stamped and addressed, into the mail. On February 2, the bowling alley owner received in the mail a letter from the manufacturer, sent out as part of its advertising campaign, stating in relevant part that it will sell the bowling alley owner 40 bowling balls at $10 per ball. A day later, on February 3, the manufacturer received the bowling alley owner's order. On February 4, the balls were shipped. On what day did an enforceable contract arise?
February 4, the day the balls were shipped.
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?
Yes, because he kept the car for six months after reaching the age of majority.
On April 15, a wholesaler of tulip bulbs telephoned a local nursery and offered to sell to the nursery 80 gross of tulip bulbs for $8,000, not including delivery charges. The nursery accepted immediately. On April 17, the nursery sent the wholesaler an email confirming the deal for the sale of 80 gross of tulip bulbs for $8,000, and stating that it anticipated a waiver of the delivery charges because of the size of the order. On May 3, the wholesaler telephoned the nursery and stated that, due to a poor growing season for tulips, it would not be able to supply any tulip bulbs to the nursery. If the nursery brings suit against the wholesaler and the wholesaler asserts the Statute of Frauds as a defense, will the nursery prevail?
Yes, because its April 17 email contained the quantity term.
On April 1, a music store owner offered to sell a rare piano to his best customer, a concert pianist, for $100,000. The following day, the pianist, who performs around the world with two of the several pianos he has purchased from the store, wrote to the store owner: "I have decided to purchase the piano. A check for $100,000 is enclosed. I am leaving in one week for Canada. I will be gone for one month and will pick up the piano when I return. I will pay you to store the piano in your air-conditioned warehouse." One week later, the pianist left for Canada without hearing from the music store owner. What does the letter that the pianist wrote to the store owner constitute?
An acceptance, and the store owner must store the piano but is entitled to the reasonable value of that service.
A contractor with a contract to deepen a well in a drought-stricken area mistakenly entered onto the wrong property and proceeded to deepen the well there. The owner of the property saw the contractor at work but said nothing. When the contractor completed the job, the property owner refused to pay his bill, and the contractor filed suit. In her answer, the property owner stated that she thought the contractor was employed by the county and that the government was paying for the work because of the drought. She knew, however, that two of her neighbors had recently paid private contractors to deepen their wells. Which of the following arguments offers the contractor his best chance for winning his lawsuit?
Implied-in-fact contract.
A consumer purchased a new television set from an electronics store. When he got home, he opened the box and found an owner's manual that contained operation instructions, warnings regarding the danger of electricity, and a warranty that stated: "The store expressly warrants that this set shall be free of manufacturing defects for 30 days. If a set is defective, the store's liability shall be limited to the cost of repair or replacement of defective parts. The store "HEREBY DISCLAIMS ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF FITNESS FOR PARTICULAR PURPOSE AND THE WARRANTY OF MERCHANTABILITY."" Five weeks later, after the set was properly installed, the consumer turned on the set, heard a crackling noise, and watched as his television exploded and was destroyed. Under which of the following theories will the consumer most likely recover? Responses
Breach of the implied warranty of merchantability.
An aunt agreed to pay for any lace shawl that her niece purchased at a certain local shop if the niece wore the shawl to the town's ethnic festival. The niece despised shawls, but she really loved her aunt and did not want to hurt her feelings, so she purchased a $300 lace shawl from the shop. She accompanied her aunt to the ethnic festival wearing the shawl, and the aunt was very pleased. The aunt died shortly after the festival and her estate refused to reimburse the niece for her purchase. The niece filed suit to collect the $300 from the aunt's estate. Which legal theory will offer the niece her best chance of winning the case?
Bargain and exchange.
A buyer for a toy store emailed a toy distributor to place an order for 1,000 units of a video game. In the email, the buyer asked the distributor if the game was compatible with a certain popular video gaming system since the games were being ordered for resale. The distributor's reply said, "That gaming system's name is listed on the packaging of the game." Both parties were unaware that the video game company had just released a new generation of consoles. Upon receiving the shipment, the buyer discovered that the game does not work with the latest console. The buyer is uncertain whether it can re-sell all of the games since they only work on older consoles. Which of the following is the most appropriate remedy for the buyer?
Rescission of the contract.
