BLAW exam 2
Pre-existing duty
A promise to perform an obligation that the promisor is already legally required to perform.
REMEDY
A remedy is the method a court uses to compensate an injured party.
Preexisting duty
A service that someone is already obligated to do
Unforeseen circumstances
A situation different from what the parties anticipated
Critics of "moral consideration" argue that it gives judges leeway to enforce promises whenever they feel that it is just.
True
The element of a contract that states the parties must be adults of sound mind is consent.
false
If LGS is the only boat repair shop for 100 miles, will this help or hurt Brockwell's case?
it will help his case because it indicates there will be unequal bargaining power
If the court finds that most of LGS' clients are utterly dependant on their boats for transportation
it will probably mean lgs is in a business of great public importance
The basic distinction between a bilateral contract and a unilateral contract is that
only one promise is involved in a unilateral contract
An employment contract is an example of a personal satisfaction contract.
true
Any ambiguity in a contract is interpreted against the party who drafted the contract.
true
T/F A minor can disaffirm a contract for any reason at all, and may do so even once he is no longer a minor.
true
T/F After her 18th birthday Lora may, by words or action, ratify a contract she made during the previous year.
true
T/F Alice offers to sell her car to Barry for $500, and Barry accepts. Alice's car has a market value of $1,000 but this fact is unknown to Alice. The contract is enforceable.
true
Amy, a baker, has found her dream home, but cannot afford the down payment. Amy's brother agrees to loan her $30,000 for the down payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her brother's wedding cake for his wedding next month instead of paying back the loan, so that she can buy new equipment for her bakery. Amy's brother agrees. How much money does Amy owe her brother?
$0 because an agreement to accept different performance in lieu of full payment of liquidated debt is binding.
Dementas is entitled to
$5000
Courts may award damages called quantum meruit, which means
'as much as he deserves'
Which of the following are ways in which an offer can be rejected?
- Counteroffer - Expiration - Operation of Law - Rejection
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 does the UCC requires in a contract?
- The signature of the defendant - The quantity of goods being sold
Under the UCC, which of the following are ways that organizations can prevent accord and satisfaction?
- Within 90 days of cashing a "full payment" check, repaying the same amount to the debtor - Notifying debtors that offers to settle for less than the full debt must be made to a particular official
1. Rescind 2. Voidable 3. Void 4. Disaffirm
1. Formal cancellation of a contract by a court. 2. A contract that may be canceled by the party who lacks capacity. 3. A contract that is illegal from the beginning and may not be enforced. 4. To notify the other party to a contract that you refuse to be bound by it.
A court would likely apply the substantial performance doctrine to which of the following contracts?
1. a jazz trio that plays at a party 2. the construction of a well on residential property 3. a cleaning crew that is hired to tidy up a movie theater
Because the amount owed is in dispute, the restaurant can avoid creating an accord and satisfaction by
1. refusing to deposit the check, 2. sending sami a check for $30 within 30 days of depositing her check
Which of the following are advantages of hiring a lawyer?
1. she can serve as the bad guy 2. it communicates to the other parties that you will not be taken advantage of 3. it communicates to other parties that you are taking the deal seriously
Some contracts require that any amendments be in writing. Which of the following are ways that a written amendment can be added to a contract?
1. signing an amendment 2. rewriting the entire contract to include the changed provisions 3. crossing out the wrong language and replacing it by hand with the correct terms
A contract clause which specifies the amount of damages to be paid in the event of a breach is called a. a liquidated damages clause. b. a covenant of damages clause. c. an incidental damages clause. d. a reliance interest of damages clause.
A
If a seller breaches a contract for the sale of goods, is a buyer required to "cover" by purchasing substitute goods? a. No, the buyer may choose to cover but he is not required to do so b. Yes, the buyer is obligated to make a good faith effort to mitigate his own damages before he can recover any money from the seller c. Yes, if it prevents consequential damages
A
promisor promisee
A ___ makes a promise to a ___ .
Past consideration
A completed act
CONDITION
A condition is an event that must occur before a party becomes obligated. It may be stated expressly or implied, and no formal language is necessary to create one.
Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is:
A condition precedent.
UNIFORM COMMERCIAL CODE (UCC)
A contract or memorandum for the sale of goods may be less complete than those required by the common law. The basic UCC rule requires only a memorandum signed by the defendant, indicating that the parties reached an agreement and specifying the quantity of goods. Between merchants, even less is required. If one merchant sends written confirmation of a contract, the merchant who receives the document must object within 10 days or be bound by the writing. In the following special circumstances, no writing may be required: the goods are specially manufactured, one party admits in litigation that there was a contract, or one party pays for part of the goods or delivers some of the goods.
DEBT OF ANOTHER
A promise to pay the debt of another, including promises made by executors to pay an estate's debts.
LIQUIDATED DAMAGES
A liquidated damages clause will be enforced if and only if, at the time of creating the contract, it was very difficult to estimate actual damages and the liquidated amount is reasonable.
MATERIAL BREACH
A material breach is the only kind that will discharge a contract; a trivial breach will not.
Additional work
A party agrees to do something above and beyond what he is obligated to do
EXECUTORS
A promise made by an executor of an estate to pay for the estate's debts.
Marriage
A promise made in consideration of marriage.
A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used car dealer's advertising. The contract was most likely written by
A+ Modeling Agency's lawyer
Which of the following are circumstances under which a court might award restitution damages? a. When a contract is terminated by impossibility b. When the plaintiff has committed fraud c. In cases of quasi-contract d. When a contract is breached e. When an injured party to a voidable contract rescinds the agreement f. When a contract is discharged g. When the plaintiff has not yet had the opportunity to confer a benefit on the defendant h. When a contract is void
A,C,D,E,F
Kerry finds a big green ring in the street. She shows it to Leroy, who says, "Wow. That could be valuable." Neither Kerry nor Leroy knows what the ring is made of or whether it is valuable. Kerry sells the ring to Leroy for $100, saying, "Don't come griping if it turns out to be worth two dollars." Leroy takes the ring to a jeweler who tells him it is an unusually perfect emerald, worth at least $75,000. Kerry sues to rescind.
A. Kerry will win based on fraud. B. Kerry will win based on mutual mistake. C. Kerry will win based on unilateral mistake. D. Kerry will lose. (Answer)
when the agreement is not socially responsible
Courts will not enforce a sales agreement ___
Angela makes a material misstatement of fact to Lance, which he relies on when he signs Angela's contract. Fraud exists if Angela made the misstatement _____.
A. intentionally B. recklessly C. carelessly D. a and b only E. a, b, and c
Scarborough's Department Store opens for business on a busy shopping day just before Christmas. A hurried clerk places a sign in the middle of a table piled high with red cashmere sweaters. The sign reads, "SALE—100% Cashmere—$0.99 Each." The sign, of course, was supposed to read "$99 each." This is a _____ mistake, and customers ______ be able to demand that Scarborough's sell the sweaters for 99 cents.
A. unilateral; will B. unilateral; will not (Answer) C. mutual; will D. mutual; will not
Jerry is so mentally ill that he is unable to understand the nature and consequences of his transactions, but he has not been adjudicated insane. Penny has been adjudicated insane, and has a court-appointed a guardian. Jerry's contracts are_______ , and Penny's contracts are______ .
A. valid; valid B. valid; voidable C. valid; void D. voidable; voidable E. voidable; void (Answer)
Master Mfg., Inc. contracted with Accur Computer Repair Corp. to maintain Master's computer system. Master's manufacturing process depends on its computer system operating properly at all times. A liquidated damages clause in the contract provided that Accur would pay $1,000 to Master for each day that Accur was late responding to a service request. On January 12, Accur was notified that Master's computer system had failed. Accur did not respond to Master's service request until January 15. If Master sues Accur under the liquidated damage provision of the contract, Master will: A.Win, unless the liquidated damages provision is determined to be a penalty B.Win, because under all circumstances liquidated damage provisions are enforceable C.Lose, because Accur's breach was not material D.Lose, because liquidated damage provisions violate public policy
A.Win, unless the liquidated damages provision is determined to be a penalty
In December 2012, Eric hires a band to play at a huge graduation party he is planning to hold in May, 2014. The deal is never put into writing. In January 2014, if he wanted to cancel the job, Eric be able to do so. If he does not cancel, and if the band shows up and plays at the party in May 2014, Eric have to pay them. A.will; will B.will; will not C.will not; will D.will not; will not
A.will; will
Deborah, a lawyer for a minor-league hockey team, is negotiating a contract between the team and its new practice stadium. The contract, now in its fourth draft, addresses all of Deborah's concerns and incorporates all of the changes she wanted. She is ready to sign the agreement, but she wants to be sure that any future conversations she has with the stadium lawyers are not considered additional provisions to the contract. What should Deborah do?
Add an integration clause to the contract.
c. an unenforceable agreement.
An agreement in which parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it is called a. a voidable contract. b. a quasi-contract. c. an unenforceable agreement. d. a void agreement.
ONE YEAR
An agreement that cannot be performed within one year.
Requirement contract
An agreement under which a buyer purchases 100% of goods from a single seller, and the seller provides for buyer's reasonable needs.
INTEREST
An interest is a legal right in something, such as a contract. The first step that a court takes in choosing a remedy is to decide what interest it is protecting.
Option contract
An interested purchaser buys the right to have the offer held open for a certain period of time
Terminated offer
An offer that can never be accepted
Malay, the CEO of Santi, Inc., interviews four lawyers to help with a potentially lucrative business deal. He provides each candidate the bare facts of the deal so they can discuss it and present their approaches. Which of the four should he hire?
Anthony, who tells Malay about the risks of that sort of deal and ways to accomplish Santi's goals safely and legally.
case #1
At her favorite restaurant, Sami orders and enjoys the lobster special, which was listed at $30 on the menu. When the bill arrives, Sami tries to execute a clever ploy she learned about in her business law class: She writes a check to the restaurant for $20 and writes "full settlement" across the top. The waiter accepts the check without looking at it, and the restaurant manager later deposits it in the restaurant's bank account. Is this a liquidated or an unliquidated debt? Is Sami off the hook for the last $10?
In Bi-Economy Market, Inc. v. Harleysville Ins. Co. of New York, the defendant argued that: a. Insurance companies are never liable for termination of business claims. b. If the parties had contemplated this sort of claim, they would have negotiated the terms at the time of contract. c. Bi-Economy's closing was not a result of the fire. d. The plaintiff was acting in bad faith.
B
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? a. Griffiths wins because there is an enforceable written contract with Hippen. b. 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. c. Hippen wins because Griffiths orally promised to buy back the house, and Hippen partially or fully performed. d. Griffiths wins because there was a subsequent oral modification of the contract which was not in writing.
B
Which of the following is the most common remedy that the law provides for a party injured by a breach of contract? a. Restitution interest b. Expectation interest c. Reliance interest d. Punitive damages e. Equitable damages
B
A manufacturer delivers a new tractor to Farmer Ted on the first day of the harvest season. But, the tractor will not start. It takes two weeks for the right parts to be delivered and installed. The repair bill comes to $1,000. During the two weeks, some acres of Farmer Ted's crops die. He argues in court that his lost profit on those acres is $60,000. If a jury awards $1,000 for tractor repairs, it will be in the form of damages. If it awards $60,000 for the lost crops, it will be in the form of damages. A.direct; direct B.direct; consequential C.consequential; direct D.consequential; consequential E.direct; incidental
B.direct; consequential
The common-law Statute of Frauds requires that to be "in writing," an agreement must be signed by: A.the plaintiff B.the defendant C.both a and b D.none of the above
B.the defendant
What is the best argument against enforcing this agreement?
Barrows is mentally incompetent
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
On Monday, Billy receives an offer from Andrew to buy Billy's house for $500,000. On Tuesday Billy mails Andrew a reply, "I'll sell it to you for $600,000 and not a penny less." On Wednesday, Billy reconsiders so he mails Andrew the following note: "I accept your offer for $500,000, the house is yours." On Thursday, Andrew receives Billy's first note. On Friday, Andrew receives Billy's second note. What result?
Billy and Andrew have a contract for $500,000.
case #2
Brockwell left his boat to be repaired at Lake Gaston Sales (LGS). The boat contained electronic equipment and other personal items. Brockwell signed a form stating that Lake Gaston had no responsibility for any loss to any property in or on the boat. Brockwell's electronic equipment was stolen and other personal items were damaged, and he sued. Is the exculpatory clause enforceable?