On April 10, the owner of a small farm mailed a letter to a new resident of the area who had expressed an interest in buying the farm. In this letter, the farm owner offered to sell the farm to the resident for $100,000. The offer expressly stated that the offer expires on June 1, "if acceptance by the offeree has not been received by the offeror on or before that date." On the morning of June 1, the resident sent a written acceptance to the farm owner by messenger. However, through negligence of the messenger company, the acceptance was not delivered to the farm owner until June 2. On June 4, the farm owner entered into a contract to sell the farm to another buyer for more money but did not inform the resident of the transaction. When the resident followed up by phone on June 10, the farm owner told him that he had sold the farm to another buyer. Which of the following is the most correct statement?
No contract between the farm owner and the resident arose on June 2.
The owner of a soon-to-be-opened pastry shop wrote to a large supplier of premium confectioner's sugar about placing a standing order for sugar to meet the pastry shop's frosting and other needs. By return mail, the supplier offered the shop owner a discounted price of $5 per five-pound bag—$3 per bag less than its regular price—based on the parties' "many years of pleasant business association." Because the shop owner had not done business with the supplier before, she realized that the supplier had confused her shop with another pastry shop having a similar name. However, the shop owner kept quiet about the mixup and placed an order for 200 bags of sugar at the discounted price of $5 per bag. Shortly before it shipped the sugar to the shop owner, the supplier discovered that it was mistaken about the identity of the shop owner and that the order was for a new pastry shop that was opening soon. It sent
No, because $8 per bag was a fair market price for the sugar at the time of the contract.
A wholesaler persuaded a retailer to order a line of dolls for the Christmas season, even though the retailer was skeptical of the dolls' marketability. The contract provided that the retailer would pay $1,500 for its order of 100 dolls if they sold during the Christmas season. Some dolls did sell, but on February 12, the retailer had 80 of them in inventory. He sent the wholesaler notice that he would be returning the 80 dolls. The wholesaler replied that it did not want the dolls back, that the retailer should continue to try to sell them. Despite this reply, the retailer sent the wholesaler a check for $300 and shipped the dolls to the wholesaler, who refused to accept them but did accept the check. Thereafter, the retailer held the dolls at his warehouse. The wholesaler brought an action to recover the $1,200 balance. Will the wholesaler likely recover?
No, because sale during the Christmas season was a condition precedent to payment.
On July 1, a cattle rancher offered to sell his ranch to a dairy farmer for $150,000. The dairy farmer paid the cattle rancher $1,000 to hold the offer open for a period of 30 days. On July 10, the dairy farmer wrote to the cattle rancher, telling him that he could not pay more than $100,000 for the ranch, and that if he would not agree to accept that amount, he would not go through with the deal. The dairy farmer received no reply from the cattle rancher. On July 29, the dairy farmer mailed a letter to the cattle rancher telling him that he accepted his offer to sell the ranch and enclosed a check for $150,000. The cattle rancher received this letter on August 1. Has a contract been formed between the parties for the sale of the ranch?
No, because the cattle rancher did not receive the dairy farmer's acceptance within 30 days.
A retailer entered into an oral contract with an office supply wholesaler to buy 100 file boxes for an upcoming back to school sale at the retailer's store. The wholesaler agreed to deliver the file boxes in two weeks at a cost of $4 per file box. A week later, the retailer phoned the wholesaler and asked if she could increase her order to 200 file boxes. The wholesaler agreed. The wholesaler delivered the 200 file boxes as promised, but the retailer accepted only 150 upon discovering that she lacked storage space for all 200. May the wholesaler recover damages with respect to the 50 file boxes that were not accepted?
No, because the contract as modified was for $800.
A homeowner contracted with a local builder to 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?
No, because the contract is for personal services.
The owner of a stationary bicycle wrote a letter to her friend offering to sell her stationary bicycle to him for $150. The friend received the letter on January 18. On January 19, he mailed a letter back saying that he was not interested in purchasing the bike because he had just purchased a gym membership. However, the friend changed his mind the next day and mailed a letter to the owner accepting her offer to sell the bicycle and enclosing a certified check for $150. The owner received the friend's rejection letter on January 21 but put it aside without reading it. The next day, she received the friend's acceptance letter, which she opened and read immediately. Do the parties have a contract?
No, because the mailbox rule does not apply-whichever is received first controls.
On December 6, the owner of an electronics store sent a written request to a computer manufacturer asking for the price of a certain laptop computer. The manufacturer sent a written reply with a catalog listing the prices and descriptions of all of his available computers. The letter stated that the terms of sale were cash within 30 days of delivery. On December 14, by return letter, the store owner ordered the computer, enclosing a check for $4,000, the listed price. Immediately on receipt of the order and check, the manufacturer informed the store owner that there had been a pricing mistake in the catalog, which should have quoted the price as $4,300 for that computer. The store owner refused to pay the additional $300, arguing that his order of December 14 in which the $4,000 check was enclosed was a proper acceptance of the manufacturer's offer.
No, because the store owner's December 14 letter was a proper acceptance of the manufacturer's offer.
A college student was interested in renting a particular apartment because of its very distinctive features, but she was also considering a number of other options. Because she wanted some time to make up her mind, she contacted the building's rental agent and asked him to reserve her right to rent the particular apartment. They made the following written agreement: "Upon payment of $200, the student shall have the right to inform the agent that she wishes to rent the apartment any time on or before July 1. If she fails to notify the agent that she wants the apartment on or before July 1, the agent shall keep the $200. However, if she does notify the agent on or before July 1 that she desires the apartment, the agent will apply the $200 to her first month's rent." The student paid the agent $200. On June 9, the agent rented the apartment to a third party who was unaware of the agent's agreement with the student. On J
No, because the student's right to specific performance was cut off by the lease to the third party. No, because the student's right to specific performance was cut off by the lease to the third party.
The owner of an apartment building contracted with a painter to paint the porches of the apartments for $5,000. The contract was specifically made subject to the owner's good faith approval of the work. The painter finished painting the porches. The owner inspected the porches and believed in good faith that the painter had done a bad job. The painter demanded payment, but the owner told him that the paint job was poor and refused to pay. The painter pleaded that he was desperately in need of money. The owner told the painter that she would pay him $4,500, provided he repainted the porches. The painter reluctantly agreed, and the owner gave the painter a check in the amount of $4,500. The painter went to his bank, indorsed the check "under protest" and signed his name, then deposited the check in his account. He never returned to repaint the porches. The painter sues the owner for $500, which he believes is still owe
No, even if he repaints the porches.
A general contractor who wished to bid on a construction project solicited bids from a variety of subcontractors. Four electrical subcontractors submitted bids to the contractor in the amounts of $75,000, $85,000, $90,000, and $95,000, respectively. As he was making out his company's bid, which was higher than he wanted it to be, the contractor called the low bidder on the electrical work and told him, "We won't be able to do it with your present bid, but if you can shave off $5,000, I'm sure that the numbers will be there for us to get that project." The low bidder told the contractor that he could not lower his bid, adding that the bid he submitted was based on a $15,000 error, and he could not do the job for less than $90,000. The contractor lost the construction job and subsequently sued the low bidder. For what is the low bidder liable?
Nothing, because the low bidder rejected the contractor's counteroffer.
A builder contracted to build a house for a newly married couple. Terms of the contract provided that the builder would receive the contract price when the building was fully completed. Just when the builder had completed one-half of the structure, a tornado struck the area and demolished the building. What is the builder entitled to recover from the couple under the contract?
Nothing.
The proprietor of a food brokerage entered into oral negotiations with a manufacturer of gourmet food products for restaurants and select retail outlets. The proprietor wished to secure an exclusive distributorship for the manufacturer's products in the six New England states. At the end of the first stage of oral negotiations, the parties had come to an agreement on the major points, and only a few minor points of disagreement remained. Both, however, were anxious to begin distribution of the food products in New England, and the manufacturer assured the proprietor, "Don't worry about it; we'll work these things out." Assuming from this that he would be the New England distributor for the food products, the proprietor leased larger facilities, bought a number of trucks, and hired new workers. Shortly thereafter, the manufacturer informed the proprietor that another distributor, and not the proprietor, woul
Promissory estoppel
A retailer of computers decided to purchase a certain model of high-speed printers from a wholesaler and then offer the printers for sale as part of a complete system with its keyboards and computers. Because printing speed was important, the written agreement between the wholesaler and the retailer provided that the printers must be able to print 40 pages per minute or more. The wholesaler was to provide 100 printers for the retailer at $300 each. The printers were to be delivered on March 15, and the retailer was to pay for the printers when they were delivered. When the shipment arrived, the retailer paid for it with a cashier's check for $30,000. However, when the retailer put one of the printers online with its system, it found that the printer was printing at a rate of only 30 pages per minute. The retailer then tested the entire shipment and found that none of the printers met the contract specifications. Al
The 20 printers that the retailer sold to the law firm.