All Seasons, Inc. ordered $5,000 worth of Christmas decorations from Santa, Inc. The shipment of decorations was to arrive no later than October 1, but did not arrive until December 1. All Seasons was able to purchase some of the unfulfilled order through other suppliers, but had to pay 15% more than the price under contract with Santa, Inc. As a result of the delay, All Seasons' sales were down 25%. All Seasons can recover a. compensatory damages, consequential damages, and punitive damages. b. nominal damages. c. compensatory damages and consequential damages. d. punitive damages.
C
Desmond has been a fan of Crispin's paintings for years and is thrilled when the artist promises to give him painting lessons. The two agree that Crispin will provide Desmond with five weekly lessons for $1,000 each, payable once the lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. What result? a. Crispin's estate will be able to recover the full contract price of $5,000. b. Crispin's estate will be able to recover $2,000 under the doctrine of promissory estoppel. c. Crispin's estate will be able to recover $2,000 in restitution. d. Crispin's estate will get nothing because the contract is discharged by his death.
C
Generally, reasonable liquidated damage clauses will be enforced a. only in real estate sales contracts. b. when actual damages are easily determined. c. when actual damages are difficult to determine. d. almost always.
C
In a promissory estoppel case, a court will generally award a. both reliance and punitive damages. b. specific performance. c. only reliance damages. d. only nominal damages.
C
Two individuals signed a contract that was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence offered to: A.Explain the meaning of an ambiguity in the written contract. B.Establish that fraud had been committed in the formation of the contract. C.Prove the existence of a contemporaneous oral agreement modifying the contract. D.Prove the existence of a subsequent oral agreement modifying the contract.
C. Prove the existence of a contemporaneous oral agreement modifying the contract.
executory bilateral agreement
Coworkers Mindy and Jerome agree that Mindy will drive them to work every weekday for one month, and then Jerome will drive them both to work every weekday the following month. This arrangement is a(n) ___.
Under the Uniform Commercial Code, a seller generally entitled to recover consequential damages, and a buyer generally entitled to recover consequential damages. A.is; is B.is; is not C.is not; is D.is not; is not
C.is not; is
case #2
Central Maine Power Co. made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing heated with electricity. Motel Services, Inc., which was building a small housing project for the city of Waterville, Maine, decided to install electrical heat in the units in order to qualify for the offer. It built the units and requested payment for the full amount of the promotional offer. Is Central Maine obligated to pay? Why or why not?
COMMERCIAL IMPRACTICABILITY
Commercial impracticability means that some unexpected event has made it extraordinarily difficult and unfair for one party to perform its obligations.
Compensation awarded for harm that flowed directly from the breach of contract.
Compensatory Damages
In Taylor v. Kjaer, the appellate court held that the contract created --
Concurrent conditions
Represents the harm caused by the injured party's unique situation.
Consequential Damages
In Hadley v. Baxendale, the court held that the injured party may recover -- only if the breaching party --
Consequential damages Should have foreseen them when the two sides formed the contract.
Under the UCC, the buyer of goods is entitled to --, provided that --
Consequential damages The seller could reasonably have foreseen them.
__________ is the inducement, price, or ___________ that causes a person to enter into ________ and forms the basis for the parties' exchange. If one side gets all the _________ of the exchange, then the agreement is not a(n) _________ contract.
Consideration promise contract benefit enforceable
Desmond has been a fan of Crispin's paintings for years and is thrilled when the artist promises to give him painting lessons. The two agree that Crispin will provide Desmond with five weekly lessons for $1,000 each, payable once the lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. What result?
Crispin's estate will be able to recover $2,000 in restitution.
Bob, a house builder, contracts with Ollie to build a house on Ollie's lot. The total price of the construction is $100,000, $20,000 of which will be Bob's profit. After Bob has put $10,000 worth of materials into the house, Ollie wrongfully refuses to let him finish the house. If Bob sues for damages, he will be able to collect a. $100,000. b. $20,000. c. $10,000. d. $30,000.
D
Dana hires Paris to paint a portrait of her poodle, "Mack." The painting is to be done to Dana's personal satisfaction. Upon completion of the painting, which of the following will be true?
Dana may refuse to accept the painting if she really does not like it
Laissez-faire freedom of contract ignoring enforcing
Davis v. Mason was typical of disputes at that time. The court took a ____approach, declaring that parties had ____and would have to live with the consequences. The law had gone from ____ most promises to ____ nearly all.
Dewayne hires Eva to be the nanny to her two year old daughter Sofia. They agree she will work full time for the family for two years. Unfortunately, two months into the agreement, Eva dies. Eva's estate sues Dewayne for the remainder of her salary. What result?
Dewayne will be discharged for impossibility
T/F Expectation interest can best be described as money spent in reliance upon the agreement.
False
Which of the following are situations in which the court will probably admit parol evidence?
Duress Misrepresentation Fraud
Ambrose hires Bierce for $25,000 to supervise the production of Ambrose's crop, but then breaks the contract by firing Bierce at the beginning of the season. A nearby grower offers Bierce $23,000 for the same growing season, but Bierce refuses to take such a pay cut. He stays home and sues Ambrose. How much money, if any, will Bierce recover from Ambrose, and why?
Even if he had mitigated, Bierce would have lost $2,000. He is entitled to that sum. However, he cannot recover the remaining $23,000. After Ambrose breached, Bierce had identical work available to him, but he failed to take it. His failure to mitigate is fatal.
at least one part of the UCC
Every state has adopted
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
To win -- damages, the injured party must prove the breach of contract caused damages that can be quantified with reasonable certainty. -- damages concern the time and money the injured party spent performing his part of the agreement, which is -- to establish.
Expectation Reliance Easier
A promise made in consideration of marriage is never enforceable.
False
Consideration is a requirement for contracts to be enforceable, unless the parties agree otherwise in writing.
False.
Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of
Farmer Fran
Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins?
Foley wins because he and Interactive had a bilateral, express employment contract that incorporated the seven steps
case #1
For 20 years, Art's Flower Shop relied almost exclusively on advertising in the yellow pages to bring business to its shop in a small West Virginia town. One year, the yellow pages printer accidentally did not print Art's ad, and Art's suffered an enormous drop in business. Art's sued for negligence and won a judgment of $50,000 from the jury, but the printing company appealed, claiming that under an exculpatory clause in the contract, the company could not be liable to Art's for more than the cost of the ad, about $910. Art's claimed that the exculpatory clause was unconscionable. Please rule.
case blueprint #1
Gail Norton began dating Russell Hoyt under the mistaken impression that he was single. She later learned that he was married, but he repeatedly assured her he was getting a divorce. Six years later, Hoyt convinced Norton to quit her job so that they could travel together. He promised that he would "take care of her for life." The couple lived lavishly all over the world. Hoyt rented Norton an apartment, bought her cars, and repeated his promises to divorce his wife and marry her. He did neither. After 23 years, Hoyt ended the relationship with Norton. On what theory could Norton sue Hoyt? Is she likely to win?
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.
Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit?
Gintzler will win because he gave consideration.
GOOD FAITH
Good faith performance is required in all contracts.
In Toscano v. Greene Music, the plaintiff's case would have been strengthened most if --
He had an employment contract with Fields through 2017.
CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split its assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities, and a bottom line of $35,235.67, with half due to each partner. Hylton questioned the accounting and asked to see the books. Meztista did not permit Hylton to see any records and refused to answer her phone calls. Instead, he gave her a check in the amount of $17,617.83, on which he wrote "Final payment/payment in full." Hylton cashed the check, but she wrote on it, "Under protest—cashing this check does not constitute my acceptance of this amount as payment in full." Hylton then filed suit, demanding additional monies. Meztista defended on the grounds that the parties had made an accord and satisfaction. What is the likely result?
Hylton's debt is discharged because there has been an accord and satisfaction.
Julie signs a contract to buy Nick's 2012 Mustang GT for $20,000. Later, Nick changes his mind and refuses to sell his car. Julie soon buys a similar 2012 Mustang GT for $21,500. She then sues Nick and wins $1,500. The $1,500 represents her . A.expectation interest B.reliance interest C.restitution interest D.none of the above
IDK
Loehmann's clothing stores, a nationwide chain with headquarters in New York, was the anchor tenant in the Lincoln View Plaza Shopping Center in Phoenix, Arizona, with a 20-year lease from the landlord, Foundation Development, beginning in 1978. Loehmann's was obligated to pay rent the first of every month and to pay common-area charges four times a year. The lease stated that if Loehmann's failed to pay on time, Foundation could send a notice of default, and that if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, 1987, Foundation sent to Loehmann's the common-area charges for the quarter ending January 31, 1987. The balance due was $3,500. Loehmann's believed the bill was in error and sent an inquiry on March 18, 1987. On April 10, 1987, Foundation insisted on payment of the full amount within 10 days. Foundation sent the letter to the Loehmann's store in Phoenix. On April 13, 1987, the Loehmann's store received the bill and, since it was not responsible for payments, forwarded it to the New York office. Because the company had moved offices in New York, a Loehmann's officer did not see the bill until April 20. Loehmann's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict; on April 29, the company received Loehmann's check. Please rule.
IDK
Third Party Interests
If Ella and Declan have a contract that falls apart, can Tyrone sue to enforce the agreement?
Performance and Discharge
If a party fully accomplishes what the contract requires, his duties are discharged. But what if his obligations are performed poorly, or not at all?
quasi contract promissory estoppel
If a plaintiff can show that he has been injured, but does not have a contract, he can sometimes still recover under certain theories. In ___ cases, the defendant received a benefit from the plaintiff. In ___ cases, the defendant made a promise that the plaintiff relied on.
what if the facts were different?
Imagine that Art's Flower Shop has blossomed into a large, sophisticated corporation, that advertises in the yellow pages and also spends thousands each year in its online advertising. Imagine also that the local government has required advertising services to buy a license, to raise money for the city.
sale of goods
In a mixed contract, UCC Article 2 governs only if the primary purpose is the ___.
what if the facts were different?
In the case, Tallas wrote his memo after Dementas had been providing services for 14 years. What if, in addition to the writing the memo above, Tallas wrote the following memo 14 years ago: Peter Dementas is my new friend and a very kind person. He has agreed to take me in his car to the grocery store, to the doctor, and on other personal and professional errands as needed for as long as I live in Salt Lake City. Because I do not want to take advantage of my new friend, I will pay Peter $5,000 for fair consideration of these services, which I will leave to him in my will. Over the years, Tallas and Dementas become dear friends and, although Dementas would have continued to provide the same services for no additional fee simply because he enjoyed spending time with Tallas, Tallas writes the memo included in the case above two months prior to his death. Tallas' estate refuses to pay Dementas any money.
B. Farms and small businesses were being replaced by corporations
In the early twentieth century, courts increasingly began to analyze the basic fairness of a contract. What change led to this shift in the common law? A. Businesses were becoming more competitive with each other. B. Farms and small businesses were being replaced by corporations. C. Contracting parties were becoming more deceptive. D. Public policy was changing.
it was in the baby's best interest
In the surrogacy suit between Mary Beth Whitehead and William and Elizabeth Stern, the court awarded the baby to the Sterns because ___
they were in writing and sealed
In the twelfth and thirteenth centuries, courts did not consider promises binding unless ___
Minor costs.
Incidental Damages
A(n) -- is a court order that requires someone to refrain from doing something.
Injunction
(ch 11) Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins?
Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps.
A legal right in something.
Interest
The town of Sanford, Maine, decided to auction off a plot of land owned by the town. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arlene mailed in a bid that turned out to be the highest of all the bids the town received. When the town refused to sell them the lot, they sued. Who will win?
It will depend on whether the auction was with or without a reserve, or minimum price.
case #2
Jack Tallas came to the United States from Greece in 1914. He lived in Salt Lake City for nearly 70 years, achieving great success in insurance and real estate. During the last 14 years of his life, his friend Peter Dementas helped him with numerous personal and business chores. Two months before his death, Tallas dictated a memorandum to Dementas, in Greek, stating: PETER K. DEMENTAS is my best friend I have in this country, and since he came to the United States, he treats me like a father and I think of him as my own son. He takes me in his car grocery shopping. He drives me to the doctor and also takes me every week to Bingham to pick up my mail, collect the rents, and manage my properties. For all the services Peter has given me all these years, I owe to him the amount of $50,000 (Fifty Thousand Dollars). I will shortly change my will to include him as my heir.
(ch 11) Chef Jacquie is scheduled to teach a cooking class to three students. The class tuition is $1,100 per student. In the class, each student cooks a French meal under Jacquie's expert supervision and receives a cookbook (worth $30) and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the class that she will be unable to attend and requests a refund. Jacquie denies the refund and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues that it should be covered by the common law. Who is right?
Jacquie, because the class is primarily a service.