A steelmaker purchased a tube rolling machine from a manufacturer of heavy machinery. The machine was sold unassembled for a price of $150,000, with $25,000 payable on delivery and the balance ($125,000) to be paid in 10 monthly installments of $12,500 each. After the machine parts were delivered, the steelmaker contacted an assembly company that specialized in assembly and installation of large and complex manufacturing machinery, and told the company that the machinery had to be up and running within 45 days, or the steelmaker would be in breach of a major contract that it relied on for much of its current revenue. The company agreed, in a written contract with the steelmaker, to assemble and install the tube rolling machine within 45 days at a price of $15,000. Two weeks later, the manufacturer that sold the tube rolling machine to the steelmaker learned that the assembly company was planning to stop work, due to
The assembly company owed the manufacturer no preexisting duty to complete the job for the steelmaker, and such completion was sufficient bargained-for consideration for the manufacturer's promise to pay the additional $3,500.
A park board in a large suburb announced that it was accepting bids for renovation work on its recreation center. A builder advertised for sub-bids for the electrical work, and a local electrician submitted to the builder by electronic bidding service a sub-bid of $130,000. However, due to the bidding service's negligence, the sub-bid that the builder received from the electrician read $30,000 instead of $130,000. Because this was the lowest sub-bid that the builder received for the electrical work, and $60,000 less than the next lowest sub-bid, the builder awarded the subcontract to the electrician. Based in part on the electrician's sub-bid, the builder came up with a bid for the job that beat out all of the competition and won the job. What is the electrician's best argument to successfully refuse to perform the resulting contract
The builder should have been alerted to the existence of a mistake in the sub-bid.
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 after. 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, what is the likely reason?
The contract was oral.
A widow wanting to give her daughter a special wedding gift entered into a written agreement with a contractor to build a house for $300,000 on property she owned. Detailed specifications regarding the layout and materials to be used were included in the written agreement between the widow and the contractor. Just as the contractor was about to begin construction of the house, he discovered that an underground river bisected the widow's property, leaving insufficient subterranean support to construct the house as planned. Given this discovery, the contractor refused to build the house for $300,000. If the widow files suit demanding specific performance or damages from the contractor, which of the following additional facts, if proven, would most favor her case?
The detailed specifications in the agreement had been drawn up by the contractor, as were other blueprints and plans for the house.
A contract between a camera store and a distributor of camera lenses called for the sale of 20 standard zoom lenses that would be compatible with a particular manufacturer's film and digital cameras, for a price of $300 per lens. After an employee of the camera store with authority to accept deliveries accepted shipment of the zoom lenses, store personnel learned that the lenses would not work with the manufacturer's film camera, but instead were compatible only with the manufacturer's digital camera. The camera store filed suit and kept the lenses. At trial, the store's attorneys established that the nonconforming lenses were worth $200 per lens. Which of the following should be the measure of damages applied to determine the camera store's loss?
The difference between the value of the lenses as received and their value if they had been compatible with the manufacturer's film camera—$2,000.
A wholesale seller of turquoise received an e-mail from a retail seller of Indian jewelry, a long-time customer, which read: "Send 200 16-inch strands of Kingman turquoise beads at your usual price of $45 per strand." The wholesaler e-mailed the customer back a confirmation, promising to ship the strands within 10 days. However, the wholesaler currently had no strands in stock and so began making phone calls to locate them in sufficient quantity. Ultimately, he secured the strands of beads. However, before he could ship the beads to the retailer, he received another e-mail from the retailer canceling the order without explanation. The wholesaler immediately set out to find another buyer for the beads, but found that Kingman turquoise had fallen out of favor. Consequently, the wholesaler was forced to sell the strands of beads at a "salvage" price of $4,000. If the wholesaler sues the retailer for damages, how
The full contract price plus incidentals, less the $4,000 salvage price
In March, a homeowner contracted with a buyer to sell his house for $280,000, with the purchase price to be paid and the deed to be delivered on July 1. On May 1, the buyer wrote the homeowner a letter, stating that she decided to buy another house instead. Which of the following is true?
The homeowner may sue the buyer upon receipt of the letter.
A wholesale seller sent a fax to a manufacturer with whom he had done business before: "Send 500 'Madewell' chairs at your usual price." The manufacturer responded, also by fax, that the line was being discontinued, but he would ship his last 500 chairs at $75 per chair, his usual price. The manufacturer immediately began the paperwork for processing the order and started preparing and packing the chairs for shipment. Before the chairs could be delivered, the wholesaler canceled his order, noting that the price was too high. The day after receiving the wholesaler's cancellation, the manufacturer sold the chairs to another buyer for $75 each. If the manufacturer sues the wholesaler for damages, how much should he recover?