Chef Jacquie is scheduled to teach a cooking class to three students. The class tuition is $1,100 per student. In the class, each student cooks a French meal under Jacquie's expert supervision and receives a cookbook (worth $30) and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the class that she will be unable to attend and requests a refund. Jacquie denies the refund and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues that it should be covered by the common law. Who is right?
Jacquie, because the class is primarily a service.
Mrs. Martin tells some neighborhood kids that she will pay $100 if any of them mows her lawn. Jake goes to a hardware store, purchases a lawnmower for $60, and then mows Mrs. Martin's lawn. Jake has entered into which types of contract?
Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store.
A. a voidable contract, one that Jack can void.
Jennifer has offered to sell her laptop computer for $500 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is A. a voidable contract, one that Jack can void. B. a void contract because of the UCC. C. a void agreement because of the fraud involved. D. a voidable contract, because it is unilateral.
b. an express, bilateral contract.
Jerry offers to shovel the snow from Ben's driveway for $35. Ben replies "OK." This is an example of a. an implied, bilateral contract. b. an express, bilateral contract. c. an express, unilateral contract. d. an implied, unilateral contract.
Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule.
Krug wins because of true impossibility
c. unilateral, implied contract.
Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a a. bilateral, express contract. b. bilateral, implied contract. c. unilateral, implied contract. d. unilateral, express contract.
Dodger bought an insurance contract from Liberty Farm Co. The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. Time is stated to be of the essence. Dodger sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later. Liberty Farm denied coverage for the claim. If Dodger sues, who wins?
Liberty Farm wins; there was failure of a condition subsequent
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.
b. Yes, because the primary purpose of this contract is the sale of goods.
Madison purchases several 50-pound bags of mulch at the local gardening store. An employee carries the bags of mulch to Madison's truck and loads them into the back for her. Will Article 2 of the UCC govern the contract in this situation? a. No, this is a mixed contract because Madison is paying for both goods and labor. b. Yes, because the primary purpose of this contract is the sale of goods. c. Yes, because Article 2 of the UCC governs all bilateral contracts. d. No, this is an express contract because both parties explicitly state their intentions.
b. executory, bilateral, express contract.
Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an a. executory, bilateral, implied-in-law contract. b. executory, bilateral, express contract. c. executed, unilateral, express contract. d. executed, bilateral, express contract.
Marley breached her contract with Jose, but she is convinced that he could have reduced the extent of his injury if he had -- his damages. If Marley proves her theory at trial, Jose --.
Mitigated Will be unable to recover for the harm he could have avoided.
Lisa makes hand-crafted beads. Lisa approaches Julia, a successful jewelry maker, and offers to sell her beads exclusively to Julia if Julia agrees to buy all of the beads that Lisa makes. Julia agrees to buy all of the beads Lisa produces each month if, after inspecting them, Julia thinks they will sell well. Do Lisa and Julia have an enforceable contract?
No, Julia has made an illusory promise.
While staying overnight at Lily's house, Martin indicates that he would like to buy her car. Lily says she'll think it over. The next day Martin finds a note on the kitchen counter from Lily that reads, "I might be able to sell the car for about $22,000." Martin writes her a check for $22,000, takes the car keys off the hook by the front door and drives off in the car. Have Lily and Martin formed a binding contract?
No, Lily's note was an invitation to bargain, not an offer.
Did the Silvas have a duty to investigate what the McAllisters told them about the I-beam?
No, a buyer has no duty to investigate what he is told by the seller
Rosa and Happy Movers sign a contract that states Rosa will pay Happy Movers $100 per hour to move all of her furniture to her new house on September 1. The contract also states that any modifications to the agreement must be "made in writing signed by the party to be charged with the amendment." The day of the move, a Happy Movers representative shows Rosa a flyer for a promotion offering to complete a move in under two hours for an extra $300, and Rosa agrees orally to the deal. The Happy Movers representative signs his name on the flyer, and staples the flyer to the contract. If Happy Movers finishes moving Rosa's furniture in less than two hours, is Rosa contractually required to pay the extra $300?
No, because Rosa did not sign the flyer.
If the Silvas bought the house planning to tear it down and build a new one, will they be allowed to rescind the contract because of the McAllister's misstatements regarding the issues with the rain?
No, because the Silvas did not rely on what the McAllisters said
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
Does the McAllisters' original statement to the Silvas constitute fraud?
No, it was an innocent misrepresentation
Jackie offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract been formed? At what price?
No. Mel made a counter-offer, which Jackie rejected.
Jackie offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract been formed? At what price?
No. Mel made a counteroffer, which Jackie rejected.
Louise Latour, a successful interior designer, won a contract to design the interiors of Greentree Broadcasting's corporate headquarters. A few weeks after signing the agreement, Greentree receives a much cheaper bid from another designer and decides to get out of the contract. A Greentree lawyer notices that the top of the contract contains an embarrassing typographical error: It states that the agreement is between "Louise Latour and Grantree Broadcasting." Will Greentree be able to use this mistake to get out of the contract?
No. There is clear and convincing evidence that the mistake does not reflect the intent of the parties, and the court will reform the contract.
NOMINAL DAMAGES
Nominal damages are a token sum, such as one dollar, given to an injured plaintiff who cannot prove damages.
Requirements contract
Obligates the buyer to obtain all of his needed goods from the seller
Output contract
Obligates the seller to sell all of his output to the buyer, who agrees to accept it
Firm offer
Offer, signed in writing by a merchant, that promises to remain open for a period up to three months; offeree need not pay for the option to remain open
b. a change in relative bargaining power between parties to contracts.
One of the factors leading courts away from a laissez-faire approach to contract law was a. the movement away from requiring written contracts with a seal affixed. b. a change in relative bargaining power between parties to contracts. c. the assumption that parties had freedom to contract and would have to live with the consequences. d. the assumption that promises are not legally significant.
Certain particular types of contracts and rules of consideration are governed by the UCC. Which of the following are items that are governed by the UCC?
Output contracts Requirement contracts Modification of sale of goods contract
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
d. Patty may win under the doctrine of promissory estoppel.
Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result? a. Fred would win, as family members cannot sue each other for breach of an oral promise. b. Patty would win, as a contract was formed when Fred promised to pay her the support. c. Fred would win, as he did not ask Patty to quit her job. d. Patty may win under the doctrine of promissory estoppel.
Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result?
Patty may win under the doctrine of promissory estoppel.
A(n) -- is issued when it appears that the plaintiff has been injured and is entitled to relief after trial.
Permanent injunction
Polyquan, Inc. emails a dozen companies, offering to sell them 100 sweatshirts in either blue, red, orange, black, or green. The sweatshirts are $6 each. Shirts-A-Lot Clothing emails back, "We accept your offer of 100 sweatshirts for $6 each. No orange sweatshirts." Bespoke Tourism emails back, "We accept your offer of 100 sweatshirts for $6 each on the condition that you do not include any orange sweatshirts." Does Polyquan have a contract with either company?
Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism.
A(n) -- is issued early in a lawsuit to prohibit a party from doing something during the course of the lawsuit.
Preliminary injunction
In -- cases, a court will generally award -- damages, but courts are reluctant to impose -- damages in cases where there is no contract.
Promissory estoppel Reliance Expectation
but these types of claims rarely succeed in court
Promissory estoppel allows a party to recover without a contract in certain circumstances, ___
Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result?
Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof
REFORMATION
Reformation is the process by which a court will—occasionally—rewrite a contract to ensure that it accurately reflects the parties' agreement and/or to maintain the contract's viability.
Gap-filler provisions
Rules for supplying missing contract terms
Remedies
Relief a court will award to a party injured by a breach of contract.
The method a court uses to compensate an injured party.
Remedy
b. This contract was a voidable contract, Robert can disaffirm.
Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo. a. This contract was unenforceable because it needed to be in writing to be enforceable. b. This contract was a voidable contract, Robert can disaffirm. c. This contract was a valid contract, Robert cannot disaffirm. d. This contract was a void contract.
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.
THE STATUTE OF FRAUDS
Several types of contract are enforceable only if written:LAND ONE YEAR
BREACH
Someone breaches a contract when he fails to perform a duty without a valid excuse.
SUBSTANTIAL PERFORMANCE
Strict performance, which requires one party to fulfill its duties perfectly, is unusual. In construction and service contracts, substantial performance is generally sufficient to entitle the promisor to the contract price, minus the cost of defects in the work.
what if the facts were different?
Suppose instead that the menu read "Lobster: market price" and, after Sami eats the delicious lobster, she is presented with a bill stating the lobster is $95. Outraged, Sami writes the restaurant a check for $30 and writes "full settlement" across the top and includes a brief letter that reads, "I work for the local Fishing and Game Authority. The market price of this lobster is not more than $30, your bill is outrageous and I have no idea where you got that figure. My $30 check is payment in full to settle my dinner bill."
TRUE
T/F A contract is a promise that the law will enforce.
FALSE
T/F A party in a voidable contract may retain the benefits of the agreement while repudiating its obligations.
Jonah is 12 years old and absolutely loves soccer trading cards. At the local hobby shop, he finds a "Lionel Messi" trading card in the case, which has a handwritten tag by it that reads "9/00-." The employee at the front desk interprets this to mean $9.00 and sells Jonah the card for that amount. A few days later, Ronaldo, the card shop owner calls Jonah and asks for the card back because it is worth around $900. Jonah refuses, and Ronaldo sues. Which of the following is Jonah's strongest argument?
That neither Ronaldo nor Jonah knew the real value of the card.
What must the Silvas show to prove that they justifiably relied on what the McAllisters told them?
That they did in fact rely on what the McAllisters told them and that their reliance was reasonable
In Taylor v. Kjaer the court based its decision on --
The Restatement
Stanley's Shoelaces sends its brochure to a dozen local shoe stores. The brochure lists all of its products and lists prices. Based on this information, the Shoe Dump orders 500 pairs of laces. ____________has/have made an offer(s).
The Shoe Dump
To form a meeting of the minds ________________.
one party must make an offer and the other must make an acceptance
facilitate the easy formation and enforcement of contracts
The UCC was drafted in order to ___ .
acceptance
one party receives an offer, he must respond to it in a certain way
Raymond Barrows owned a 17-acre parcel of undeveloped land in Seaford, Delaware. For most of his life, Mr. Barrows had been an astute and successful businessman, but by the time he was 85 years old, he had been diagnosed as "very senile and confused 90 percent of the time." Glenn Bowen offered to buy the land. Barrows had no idea of its value, so Bowen had it appraised by a friend, who said it was worth $50,000. Bowen drew up a contract, which Barrows signed. In the contract, Barrows agreed to sell the land for $45,000, of which Bowen would pay $100 at the time of closing; the remaining $44,900 was due whenever Bowen developed the land and sold it. There was no time limit on Bowen's right to develop the land nor any interest due on the second payment. Comment.
The contract is voidable by Barrows's family. Barrows suffered from a mental impairment, senility. The contract is completely one-sided, with almost no money as a down payment and no interest. This reinforces the impression that Barrows was impaired. The family was permitted to rescind. Barrows v. Bowen, 1994 Del. Ch. LEXIS 63 (Del. Ch. 1994).
(ch 11) While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What result?
The court will apply common law and Mary will lose.
(ch 11) For the past seven years, Sommerset Storage, Inc. has hired Mountbattan Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbattan then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses and Mountbatten sues. What result?
The court will uphold the original contract and Mountbatten will lose
MITIGATION
The duty to mitigate means that a party injured by a breach of contract may not recover for damages that he could have avoided with reasonable efforts.
Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, what is the probable result?
The law would not enforce Jane's promise, as it does not have a lawful purpose
Mariposa Middle School is in need of more sports equipment, so a school administrator contacts Kiko's Sporting Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its order. Kiko tells the administrator she can order whenever she is ready and still enjoy the discount. Kiko faxes the administrator a handwritten note that reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15% discount off the final sales price of their purchase. Offer good for one use only. Offer open for the next 5 months. Signed, Kiko" The administrator tries to use the discount four months later but Kiko says she has revoked the offer. What result?
The offer will not be enforced because the offer is open too long.
Mariposa Middle School is in need of more sports equipment, so a school administrator contacts Kiko's Sporting Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its order. Kiko tells the administrator she can order whenever she is ready and still enjoy the discount. Kiko faxes the administrator a handwritten note that reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15% discount off the final sales price of their purchase. Offer good for one use only. Offer open for the next 5 months. Signed, Kiko" The administrator tries to use the discount four months later but Kiko says she has revoked the offer. what result?
The offer will not be enforced because the offer is open too long.
Unliquidated debt
The parties dispute whether any money is owed or how much is owed.
Liquidated debt
The parties do not dispute the amount owed.
RELIANCE
The reliance interest puts the injured party in the position he would have been in had the parties never entered into a contract. It focuses on the time and money that the injured party spent performing his part of the agreement. If there was no valid contract, a court might still award reliance damages under a theory of promissory estoppel.
RESTITUTION
The restitution interest returns to the injured party a benefit that she has conferred on the other party which would be unjust to leave with that person. Restitution can be awarded in the case of a contract created, for example, by fraud, or in a case of quasi-contract, where the parties never created a binding agreement.
Land
The sale of any interest in land.
GOODS
The sale of goods of $500 or more.
Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up their father, Luther, at his house where he is singing a goodbye song to each of his 20 plants, and eating pancakes out of his coat pocket. Next, they drive to an assisted living facility, to collect their mother, Augusta, who has lived there since a judge declared her mentally incompetent a few years ago. When they arrive at their hotel, Luther writes postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom and her parents each a souvenir snow globe for $1,000. The snow globes are for sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their money back?
The sale to Augusta is void; the sales to Luther and Tom may be voidable.
What is a major difference between the UCC and common law's approach to contract remedies?
The seller of goods is not entitled to consequential damages under the UCC.
CONTENTS
The writing must be signed by the defendant and must state the name of all parties, the subject matter of the agreement, and all essential terms and promises. Electronic signatures usually are valid.
What are the remedies available to the Silvas if the McAllisters made fraudulent statements to them about the house?
They will generally have the choice of rescinding the contract or suing for damages or in some cases, both
Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo
This contract was a voidable contract, Robert can disaffirm.
a. Belinda did not accept Tim's offer; she is still negotiating.
Tim sent an email to Belinda offering to sell his car to her for $5,000. Belinda texted Tim back offering to pay $4,000 for the car. A valid contract did not exist because a. Belinda did not accept Tim's offer; she is still negotiating. b. Belinda should have accepted Tim's offer orally. c. the contract was not for a lawful purpose. d. consideration was not present in the negotiations.
TIME OF THE ESSENCE
Time of the essence clauses result in strict enforcement of contract deadlines.
in an employment setting
Today, the most hotly contested disputes about implied contracts arise ___
A contract for the sale of goods for $750 is unenforceable if it is not in writing.
True
A contract needs more than an offer and acceptance.
True
If a court determines that a contract is incomplete, it will admit parol evidence.
True
True or false: The court may consider the terms of the agreement itself and consider whether it is so unjust that only a mentally incompetent person would agree to be bound by its terms.
True
Under the UCC, two parties can make a contract for the sale of goods and omit the price and the contract will still be upheld.
True
One provision in a contract states "Ulysses vows he is a board certified physician" and another states "Emma promises not to eat red meat for six months from the date of this agreement." Which of the following best describes these contract terms?
Ulysses has made a warranty and representation; Emma has made a covenant
One provision in a contract states "Ulysses vows he is a board-certified physician" and another states "Emma promises not to eat red meat for six months from the date of this agreement." Which of the following best describes these contract terms?
Ulysses has made a warranty and representation; Emma has made a covenant
One provision in a contract states "Ulysses vows he is a board-certified physician" and another states "Emma promises not to eat red meat for six months from the date of this agreement." Which of the following best describes these contract terms?
Ulysses has made a warranty and representation; Emma has made a covenant.
Which of the following are the two basic elements of consideration?
Value Bargained-for exchange
It is always easy to tell if a party to a contract has acted in good faith.
false
Different types of promises can serve as consideration in the formation of a contract. Which of the following are types of circumstances that can serve as the basis for consideration?
Unforeseen circumstances Additional work
D. consideration
What element of a contract refers to both parties receiving some measurable benefit? A. capacity B. legality C. consent D. consideration
a. a quasi-contract
What type of contract is a possible remedy for an injured plaintiff in a case with no valid contract, when the plaintiff can show benefit to the defendant, reasonable expectation of payment, and unjust enrichment? a. a quasi-contract b. an express contract c. a unilateral contract d. an implied contract
d. Myrtle would not have to pay for the yard work
When Myrtle comes home from work one evening, she finds that her yard has been mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work. Which of the following answers is most accurate? a. This is an express, voidable contract that either party may avoid. b. The court would order Myrtle to pay the reasonable value of the yard work because of the benefit conferred on her. c. This is an implied, unilateral contract and she must pay the price requested by the man. d. Myrtle would not have to pay for the yard work.
quasi-contracts quantum meruit judicial activism
When a court relies on the theory of ___ , the damages awarded to the plaintiff are called ___ , which means that the plaintiff gets "as much as he deserves." This is a form of ___.
PAROL EVIDENCE
When an integrated contract exists, neither party may generally use parol evidence to contradict, vary, or add to its terms. Parol evidence refers to anything (apart from the written contract itself) that was said, done, or written before the parties signed the agreement or as they signed it.
concern the sale of goods
When analyzing any contract problem, it is important to determine whether the UCC governs the dispute. It probably does if the contract ___
Revoked offer
When the offeror "takes it back" before the offeree accepts
b. a promise made by the plaintiff in response to the defendant's promise
Which of the following is NOT required to establish promissory estoppel? a. a promise made by the defendant b. a promise made by the plaintiff in response to the defendant's promise c. reliance on the defendant's promise d. All of these are required.
b. Alberto visits his physician to be treated for a sinus infection. They do not discuss payment, but the following week Alberto receives a bill from his physician for services rendered.
Which of the following is an example of an implied contract? a. Midori offers to sell a necklace to Patricia for $50; Patricia agrees to pay $50 for the necklace. b. Alberto visits his physician to be treated for a sinus infection. They do not discuss payment, but the following week Alberto receives a bill from his physician for services rendered. c. Amy tells her neighbor Tom, "If you rake up my leaves, I'll bake you a batch of brownies." Tom accepts the offer. d. Miguel wants to purchase his first home. When he found the perfect place, he signed a contract for purchase and closed on the home within a month.
The plaintiff gave some benefit to the defendant. The defendant knew the plaintiff reasonably expected to be paid for the benefit. The defendant would be unjustly enriched if he did not pay.
Which of the following must a plaintiff prove to win a quasi-contract claim?
b. "I will pay you $50 if you mow my lawn."
Which of the following represents a unilateral offer? a. "I will pay you $50 for your backpack." b. "I will pay you $50 if you mow my lawn." c. "I will pay you $50 if you promise to trim that tree." d. "I will pay you $50 for your CD player."
Implied contract Promissory estoppel Quasi-contract
Which of the following terms describe elements of common law?
c. a computer
Which of the following types of property would be considered "goods" under the Uniform Commercial Code? a. a stock b. a patent c. a computer d. a promissory note
sweatshirts 500 turtles bananas
Which of the following would be considered "goods" under UCC Article 2?
A. The law permits one party to terminate the agreement.
Which phrase below describes a voidable contract? A. The law permits one party to terminate the agreement. B. The parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it. C. Satisfies all of the law's requirements, and a court will enforce it D. Cannot be enforced by either party
writing
While verbal agreements are often contracts, some types of contracts must be in writing to be enforceable
Did the McAllisters make an intentional misrepresentation of fact by telling the Silvas the I-beam was for reinforcement?
Yes because they did not have a reasonable belief that they were telling the truth
(ch 11) Central Maine Power Co. (CMPC) made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc. (MSI) decided to install electrical heat in a housing project it was constructing in Waterville, Maine. MSI built the units and requested payment for the full amount of the promotional offer. Is CMPC obligated to pay? Why or why not?
Yes, CMPC is obligated to pay because this was a unilateral contract and MSI performed.
What does it mean if a party to a contract has been discharged?
it means that person is "finished" and has no more duties under the contract
Central Maine Power Co. (CMPC) made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc. (MSI) decided to install electrical heat in a housing project it was constructing in Waterville, Maine. MSI built the units and requested payment for the full amount of the promotional offer. Is CMPC obligated to pay? Why or why not?
Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed.
Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250? a. No, Paul was already required to paint the kitchen, so there was no consideration b. No, because the agreement was not signed in writing c. Yes, but only if the parties agreed prior to the start of work that additional hours would require additional pay d. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed
Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed
What is a force majeure event?
a disruptive, unexpected occurrence for which neither party is to blame that prevents one or both parties from complying with a contract
Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise?
Yes, because Ruben relied on the promise.
Did the McAllisters make a material misstatement when they told the Silvas that the I-beam was for reinforcement without mentioning the fact that the wall was buckling?
Yes, because a buckling wall is extremely important and my indicate that the house will require expensive repairs.
Woodson Walker and Associates leased computer equipment from Park Ryan Leasing. The lease said nothing about assignment. Park Ryan assigned the lease to TCB. When Walker failed to make several payments on the lease, TCB sued. Was the assignment valid if the original lease made no mention of assignment rights?
Yes, because the contract did not preclude the assignment.
Fritz's Pet Shop has a contract with PlanetLazy Pet Products that states: a) PlanetLazy will deliver to Fritz 25 pet beds on the second Saturday of every month for one year; b) Fritz will pay PlanetLazy $2,500 on the first day of each month for one year. If Fritz does not pay PlanetLazy on a given month, is PlanetLazy still obligated to continue delivering pet beds?
Yes, because the terms are reciprocal promises
Were the McAllisters obligated to tell the Silvas about the problems with the house?
Yes, if the issues were latent defects
force majeure
a disruptive, unexpected occurrence that prevents one or both parties from complying with the contract
Are the McAllisters obligated to tell the Silvas what they learned?
Yes, they have an oibligation to correct a previous misstatement
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.
Abby hires a contractor to make repairs on her house. Before the repairs are finished, Abby dies. Her good friend Clay is appointed executor of Abby's estate. Clay orally promised that if the estate could not pay the repair bill, he would pay it even though he does not live in the house and has no entitlement under Abby's estate. If the contractor's bill does not get paid, who can the contractor collect from, if anyone? a. The contractor can collect from the estate only. b. The contractor can collect from either the estate or Clay. c. The contractor must collect from the estate first, and then collect any deficiency from Clay. d. The contractor can collect from Clay only.
a
Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land. Since neither of them had any paper with them, Derek wrote the following on a napkin: "Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of $4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2011." Abyan signed the napkin. On May 1, 2011, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek sues Abyan for the price of the land, the most likely result will be a. Derek will win because the writing is sufficient under the Statute of Frauds. b. Derek will win because the Statute of Frauds does not apply to this situation. c. Abyan will win because the writing is not sufficient under the Statute of Frauds. d. Abyan will win because Derek did not sign the writing.
a
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? a. The writing needs to state the effective dates of the lease. b. The lease was for less than $500 per month. c. This lease was not required to be in writing. d. The court erred; the lease satisfies the Statute of Frauds.
a
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? a. Lorna cannot enforce the deal because her actions were not sufficient to be considered part performance. b. Lorna can enforce the deal because the agreement did not need to be in writing. c. Lorna cannot enforce the deal because her actions were not sufficient to be considered full performance. d. Lorna can enforce the deal because she moved into the house and made improvements to it.
a
The Roberts family just received news from Jo-Anne Roberts' employer that she was receiving a prestigious promotion to Corporate Vice President. The new position was in New York City, nearly 3,000 miles away from their home in Los Angeles, California. Because Jo-Anne needed to find a place to live in the city quickly, she agreed to purchase via phone a 2,000 sq. ft. apartment located a few blocks from her new office. Jo-Anne wired the owner a payment of $500,000 against the $3.7 million negotiated price of the apartment. Without waiting for further word from the owner, Jo-Anne and her husband Albert loaded their 3 children and 2 cats into their SUV and headed for the "Big Apple." Once arriving New York, the family moved into the apartment and redecorated the entire interior, at a cost of $350,000. After living in the apartment for two months, Jo-Anne wired another $500,000 payment to the owner, who called immediately after receiving the payment and said the deal was off. Can Jo-Anne keep the apartment? a. Yes, because Jo-Anne has completed part performance on the contract. b. No, because marketable title has not been conveyed by the owner. c. No, because all contracts for interests in land must be in writing. d. Yes, because Jo-Anne and the owner had an enforceable contract.
a
The main difference between the UCC requirement for a writing for a contract for the sale of goods and the common law rule is that the a. UCC does not require all the terms of the agreement to be in writing. b. common law requires only the signature of the defendant and the quantity of goods being sold. c. UCC requires the signature of only one party. d. common law requires only an indication that the parties reached an agreement.
a
Tuan is president and sole shareholder of Entertainment, Inc. Entertainment, Inc. wishes to borrow money, but to do so, the bank requires Tuan to orally agree to personally pay the debt of the corporation if Entertainment, Inc. cannot. Tuan's guarantee to repay is a. enforceable because of the leading object rule. b. enforceable under the parol evidence rule. c. unenforceable because there is no insurable interest. d. unenforceable because it is a collateral promise.
a
When one person agrees to pay the debt of another as a favor to that debtor, it is called a. a collateral promise. b. promissory estoppel. c. a mutual promise. d. promissory representation.
a
Which of the following oral contracts may be enforceable? a. Kenny orally agrees to purchase 5,000 pencils that the ABC Pencil Company stamps with the words "Kenny is the Greatest!" b. Mrs. Washington calls the corner grocery and places an order for a loaf of bread, a gallon of milk, and a pound of hamburger to be delivered to her. Ten minutes later, before the store has a chance to put together her items, she calls to cancel the order. c. All of these are correct. d. Nathan owes $1,000 in back rent to his landlord. Miranda tells Nathan not to worry about it, she'll pay his debt for him.
a
Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is a. enforceable, because Willis has partially performed the oral contract and made improvements on the land. b. unenforceable, because the parol evidence rule applies. c. unenforceable, because there is no writing signed by Leslie. d. enforceable, because the Statute of Frauds does not apply to this interest in land.
a
One of the factors leading courts away from a laissez-faire approach to contract law was
a change in relative bargaining power between parties to contracts.
Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to pay for the lamps upon delivery. This is an example of
a concurrent condition
Executory Contract
a contract that has been made, but one or more parties has not fulfilled their obligations
Which of the following is NOT required to establish promissory estoppel?
a promise made by the plaintiff in response to the defendant's promise
2. In the memo, Tallas provides ______ as consideration.
a promise to act
Which of the following promises are provided as consideration under the terms of the memo written 14 years ago?
a promise to pay an agreed upon amount & a promise to provide driving services for an indefinite period of time
Generally, an advertisement is ____________. If an advertisement includes _____________ it can be considered an offer.
a request for offers very specific terms
What type of contract is at issue in this case?
a unilateral agreement
Which of the following statements, if made by a seller who knows the statement to be untruthful, would NOT be misrepresentation of material fact resulting in a cause of action for fraud? a. "There is no better car in the world." b. "The tires have less than 5,000 miles on them." c. "This horse is only six years old." d. "This car gets 28 miles per gallon. "
a. "There is no better car in the world."
Amy, a baker, has found her dream home, but cannot afford the down payment. Amy's brother agrees to loan her $30,000 for the down payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her brother's wedding cake for his wedding next month instead of paying back the loan, so that she can buy new equipment for her bakery. Amy's brother agrees. How much money does Amy owe her brother?
a. $0 because an agreement to accept different performance in lieu of full payment of liquidated debt is binding.
As it applies to minors, which of the following is LEAST likely to be regarded as a necessary? a. Educational expenses b. Food c. Medical expenses d. Rent
a. Educational expenses
Which of the following are ways in which a minor can disaffirm a contract? a. Tell the other party in writing b. Tell the other party orally c. Refuse to perform his contractual obligations
a. Tell the other party in writing b. Tell the other party orally c. Refuse to perform his contractual obligations
A(n) _______ contract is illegal from the beginning and may not be enforced by either party; a(n) _______ contract is legal but permits one party to escape, if he or she so wishes. a. void; voidable b. voidable; void c. disaffirmed; affirmed d. affirmed; disaffirmed
a. void; voidable
Deborah, a lawyer for a minor league hockey team, is negotiating a contract between the team and its new practice stadium. The contract, now in its fourth draft, addresses all of Deborah's concerns and incorporates all of the changes she wanted. She is ready to sign the agreement, but she wants to be sure that any future conversations she has with the stadium lawyers are not considered additional provisions to the contract. What should Deborah do?
add an integration clause to the contract
Courts will enforce a contract for a pre-existing duty if the promisor agrees to provide __________.
additional work
Sometimes the parties discharge a contract by _________. For example, the parties may agree to ________ their contract, meaning that they terminate it by mutual agreement.
agreement rescind
Nate works as a carnival barker. His employment contract specifies that he can be fired if he "loses his voice." This is an example of
ambiguity
When a provision in a contract is unclear by accident, it is a case of
ambiguity
condition precedent
an event that a duty to perform simultaneously
condition subsequent
an event that must occur after a particular party arises
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
Ralph is a professional football player. He signs a valid contract with the Miami Dolphins. Later, he claims that he was also promised free use of the Dolphins' private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim?
an integration clause
E-signatures ____________________.
are valid in all 50 states
severability
asks a court to delete an enforceable clause, rather than void the whole contract
The more complex a contract, the more likely it is that _________.
at least one party will perform imperfectly
A statute of limitations begins to run _________ and will limit the time within which the injured party may file suit. Failure to file suit within the time limit ________.
at the time of the jury discharges the party who breached the contract
Connie orally offered Chris a job and stated that she would like Chris to work for her for two years. Based upon your reading in Browning, does this agreement have to be in writing to be enforceable? a. No. Employment agreements never have to be in writing to be enforceable. b. Yes. The contract terms are for two years and by definition this contact cannot be performed within one year. c. Yes. All agreements for employment must be in writing to be enforceable. d. No. Because Chris could die in one month and therefore a writing is not necessary because it was performed within one year.
b
Connie orally offered Chris a job and stated that she would like Chris to work for her. There was no mention of time at all. Based upon your reading in Browning, does this agreement have to be in writing to be enforceable? v=a. No. Employment agreements never have to be in writing to be enforceable. b. No. Chris could perform this contract in under one year therefore no writing is required under the statute of frauds. c. Yes. Since there are no contract terms for time, by definition this contract falls under the statute of frauds and must be in writing to be enforceable. d. Yes. The contract terms are indefinite and by definition this contract falls under the statute of frauds and must be in writing to be enforceable.
b
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? a. PP will lose because it assumed this risk when it decided to sell custom sweaters. b. PP will win if it cannot sell the sweaters elsewhere. c. PP will lose because it has written notice of Doreen's cancellation. d. PP will lose because it does not have a written order from Doreen.
b
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? a. Dante will lose because the contract is for an interest in land, so it should have been in writing. b. Dante will win under promissory estoppel. c. Dante will lose because the contract cannot be completed in under a year, so it should have been in writing. d. Dante will win because he has partly performed under the contract.
b
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 30 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? a. Norv will be able to enforce the deal because his actions are full performance of the deal. b. Norv cannot enforce the deal because it was not in writing. c. Norv can enforce the deal for the furniture but not for the house. d. Norv will be able to enforce the deal because his actions are partial performance of the deal.
b
Renita, a merchant, has received a signed, written confirmation from Merchants, Inc. referring to goods she had not ordered. Renita should a. call the seller and object to the confirmation as soon as she gets back from her two-week vacation. b. object to the confirmation in writing within 10 days. c. ignore the confirmation. d. return the goods within two weeks of their delivery with a note attached saying she will not pay for the goods.
b
The Uniform Electronic Transmission Act (UETA) a. declares that e-signatures are invalid. b. declares that a contract or signature may not be denied enforceability just because it is in electronic form. c. has only been adopted in a handful of states. d. creates a safe cyberspace environment in which business communications cannot be intercepted or fraudulently altered.
b
Under the merchants' exception rule of the UCC, within a reasonable time of making an oral contract, if a merchant sends a written confirmation to another, and if the confirmation is definite enough to bind the sender herself, then the merchant who receives the confirmation will also be bound by it unless he objects in writing within a. 3 days. b. 10 days. c. 30 days. d. 5 days.
b
Which of the following types of contracts cannot be either contradicted or supplemented by evidence of prior agreements or expressions? a. implied contracts b. integrated contracts c. incomplete contracts d. ambiguous contracts
b
Pamela is planning to sell her home decorating store to her daughter. Pamela has a. no duty to disclose hidden defects in the business. b. a greater duty to reveal problems in the business because her daughter assumes she will be honest. c. a lesser duty to reveal problems in the business because she has a relationship of trust with the buyer. d. a duty to report only any latent defects she knows about that her daughter should not be expected to discover herself.
b. a greater duty to reveal problems in the business because her daughter assumes she will be honest.
As reflected in the holding in Snider Bolt & Screw v. Quality Screw & Nut, the current majority view on non-compete agreements is that a. they are unconscionable. b. they are supported by consideration in the form of continued employment by the employer in exchange for the employee's promise not to compete. c. they are not supported by consideration because the employer has already hired the employee. d. they are only enforceable if accompanied by monetary compensation, even if only one dollar.
b. they are supported by consideration in the form of continued employment by the employer in exchange for the employee's promise not to compete.
what type of case is this?
bailment
Why do lawyers prefer to negotiate touchy subjects at the beginning of a relationship?
because everyone is eager to make a deal, and lawyers want to avoid unpleasant surprises later on
why would a court decline to uphold the marriage license
because hoyt did not have the capacity to consent
Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called
boilerplate
concurrent conditions
both parties have a duty to perform simultaneously
Which of the following is NOT one of the three ways to amend a written contract?
by verbally agreeing to the changes and shaking hands on the deal
A legal right that an owner gives to another person to make some use of the owner's land is called a. a mortgage. b. a deed. c. an easement. d. a lease.
c
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: a. Enforceable because personal service contracts are exempt from the Statute of Frauds. b. Unenforceable because it covers services with a value in excess of $500. c. Enforceable because the work could be completed within one year. d. Unenforceable because it covers a time period in excess of one year.
c
Christine agrees to marry Barry after he tells her he will buy her a brand-new Rolls Royce within a year of their marriage. After they are wed, Barry refuses to give her the car. What will happen if Christine sues Barry? a. She will win because of the "one-year rule." b. She will lose because Barry's promise of a car is a collateral promise, which must be in writing. c. She will lose because a promise made in consideration of marriage must be in writing. d. She will win because a spouse is legally required to keep the promises made to his/her partner.
c
Connie orally offered Chris a job and stated that she would like Chris to work for her for life. Based upon your reading in Browning, what is the best answer on whether this agreement has to be in writing to be enforceable? a. No. Contracts for life are similar to contract terms that are indefinite and by definition this contract does fall under the statute of frauds and needs to be in writing to be enforceable. b. Yes. Contracts for life are similar to contract terms that are indefinite and by definition this contract does fall under the statute of frauds. c. Yes. Contracts for life are similar to contract terms that are indefinite and by definition this contract does not fall under the statute of frauds. d. Yes. Contracts for life are similar to contract terms that cannot be performed within one year and therefore the statute of fraud applies and this agreement must be in writing to be enforceable.
c
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? a. Magnus must pay for 10,000 ReaderWranglers. b. Magnus is not bound by the agreement because it was never put in writing. c. Magnus must pay for 8,000 ReaderWranglers. d. Magnus is not bound by the agreement because Daquan brought 8,000 ReaderWranglers instead of 10,000.
c
Does the statement "The sale of goods will not be enforceable unless there is some writing, signed by the defendant, indicating that the parties reached an agreement" accurately reflect the UCC's basic rule? a. No. It should state that the contract must require all of the terms of the agreement to be in writing. b. No. It should also state that the contract must be signed by both parties, not just the defendant. c. No. It should state that the contract must be for the sale of goods of $500 or more. d. Yes. The wording accurately reflects the UCC's basic rule.
c
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? a. Hachiro is not bound by the memorandum because he did not intend to be bound by it. b. Hachiro is not bound by the memorandum because he never signed it. c. Hachiro is bound by the memorandum because he never objected to it in writing. d. Hachiro is not bound by memorandum agreement because he called and told Iggy the deal was off.
c
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? a. Mast Industries. b. Neither Mast Industries nor Bazak. c. Bazak. d. None of these answers is correct.
c
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? a. Gloria will be responsible for Terrance's debt because she told the landlord she would pay it, and the landlord relied on Gloria's promise. b. Gloria will not be responsible for the debt because the landlord did not pay Gloria any consideration for her promise to pay the rent. c. Gloria will not be responsible for Terrance's debt unless the landlord can prove that Gloria made the promise out of self-interest. d. Gloria will not be responsible for Terrance's debt because her collateral promise needed to be in writing.
c
Which of the following would suffice for a signature on a writing under the Statute of Frauds? a. a name keyed at the bottom of an e-mail b. a stamped signature c. Any of these would suffice. Judges define "signature" very broadly. d. a handwritten signature
c
On Friday, Billy mails Andrew an offer, which Andrew receives on Monday. On Tuesday, Billy mails Andrew a revocation, which Andrew does not receive until Thursday. Andrew takes no action when he receives the revocation. Meanwhile Andrew mailed Billy an acceptance on Wednesday that Billy receives on Friday. Is a contract formed, and if so, on what day? a) No contract is formed. b) A contract was formed when Andrew received the offer on Monday. c) A contract was formed when Andrew mailed his acceptance on Wednesday. d) A contract was formed when Billy received the acceptance on Friday. e) A contract was formed when Andrew mailed his acceptance on Wednesday, then terminated when Andrew received Billy's revocation on Thursday.
c) A contract was formed when Andrew mailed his acceptance on Wednesday
Guyan Machinery, a North Carolina manufacturing corporation, hired Albert Voorhees as a salesman and required him to sign a contract stating that if he left Guyan he would not work for a competing corporation anywhere within 250 miles of North Carolina for a two-year period. Later, Voorhees left Guyan and began working at Polydeck Corp., another North Carolina manufacturer. The only product Polydeck made was urethane screens, which comprised half of 1 percent of Guyan's business. Is Guyan entitled to enforce its noncompete clause?
c. No, because it is not essential to the employer.