The incidental costs of preparing the paperwork and other office costs connected with preparing and packing the chairs for shipment to the wholesaler.
On November 5, an electronics store owner realized that his stock of 15 copies of the most popular video game of the holiday shopping season would not last until the first of the next month. Seeing an advertisement from the manufacturer of the game in a trade journal listing its price at $3,000 per hundred, with delivery one week from order, the store owner e-mailed to the manufacturer an order for 100 copies of the game at $3,000 per hundred. There were no further communications between the store owner and the manufacturer. By November 25, the store owner realized that the manufacturer was not going to deliver any of the video games. He thus was forced to obtain additional stock by purchasing from a middleman at a cost of $4,000 per hundred. The store owner brings an action for breach of contract against the manufacturer.
The manufacturer, because it never accepted the offer contained in the store owner's e-mail.
A large appliance store entered into a written agreement with a television manufacturer for 20 high definition televisions for $300 each. The shipment arrived on time and was paid for with a cashier's check by the appliance store. However, when the appliance store tested the TVs, it found that none of them met the high definition specifications in the contract, even though they functioned fine otherwise. The appliance store notified the manufacturer that it was rejecting the TVs because they were nonconforming, but the manufacturer did not want them returned. What may the appliance store recover?
The money it paid for the TVs, but it may sell them for the manufacturer's account.
The owner of a personal watercraft put an ad for its sale in the paper. Her neighbor saw the ad and told her that he wanted to buy the watercraft but had to arrange for financing. The owner suggested that they write a contract for sale then and there so that they would not have to waste any time while he got his financing. They orally agreed that the contract would not become binding unless the neighbor obtained financing, but the written contract did not mention this and appeared to be a fully integrated document. The neighbor could not obtain financing and the owner brings suit to enforce the written contract. Who will prevail?
The neighbor, because obtaining financing was a condition precedent.
The owner of a one-acre parcel of land with a small house on it rented the property to a professor of a nearby college at a monthly rental of $500. Several years later, after the professor got tenure, the parties orally agreed that the professor would purchase the property from the owner for the sum of $60,000, payable at the rate of $500 a month for 10 years. They agreed that the owner would give the professor a deed to the property after five years had passed and $30,000 had been paid toward the purchase price, and that the professor would execute a note secured by a mortgage for the balance. The professor continued in possession of the property and made all monthly payments in a timely fashion. When he had paid $30,000, he tendered a proper note and mortgage to the property owner and demanded that she deliver the deed as agreed. The owner refused because valuable minerals had been discovered on adjacent parcels in
The professor's payments are as consistent with there being a landlord-tenant relationship between them as with there being an oral contract.
A bulk retailer of accessories for musical instruments placed an advertisement in a trade magazine popular with those in the music business, offering for sale 50-count boxes of a particular type of mouthpiece for use with the French horn, minimum purchase 10 boxes, at $100 per box. In response to the advertisement, the owner of a large store that sold brass and woodwind instruments in its shop and over the Internet sent a written order to the bulk retailer for 12 boxes (50-count) of the mouthpiece. In his letter that accompanied the order, the store owner stated that he would send the bulk retailer his payment of $1,200 upon delivery. The letter also said that the mouthpieces must fit onto three specified models of French horn. The day after receiving the written order and letter from the store owner, the bulk retailer shipped 12 boxes (50-count) of the mouthpiece to him. Accompanying the invoice on the boxes was a l
The store owner's letter was an offer, and shipment of the units was an acceptance.
A downtown department store engaged an electrician to service all electrical appliances sold by the store for a flat fee of $5,000 per month. Under a written contract signed by both parties, the store was responsible for pickup and delivery of the appliances to be repaired and the billing for the work. By its terms, the contract would continue until either party gave 180 days' written notice of its intent to terminate. Several months ago the electrician informed the store that he was losing money on the deal and was in financial trouble. He requested in good faith that the fee for the next three months be increased by $1,000 and that this increase be paid to a local bank to help pay off a loan that the bank had made to the electrician. The store orally agreed to so modify the original contract. However, the store did not pay the bank and now the bank is suing the store for $3,000. Who will prevail?
The store, because there was no consideration to support the promise to pay the bank.