Rick was in the process of buying 320 acres of land when Rick signed a contract to sell that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before Simon could complete the purchase of the land, Rick went bankrupt. Which of the following remedies should Simon seek from Rick?
c. Restitution
A promise in a contract is called a
covenant
Woodson Walker and Associates leased computer equipment from Park Ryan Leasing. The lease said nothing about assignment. Park Ryan assigned the lease to TCB. When Walker failed to make several payments on the lease, TCB sued. Was the assignment valid if the original lease made no mention of assignment rights?
c. Yes, because the contract did not preclude the assignment.
Mary pledges $30,000 to a school for the blind. In reliance on Mary's promise, the school hires an architect to build a cafeteria. Two months later Mary takes back her promise. The school sues, and the judge will likely rule that __________________.
c. the school will be able to enforce the promise with "moral consideration"
In Donovan v. RRL Corporation the court held that the terms of luxury car dealer's newspaper ad a. would be upheld because the error was a result of the dealer's negligence. b. would be upheld because the newspaper - not the dealer - was responsible for the error in the ad. c. would not be upheld because the dealer did not know about the mistake, and because the dealer did not try to mislead the plaintiff. d. would not be upheld because the dealer made reasonable attempts to correct the ad.
c. would not be upheld because the dealer did not know about the mistake, and because the dealer did not try to mislead the plaintiff.
Contracts made under the UCC ____________; offers under the common law ___________.
can be indefinite must be definite
What is gross negligence?
carelessness far greater than ordinary negligence
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
Under what type of law will this case be decided?
common law
the contract will be governed by
common law
Sam enters into a contract agreement to buy Betty Lou's house on the condition that he is able to secure financing at or below 6% per year. This is a
condition precedent
Melody is a recent graduate of State Law School. She lands an impressive employment contract with the firm of Dewey, Cheathem, and Howe, Attorneys at Law, on the stated provision that she pass the upcoming bar exam. This provision in the employment agreement is a(n)
condition subsequent
The courts will find an implied contract when
conduct of the parties indicates they intended an agreement.
In contract law, boilerplate
creates a private law that governs disputes between the parties
Alfred orally promised to pay Robert a salary of $30,000 per year for five years and his moving expenses up to $10,000 if Robert would quit his job and come to work for him at his manufacturing plant. Robert agreed to do so, but requested a written contract. Alfred assured him that the company attorney would prepare such a contract as soon as possible, but Alfred needed Robert to start at once. Accordingly, Robert sold his house, moved his family, and commenced to work for Alfred. He was fired without cause two months later. No written contract was ever executed. Can Robert enforce Alfred's oral promise? a. No. This was a contract for longer than one year and is not applicable to exception. It violates the Statute of Frauds and is not enforceable. b. Yes. This is a partial performance of the sale of goods. Robert can recoup the loss he took on the sale of his house. c. Yes. This is a personal satisfaction contract, and Alfred gave no reason for dissatisfaction. Robert can recoup the loss he took on the sale of his house. d. Maybe. Robert should go to court under the theory of promissory estoppel. Alfred made an oral promise that Robert relied upon, and the way to avoid injustice is to enforce the promise.
d
Contracts that cannot be performed within __________ are unenforceable unless they are in writing. a. six months b. one month c. two years d. one year
d
Ethel's Exercise World plans to order three weight machines from Pete's Push, Pedal, and Pull, Inc. for a total of $15,000. Pete's demands that Ethel's friend, Moneybags, a wealthy independent businesswoman (not connected with Ethel's business in any way) promise to pay Pete's for the three machines if Ethel's Exercise World does not. Which of the promises in this problem must be in writing to be enforceable? a. The promise made by Ethel's Exercise World to buy the weight machines. b. Moneybag's promise to pay if Ethel's Exercise World doesn't. c. None of the promises in this problem need to be in writing. d. Both Moneybag's promise and Ethel's Exercise World's promise.
d
Many states will not accept an e-signature on a. a will. b. a foreclosure notice. c. a court order. d. All of these are correct.
d
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? a. No, because it is too short. b. Yes, because both parties clearly intend to be bound by the agreement. c. Yes, because both parties signed it. d. No, because it is too vague.
d
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? a. Yes. Parties are always allowed to provide evidence if it adds to the court's understanding of the agreement. b. No. The contract is fully integrated so no additional evidence will be permitted at trial. c. Yes. This contract was not required to be in writing, so the court will allow additional evidence at trial. d. Yes. The court will admit evidence that Dimitri signed under duress.
d
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. a. Sabrina owes Alexander nothing because their marriage lasted less than a year. b. Sabrina owes Alexander 50 percent of her company because he fully performed his contractual obligations. c. Sabrina owes Alexander 50 percent of the company because she made the promise out of self-interest. d. Sabrina owes Alexander nothing because the agreement was not in writing.
d
The Uptown Mall has hired Bryce to be the mall's Santa Clause for the upcoming season. Bryce and the mall manager discussed on September 6, 2016 the terms for his employment as "Jolly Ole' St. Nick" for the December holiday seasons of 2017 and 2018. After orally agreeing to perform both holidays, Bryce realized he had a conflict for 2017, so informed the manager on September 10, 2016 that he could only be available for the 2018 season. The manager told Bryce "no problem" and found another Santa for 2017. After performing for the mall as Santa Claus in 2018, the mall refuses to pay Bryce for his services. If Bryce files a claim against the mall for the wages he earned, what is the likely outcome? a. Uptown Mall wins, because Bryce did not fulfill his obligations in 2017. b. Uptown Mall wins, because according to the Statute of Frauds, this contract must be in writing. c. Bryce wins, because the oral contract is valid. d. Bryce wins, because he fully performed his obligations under the contract.
d
Vicki entered into a written contract to buy a car from Valley Motors. During the negotiations, the sales representative said that the car had a two-year full warranty. The written contract included a provision that stated, "This writing is the full and final expression of the parties' agreement; anything said before signing or while signing is irrelevant." The written contract did not include a warranty. Two months after Vicki took delivery of the car, she discovered that the transmission needed to be replaced. Vicki claimed that it was covered by the full warranty. Will Vicki be able to present evidence as to the sales representative's statements concerning the warranty? a. Yes. The leading object rule will allow evidence as to the discussion of the warranty. b. Yes. The evidence is needed because the contract is ambiguous. c. No, because the contract was fully executed. d. No. The parol evidence rule will most likely exclude any evidence of the discussion of the warranty.
d
Vicki entered into a written contract to buy a car from Valley Motors. The written contract included a provision that stated, "This writing is the full and final expression of the parties' agreement; anything said before signing or while signing is irrelevant." This is a. parol evidence. b. an exculpatory clause. c. a Statute of Frauds clause. d. an integration clause.
d
Which of the following is a "special circumstance" in which an oral contract may be enforceable under the UCC? a. The contract is for goods in an amount of $750. b. There are no special circumstances to the UCC; it deems that all contracts must be in writing. c. It is the first transaction between both parties who are not considered to be merchants. d. The seller is specially manufacturing goods for the buyer and begins work on them before the buyer cancels the order.
d
Ike is building a water park in Charleston, South Carolina, with attractions that are larger and more extravagant than anything in the area. Ike cannot afford delays in construction and is nervous about his contractor's ability to finish the project on time. What can Ike do protect himself?
d. Include a liquidated damages clause in the contract.
Lisa makes hand-crafted beads. Lisa approaches Julia, a successful jewelry maker, and offers to sell her beads exclusively to Julia if Julia agrees to buy all of the beads that Lisa makes. Julia agrees to buy all of the beads Lisa produces each month if, after inspecting them, Julia thinks they will sell well. Do Lisa and Julia have an enforceable contract?
d. No, Julia has made an illusory promise.
Evans built a house for Sandra, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the "great room" cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze. Evans wanted the money Sandra promised for the job, but Sandra refused to pay. Who wins?
d. Sandra wins because Evans did not substantially perform.
Cozette hires Baldrick to cook dinner for her family three nights per week for an entire year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate sues Cozette for Baldrick's salary for the rest of the year. What result?
d. The agreement will be discharged due to true impossibility.
In March, Louisa's Hamburger Stand contracts with HydrationCorp to buy 100 bottles of lemonade for $100 and an additional 100 bottles of lemonade for $115 on May 1. After the purchase and delivery of the 100 lemonades in March, Louisa speaks with a HydrationCorp representative and they agree that on May 1 HydrationCorp will instead sell Louisa 100 bottles of iced tea for $115. What result? a. The new terms are binding because the parties created an accord and satisfaction by check. b. The new terms are not binding because contract modifications must be in writing. c. The new terms are not binding. An oral modification is only permissible when it is supported by consideration. d. The new terms may be binding because an oral modification may be binding under the UCC.
d. The new terms may be binding because an oral modification may be binding under the UCC.
Lawyers prefer to negotiate touchy subjects as they arise rather than address them at the beginning of a relationship.
false
Under what circumstances may the court grant Dementas the $50,000 using promissory estoppel?
dementas took out a $50,000 loan the week after tallas' death because he believed he would be able to pay off the loan with the money promised by tallas
Larson entered Forrester's Auto Mart to purchase a used car. Larson found a vehicle with a sales price of $11,000. After Forrester answered all of Larson's questions, Forrester and Larson agreed to a sale. As Larson was leaving to get the money to pay for the car, Forrester told Larson that he thinks Robert Redford formerly owned the car. Larson later learned that Robert Redford had never owned the car. If Larson seeks to rescind the deal based on Forrester's statement, Larson will a. win because there was a misrepresentation of a material fact. b. win because he relied on the misrepresentation. c. lose because Forrester made a unilateral mistake. d. lose because he will not be able to prove reliance on the misrepresentation.
d. lose because he will not be able to prove reliance on the misrepresentation.
What is the strongest argument that Tallas' estate can make against the enforcement of the memo written two months prior to Tallas' death?
dementas was already under a legal duty to provide the services to tallas under the first memo
A minor can undo a contract that has already been completed by having a court _______ the contract to formally cancel it. a. ratify b. disaffirm c. affirm d. rescind
d. rescind
Bob, a house painter, contracts with Ollie to paint a rental house which Ollie owns. Bob hires Rob to take his place as the painter on this contract. What has Bob done?
delegated his duties
The estate's strongest argument is that there is no valid consideration for Tallas' promise to pay Dementas $50,000 because:
dementas had already performed the services which tallas promised to pay
Different facts: Imagine that Bowen had the property appraised by a professional appraiser with a good reputation and no conflict of interest. Suppose that the appraiser valued the land at $250,000 and Bowen paid Barrows that amount in cash when they signed the contract. What result?
different facts
Different facts: Suppose the McAllisters had only owned the property for six months before they sold it to the Silvas, and in that time there had not been a drop of rain. The McAllisters tell the Silvas that the house is in terrific shape but then the realtor, who knows the house well, tells the McAllisters that the previous owners had real problems with the house whenever it rained.
different facts
Courts ________ strict performance because it __________.
dislike enables one party to benefit at the other's expense
In Arizona v. Country Life Insurance, Co., both the plaintiff and defendant present strong arguments. How might the parties have created a life insurance contract differently so that both parties can protect their interests?
draft the agreement so that the payment for the policy is a concurrent condition of the acceptance of the medical exam
Stephanie is craving genuine Canadian maple syrup, so she calls a manufacturer in Montreal and orders two gallons. They agree on a price for the express shipping and for the syrup, but when Stephanie sees the bill on her credit card she is shocked and refuses to pay. Stephanie thought they had agreed to the terms in US dollars and the manufacturer thought they had agreed to the terms in Canadian dollars. What result?
either party can void the contract because it was based on mutual mistake
To create a binding settlement, Sami could offer and the restaurant could accept
either sami's $6 sneakers or her $70 sweater
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 valid contract can legally be voided by either party.
false
Assume that Jessie and Lester have formed a contract whereby Jessie agrees to deliver 10,000 dozen "Grade A Large Eggs" to be shipped in paper cartons. A shortage of paper makes paper cartons much more expensive, so Jessie uses styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on a material breach of the contract.
false
Concurrent conditions arise when there is both a condition precedent and a condition subsequent.
false
Courts always enforce a force majeure clause.
false
Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in exchange for Rick's promise to pay $5 per box. Lucy delivers the candy. Rick pays for the goods. This contract is fully executory.
false
Most contracts are discharged by mutual agreement of the parties.
false
Paid surrogacy contracts are viewed by the legislative majority in all states as immoral and illegal.
false
The vast majority of contracts have either liquidated damages or damage caps.
false
__________ means that some event has occurred that neither party anticipated and _________.
frustration of purpose the contract now has no value for one party
Most contracts are discharged by _________.
full performance
An honest effort to meet both the spirit and letter of the contract is termed
good faith
In regards to the bill, Sami's letter helps demonstrate her
good faith
An exculpatory clause is generally unenforceable when it attempts to exclude liability for
gross negligence or an intentional tort
an express contract
has both parties setting forth their intentions.