A corporation whose subsidiaries include a major hotel chain planned to build a new hotel and advertised for bids to build the hotel within the next six months. Four bids were received, for $17 million, $17.2 million, $17.4 million, and $15 million. The corporation's chief financial officer reviewed the bids, then emphatically told the corporation's chief executive officer ("CEO") that there was "no way" the low bidder could make a profit on the $15 million bid. The CEO made no response. In fact, the builder had stayed up for 72 hours without sleep preparing the bid for the hotel project and had neglected to include the plumbing expenses in the bid. Typically, the cost of plumbing, including the shop's profit, would have been about $2 million. Shortly after the $15 million contract was signed by the CEO and the builder, the builder discovered his mistake and telephoned the CEO to tell her that he had fo
Yes, because the CEO was on notice of the builder's mistake.
The owner of an old car parked it in front of his house with a "for sale" sign in the windshield. In response to an inquiry from his neighbor, the car owner said that he would take $400 for the car. The neighbor responded, "You've got a deal." Because it was a Sunday, and the banks were closed, the neighbor told the car owner that he would come to his house with the $400 the next day at about 6 p.m. The car owner said that was fine. At 9:15 the next morning, the car owner called his neighbor and told him that when they had talked the previous day, he forgot that he had just put two new tires on that car and that he would need an extra $50 to cover their cost. The neighbor agreed to bring $450 in cash to the car owner's house at about six o'clock. Is the neighbor legally bound to pay the car owner the additional $50?
Yes, because the contract, as modified, does not need to be in writing.
An electronics store located in Los Angeles, California, purchases electronics from an electronics corporation located in San Antonio, Texas. On January 19, the electronics store mailed to the corporation an order for $200,000 worth of electronics, specifying that delivery was to be no later than February 25, F.O.B. South Texas Railroad Depot, San Antonio, Texas. The corporation delivered the electronics to the railroad depot on February 15 and notified the electronics store by fax that its order was scheduled to arrive at the Southern Pacific Railroad Depot in Los Angeles on February 20. On February 17, the corporation learned that the electronics store was insolvent. The corporation demands immediate payment in cash for the electronics. Is this demand permissible?
Yes, because the electronics store is insolvent.
The general partner of a two-person partnership committed suicide because of gambling debts. His partner, who was a limited partner and the general partner's uncle, was besieged by creditors of the partnership who wanted their money. The jurisdiction statutorily limited the liability of limited partners for debts of the partnership or acts of the general partner to the extent of their investment in the partnership. However, the limited partner was unaware of this and believed that he was liable to all who had claims against the partnership. The limited partner told an unsecured creditor of the partnership that he would pay the partnership debt if the unsecured creditor would hold off filing an involuntary bankruptcy petition against the partnership. In a bankruptcy action filed by secured creditors, the assets of the partnership, which were very small, were consumed by the costs of the proceedings and no creditor r
Yes, because the limited partner's promise was supported by a bargained-for exchange
A farmer in a small town suffering a severe drought contacted a scientist in another county who claimed to have perfected a rainmaking machine. The farmer and the scientist entered into an agreement providing that the scientist would be paid if he made it rain. The agreement did not specify an amount of payment or any deadline by which it must rain. After several days of trying without success, the scientist said that the machine might work better at a higher elevation. A neighbor who lived on higher ground agreed to let the scientist place the rainmaking machine on his land and further told the scientist that if he made it rain before the end of the following day, he would pay him $20,000. The scientist placed the machine on the neighbor's land. By nightfall of the same day, clouds had begun to gather over the town, and the next morning it was pouring rain. If the neighbor refuses to pay the $20,000 to the scienti
Yes, because the neighbor's promise was supported by the consideration that the scientist make it rain by the next night.
An insurer offered a plan to cover an insured's catastrophic illnesses for the remainder of the insured's life in exchange for a large one-time payment at the inception of coverage. Because the program was experimental, the insurer would accept only a fixed number of applications during the enrollment period. A recent retiree in good health was one of the applicants accepted, and he enrolled in the program. He paid the one-time premium of $30,000 a few days before coverage began. The day after his coverage started, he was struck by a bus and killed. The executor of the retiree's estate reviewed the policy and immediately notified the bank to stop payment on it. The insurer then filed suit against the retiree's estate. Will the court compel the estate to pay the premium to the insurer?
Yes, because the risk of the timing of the retiree's death was assumed by both parties and built into the cost of the contract.