The restaurant's strongest argument is that Sami
has given no consideration
If a party is discharged she _________.
has no more duties under contract
Should Brockwell argue that his boat is used for transportation or for recreation?
he should argue it is used for transportation
If Barrows is found to be mentally incompetent
he will probably have to return the $100 to Bowen if he chooses to rescind the agreement
In assessing the validity of a contract, the court will consider _____________________.
how the parties' conduct would be interpreted by a reasonable person
A contract in which one party must be "personally satisfied" by the performance of the other party
ia an enforceable agreement based on the promisee's subjective satisfaction
Kaye contracted to sell Hodges a building for $310,000. The contract required Hodges to pay the entire amount at closing. Kaye refused to close the sale of the building. Hodges sued Kaye. To what relief is Hodges entitled? A.Punitive damages and direct damages B.Specific performance and direct damages C.Consequential damages or punitive damages D.Direct damages or specific performance
idk
Mandy verbally tells a motorcycle dealer that she will make her son's motorcycle payments if he falls behind on them. Will Mandy be legally required to live up to this agreement? A.Yes, absolutely. BYes, if her son is under 18. C.Yes, if Mandy will be the primary driver of the motorcycle. D.Yes, if the motorcycle is worth less than $500. E.No, absolutely not.
idk
When will a court generally discharge a party from an agreement?
if performing a contract is truly impossible or if the other party committed a material breach
Will the contract be enforceable?
if the court determines that Barrows is mentally incompetent, the contract will be voidable
(___) occurs when one party to a contract has more information than the other party. Pursuant to the law of (___), the mistaken party may (___) the contract if the other party takes unfair advantage of what he knows to be an error on the part of the mistaken party.
information asymmetry, unilateral mistake, rescind
A(n) __________ is a writing that the parties intend as the final, complete expression of their agreement.
integrated contract
In January 2014, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2014-2015 academic year. Professor Noe died on May 31, 2014. Her estate
is discharged from any further obligations under the contract
If the restaurant agrees to take Sami's $20, the agreement
is not binding
Peter says to Carolina: "My property is about 2 acres, and I'll need you to clean it up. I pay the going rate. Start work at some point next week." This job offer probably _________________.
is not valid because it is not definite
Jennifer substantially performs her service contract with Gretchen. Due to Jennifer's failure to render complete performance, Gretchen
is required to pay the full contract price, minus the value of Jennifer's defective performance
If a contract makes no mention of a condition,
it can still be clear that the parties implied one
If the stolen electronic equipment is a stereo and an iPod, could this help or hurt Brockwell's case?
it could hurt his case bc his boat is still useable, as the electronics are not vital for use of the boat
If the court finds that Brockwell uses his boat only for recreational purposes and does not enforce the exculpatory clause, it probably means that
it found lgs grossly negligent
Why did the court indicate that judicial determinations of good faith could be dangerous?
it introduces uncertainty into business transactions
Compared to the common law,
it is easier to form a valid contract under the UCC.
If a party to a contract wants to send an approval to the other party, how will he know where to send it?
it is sent to the addresses in the "notices" section of the contract
To whom are businesspeople referring when they mention the "business prevention department?"
lawyers
In Hoosier Energy Rural Electric Cooperative, Inc. v. John Hancock Life Insurance Co., the appellate court held Hoosier
liable because the impossibility doctrine never justifies failure to make a payment
Statutes of limitations
limit the time in which an injured party may sue
A party who wants to be sure it is not obligated to perform under a contract if the other party breaches should
make the terms of agreement conditional, not reciprocal
The UCC allows __________ of existing contracts for the sale of goods without additional consideration.
modification
Lawyers should work to facilitate deals, rather than hinder them. In the long run, it is easier to draft a contract that provides __________ protection than you need because it prevents ___________.
more unpleasant surprises later on
Noncompetition agreements are
more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.
Would Brockwell be more or less likely to win under the new facts?
more likely because repairing an emergency transport vessel is of great public importance
these new facts make it
more likely sami will win
Will and Isaac enter into an agreement in which Isaac will buy Will's prized goose for $500. If, after forming the agreement, both parties learn that that the goose died the day before, this will mean the contract was based on (___) and (___).
mutual mistake, either party can rescind the agreement
When a one party makes an illusory promise _________________.
neither party can enforce the deal
Would Dementas be entitled to the $50,000 if he can prove that he continued to provide his services during the two months after the memorandum was written, until Tallas' death?
no
If the yellow page printers does not have an advertising license, can it argue that it is not liable because it had no contract at all with Art's?
no because art's is the party trying to enforce the contract
is there an implied contract?
no because hoyt's behavior for 23 years indicated he had no intention of marrying norton
was it reasonable for norton to rely hoyt's promises?
no, because he has been promising to divorce his wife for years but never did
is there a quasi-contract?
no, because hoyt was not unjustly enriched
can norton recover under promissory estoppel?
no, because it was not reasonable for norton to rely on the promise
do courts generally uphold promissory estoppel claims?
no, courts treat them with a great deal of skepticism
Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities. The festivities were unexpectedly canceled because of concern over a terrorist attack. Harry is
not obligated to pay under the frustration of purpose doctrine
The person to whom an offer is made is the ___________. The person who made the offer is the ____________.
offeree offeror
(ch 11) olivia agrees that she will bring desiree a cherry pie every monday for a month in exchange for $15 a week. olivia delivers a pie to desiree for four weeks, and desiree pays her each time. olivia continues to deliver desiree lies every monday & desiree continues to pay for another 5 weeks. on the the 10th week, olivia brings a pie and desiree refuses to pay. olivia sues for payment. what result?
olivia will win. the court will rule that they had an implied contract
The primary issue in this case is:
past consideration
integration
prevents either side from later claiming that the two parties had agreed to additional provisions
arbitration
prevents the parties from suing in court and mandates alternative dispute resolution
Would it help or hurt Art's chances of recovery if the court found that his business is a large, sophisticated corporation?
probably hurt
As English judges were developing the common law of contracts in the twelfth and thirteenth centuries,
promises were found not binding unless written and sealed.
Consideration requires a legal benefit to the _________or a legal _________ to the ________. Legal benefit means receiving something _________.
promisor detriment promisee of measurable value
under what theory is norton's suit most likely to succeed?
promissionary estoppel
Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably
reform the contract
The restaurant can successfully sue Sami
regardless of whether or not it deposits the check
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
Statements of fact about the past and present are called
representations and warranties
Parties may ____________ an agreement to terminate all of their respective obligations under the contract.
rescind
Al contracted to sell his house to Bev. Subsequently, they both changed their minds and agreed to cancel the contract. The contract between Al and Bev is discharged by
rescission
Is this a contract for a sale of goods or a sale of services?
sale of services because it concerns advertising
When hiring a lawyer,
select someone who anticipates risks and presents options
PillPharm is negotiating a deal with Happy Valley Health (HVH), for the sale of PillPharm's latest health supplement. PillPharm would like to package its supplements in bottles produced by Frank, but Frank says he will not enter into a contract with PillPharm until the HVH contract is finalized. HVH has sent PillPharm a letter of intent, but Frank thinks it is too vague and refuses to enter into an agreement with PillPharm. What should PillPharm do?
send HVH its own letter of intent, stating that they do have a binding agreement
If the plaintiff in Quake Construction, Inc. v. American Airlines, Inc. could not get a commitment from its subcontractors until it was certain it had the job, what should it have done?
send the defendant its own letter of intent
If an individual signs a contract without indicating she is doing so in her role as an employee of a party to the contract
she is personally liable
Camila commits an act that can be valid consideration when she does something __________________________.
she was not legally required to do in the first place
Situation: The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness throughout. They repaired the buckling wall by installing I-beams to support it. They never resolved the leaks and the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. They stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000. Soon afterwards, they began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages? Why or why not?
situation
Are exculpatory clauses more or less likely to be enforced when they are part of a bailment case?
slightly more likely
An offeree accepts by saying or doing _______________.
something that a reasonable person would understand to mean he wants to take the offer
Letters of intent are ___________ binding.
sometimes
A minor who lies about his age in order to enter in a contract is
sometimes able to disaffirm
Representations and warranties are _________.
statements of facts about the past or present
When a defendant claims that a contract is commercially impracticable because of an unexpected event, the court may choose not to enforce the contract if
the event was truly unexpected
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
If the McAllisters misrepresented the condition of the house
the Silvas would be unable to provide consent to the agreement
Cozette hires Baldrick to cook dinner for her family three nights per week for an entire year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate sues Cozette for Baldrick's salary for the rest of the year. What result?
the agreement will be discharged due to true impossibility
In Minkler v. Safeco Ins. Co. of America the court held that
the ambiguities in the contract must be interpreted to protect the reasonable expectations of the insured
If an auction receives no offers, it means ______________.
the auction received no bids
In Arizona v. Country Life Insurance, Co. the parties disagree on whether
the condition precedent violated public policy
If the McAllisters made fraudulent statements to the Silvas about the house
the contract is voidable
Which of the following is generally NOT in the introductory paragraph of a contract?
the covenants of the contract
The restaurant's best argument in favor of collecting the full $30 from Sami is that
the debt is liquidated
Agreements to accept less than full payment of liquidated debt are not binding because __________________.
the debtor has given no consideration in exchange for reducing the debt
If the court determines that the printer's conduct was gross negligence
the exculpatory clause will not be upheld
Oxtron, Inc. substantially performed its obligations under a service contract. Oxtron is entitled to receive
the full contract price minus the value of the defects
In Dick Broadcasting Co. v. Oak Ridge FM, Inc. the court held that:
the implied covenant of good faith and fair dealing does not create new contractual rights or obligations
A condition is an event that __________. If the condition fails, the party is ___________.
the must occur before a party is obligated under a contract discharged
If the offer specifies no time limit ___________.
the offeree has a reasonable period in which to accept
If the court does not find that the yellow pages printer was grossly negligent, it may still choose not to uphold the exculpatory clause in this case if it finds that
the parties had unequal bargaining power
capacity
the parties should be adults of sound mind
In a contract modification, the phrase "charged with such amendment" refers to
the party who will be adversely affected by the change
What will Art's have to prove in order to win its case?
the printer's conduct was gross negligence
Mary pledges $30,000 to a school for the blind. In reliance on Mary's promise, the school hires an architect to build a cafeteria. Two month later Mary takes back her promise. The school sues and the judge will likely rule that _______________________.
the school will be able to enforce the promise with "moral consideration"
If an item is being sold at auction without reserve: ____________________.
the seller must sell it to the highest bidder, even if it means selling the item for significantly less than it is worth.
consideration
there has to be bargaining that leads to exchange btwn the parties
The majority of states hold that if a seller's form contract and a buyer's form contract contradict one another ______________________________________.
there is a contract and the contradicting terms cancel each other out
In the case of scrivener's error, a court will reform a contract if _________.
there is clear and convincing evidence that the alleged mistake does not actually reflect the true intent of the parties
What does it mean to "control the pen?"
to prepare the first draft of the contract
In O'Brien v. Ohio State University, Coach O'Brien would have committed an anticipatory breach if he had
told OSU he knew that giving a loan to an OSU player and would violate his contract but he was going to do it anyway
Contracts for the sale of fabric, automobiles, computers, furniture, and paper clips would all be governed by Article 2 of the Uniform Commercial Code.
true
It is possible to form a binding contract without intending to.
true
T/F Frank suffers from a mental impairment due to a brain injury from a airplane accident. He contracts with Glena to purchase her dining room furniture. A month later, he tries to void the contract. If he is unable to return the furniture, a court will not rescind the agreement unless Frank can show that Glena acted in bad faith.
true
T/F If a party makes a mathematical error in a contract, the court will usually allow him to rescind.
true
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
Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a
unilateral, implied contract
sami's $95 debt is
unliquidated
Informal contracts often fail to satisfy the Statute of Frauds because they are ____________ or ___________.
vague incomplete
___________ occurs when the parties do not want the contract to be clear.____________ is different; it means that the provision was __________ unclear.
vagueness ambiguity accidentally
It is illegal for someone to be married to two people at the same time. Imagine that when they are both in good health Norton and Hoyt get married but Hoyt has not yet divorced his wife. "It's better than nothing!" says Norton as she puts on her wedding dress. Norton and Hoyt's marriage license would be
void
assume that marriage licenses are subject to typical contract law. Norton and Hoyt's marriage license is probably
void or voidable
If Barrows is found to be mentally incompetent, the agreement with Bowen will be
voidable
Problems with capacity and consent make a contract (___). (___) means the ability of a party to enter a contract in the first place. (___) refers to whether a contracting party truly understood the terms of the contract and whether she made the agreement voluntarily.
voidable, capacity, consent
A contract with a party suffering from a mental impairment is usually (___) contract. If a person has been adjudicated (___) then all of his future agreements are (___).
voidable, incompetent, void
In the case of fraud, the injured party is entitled to the difference between (___) and (___).
what the contract promised, what the contract delivered
In Quake Construction, Inc. v. American Airlines, Inc. the parties disagree on __________, a dispute caused by __________ the letter of intent.
whether or not there was a binding agreement the vagueness of
The case involving Tuppela and Embola demonstrates how courts ____________________.
will enforce a contract that is supported by consideration, regardless of the economic fairness of the contract's terms
the court
will not focus on the fact that the check was seen by a manger
Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely
win, as this warning would be unenforceable
If Louisa hires Chaz to restore an antique urn and the contract requires him to do the work "at a level of excellence high enough to meet Louisa's personal standards" they have created a contract
with a personal satisfaction clause
Could advertising in the yellow pages be considered in the public interest?
yes because it encourages competitions between businesses which helps consumers and it allows small businesses to grow
3. Once Motel Services builds the houses heated with electricity is Central Maine Power obligated to pay?
yes because motel services has fulfilled its part of the bargain
did hoyt know that norton likely relied on his promises?
yes, because she quit her job
Do courts ever refuse to enforce to an express condition in a contract?
yes, if the condition is against public policy
Able hired Carr to restore Able's antique car for $800. The terms of their oral agreement provided that Carr had 18 months to complete the work. Actually, the work could be completed within one year. The agreement is: A.Unenforceable because it covers services with a value in excess of $500 B.Unenforceable because it covers a time period in excess of one year C.Enforceable because personal service contracts are exempt from the Statute of Frauds D.Enforceable because the work could be completed within one year
(d) A contract for the sale of goods worth $500 or more must be in writing—but this is a contract for services, not the sale of goods, so the $800 price is irrelevant. The contract can be completed within one year, and thus it falls outside the Statute of Frauds. This is an enforceable agreement.
Select the two questions that determine whether a statement is an offer:
- Do the offeror's words and actions indicate an intention to make a bargain? - Are the terms of the offer definite?
Under the UCC, in which of the following circumstances would additional terms in an acceptance not become a part of the contract?
- If the offer promptly rejects the new terms - If the terms materially alter the contract - If the offer insisted on its own terms
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
Select the four situations in which you should definitely sign a written contract:
1. the Statute of Frauds requires it 2. the deal is crucial to your life or the life of your business 3. the terms are complex 4. you do not have an ongoing relationship of trust with the other party
Which of the following is required to enforce strict performance?
1. the contract expressly demands it 2. it is reasonable
Which of the following did the court consider when it held in O'Brien v. Ohio State University that the basketball coach's breach was not material?
1. the strength of the OSU basketball team the next season 2. the burden introduced by OSU's self-imposed sanctions 3. the extent of the damage to OSU's reputation
what promises has hoyt made to norton?
1. to divorce his wife, 2. to marry norton, 3. to "take care of her for life"
Select the three reasons why ambiguities are interpreted against the drafter of the contract:
1. to protect people who are unlikely to be represented by a lawyer 2. to protect laypeople from the dangers of form contracts they cannot change 3. to encourage those who prepare contracts to do so carefully
In contract law, a minor is generally someone under the age of (___) . Because a minor (___), she normally can only create a(n) (___) contract.
18, lacks legal capacity, voidable
Anna worries that her brother Nick does not have good health insurance, so she writes a contract stating that if he mows her lawn on the last Saturday of every month she will buy him an expensive insurance policy that he could not otherwise afford "for at least the next six months, and longer if necessary." The next week, Nick gets a great job at an investment bank, which provides him health insurance coverage. Anna congratulates Nick and revokes the deal. The breach of contract infuriates Nick, who sues his sister. What result? a. The court will award Nick nominal damages. b. The court will award Nick liquidated damages. c. The court will award Nick consequential damages. d. The court will award Nick nothing.
A
Harlowe purchases a watercolor painting by a prominent local artist and a RecumbentSloth brand recliner from a yard sale. She pays cash for both items, and the seller promises to deliver them next week. Two days later the seller calls Harlowe and says he no longer wants to sell the items and sends Harlowe back her money. If Harlowe sues, will she be able to get the items she bought? a. Harlowe will be able to get the painting but not the chair. b. Yes. The UCC entitles to Harlowe to the items as well as any consequential damages that resulted from the breach of contract. c. No She will only be entitled to her money back. d. Harlowe will be able to get her money back and may be entitled to damages if she can prove she made a good faith effort to cover.
A
Hector is outraged by the Ellsworth Elementary School charity auction when the school invalidates his winning bid on a trip to Paris, refunds his money, and refuses to give him the plane tickets he won. He suffers no real harm because a group of sympathetic parents pool their money and buy him a comparable trip, but the breach by the school still stings, so he sues. What result is most likely? a. Hector will win nominal damages. b. Hector will win because the school made no effort to mitigate his damages. c. Hector will win reliance damages. d. Hector will win liquidated damages.
A
Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy. Neal is able to sell the 500 pairs to Renny for a much lower amount. Neal then sues Solomon for damages. Neal will be able to recover a. the difference between Solomon's contract price and the amount paid by Renny. b. the amount in the liquidated damages clause. c. Solomon's contract price. d. an amount which depends on whether Solomon intentionally breached because he found cheaper socks somewhere else.
A
good, services, or any other purpose
A bilateral agreement can be for ____
Executed Contract
A contract that has been completely performed by both parties. Both parties have fulfilled their obligations
What, if true, would demonstrate that the McAllisters were not obligated to tell the Silvas about the problems with the house?
A standard inspection of the house would have revealed the problems and the McAllisters had not told the Silvas anything untrue
American Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of gasoline, the company was interested in converting the trucks to propane fuel. It signed a requirements contract with Empire Gas, in which Empire would convert "approximately 3,000" trucks to propane fuel upon American Bakeries' potential request, and would then sell American Bakeries all required propane fuel to run the converted trucks. American Bakeries never requested a single conversion. Empire sued for lost profits. Who wins?
American Bakeries wins because this was a requirements contract which does not require any purchase from Empire.
Output contract
An agreement under which a seller sells 100% of products made by the seller to a single buyer, and the buyer accepts the full quantity.
Illusory promise
An agreement where one party has no obligation to perform or receives all the benefit.
b. has both parties setting forth their intentions.
An express contract a. is not valid in many states. b. has both parties setting forth their intentions. c. must be in writing. d. may be inferred by the conduct of the parties involved.
INJUNCTION
An injunction is a court order that requires someone to do something or refrain from doing something.
Franklin hires Angela to paint his portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a masterful job. Franklin disagrees. He thinks the painting makes him look like a toad. Franklin refuses to pay, and Angela sues Franklin. Who wins and why?
Angela loses because this is a personal satisfaction contract
Malay, the CEO of Santi, Inc., interviews four lawyers to help with a potentially lucrative business deal. He provides each candidate the bare facts of the deal so they can discuss it and present their approaches. Which of the four should he hire?
Anthony, who tells Malay about the risks of that sort of deal and ways to accomplish Santi's goals safely and legally
CPA QUESTION: Nagel and Fields entered into a contract in which Nagel was obligated to deliver certain goods by September 10. On September 3, Nagel told Fields that he had no intention of delivering the goods. Prior to September 10, Fields may successfully sue Nagel under the doctrine of:
Anticipatory breach
c. promises were found not binding unless written and sealed.
As English judges were developing the common law of contracts in the twelfth and thirteenth centuries, a. the term "contract" became common. b. changes in the law occurred rapidly. c. promises were found not binding unless written and sealed. d. most promises were found to be enforceable.
Because of his success in a big case, a lawyer named Melbourne promised his assistant, Barbara, a large bonus. After the case settled, Melbourne met with Barbara to discuss when and how much he would pay her. In the conversation that she secretly recorded, Melbourne agreed to pay Barbara $1 million, plus $65,000 for a luxury automobile. Payments were to be made in monthly installments of $10,000, for 10 years. Melbourne also agreed to sign a document confirming his promise. Barbara's lawyer drafted the writing, but Melbourne never signed it. He did pay nine monthly installments, along with an extra payment of $100,000. Did Melbourne and Barbara have a valid contract? Argument for Barbara: The Statute of Frauds exists to prevent fraud. The fear that a plaintiff would lie about a contract is not an issue here. We know what Melbourne agreed to do because we heard him. Argument for Melbourne: If there was an agreement, it could not have been performed in one year because it had ten years' worth of installment payments.
At trial, jurors heard the tape recording, which confirmed the oral agreement. The jury concluded that the parties had reached a binding agreement and awarded Sawyer $900,000. However, the court granted a judgment notwithstanding the verdict for Mills because the agreement was barred by the Statute of Frauds. Sawyer appealed. Does the Statute of Frauds prevent enforcement of Mills's promise? Argument for Sawyer: The Statute of Frauds exists to prevent fraud. The fear of a plaintiff making up a false contract is legitimate, but obviously it does not apply in this case. We know that Mills agreed to pay a million dollars because we heard him. His own words verify the exact terms of the agreement and his promise to sign his name to it. What more evidence do you need? Argument for Mills: This is a simple case. If there was an agreement, it could not have been performed in one year because it had 10 years' worth of installment payments. Under the Statute of Frauds, an agreement that cannot be performed within one year is unenforceable unless written and signed.
In breach of the partnership agreement, Trimble, a partner in the partnership of Morris, Newt, and Oppie, Ltd. quits the partnership and goes to work for a competitor. The former partners may ask the court for a. liquidated damages as compensation for the breach. b. an injunction to prevent Trimble from working in competition with the former partners. c. specific performance requiring Trimble to return to work for Morris, Newt, and Oppie, Ltd. d. special damages under the rule of Hadley v. Baxendale.
B
John sold a Vermont lakeshore lot for $115,000 to Deborah who intended to build a house on the property. John indicated the land was suitable for the project, but Deborah soon learned that a wetland protection law prevented building near the lake. Deborah sued, seeking rescission of the contract. What is the likely outcome? a. Deborah will likely win specific performance. b. Deborah will likely win restitution damages. c. John will likely win. d. None of these answers is correct.
B
Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills, although the fabric met the contract specifications. In this situation, Wellington Mills a. may resell the fabric to someone else and, if it sues Mulligan, Wellington Mills will be awarded the full contract price. b. may choose not to resell the fabric and settle for the difference between the contract price and the market value. c. would be awarded consequential damages by most courts. d. has at least four remedies under the UCC.
B
Over spring break you go to Florida and accidentally spend too much on your checking account's debit card. When you get back to school, you are shocked to see you owe your bank $220, which you pay back immediately. However, you have not even had time to recover from your sunburn before the bank informs you that, pursuant to the liquidated damages clause in the contract you signed when you opened the account, you are being charged a $55 "overdraft fee" for every transaction you made on your debit card after your balance was $0. Unfortunately, you made nine such transactions, which means you owe the bank an additional $495 in fees (9 x $55 = $495). What is your best argument against the overdraft fees? a. The fee is too high and you are seeking a permanent injunction against the bank. b. The fee is too high and the bank is simply imposing a penalty. c. The fee is unethical and you should be awarded nominal damages. d. The fees are consequential damages for an injury you could not foresee.
B
Pamela was injured in an auto accident by an uninsured driver. Pamela filed a claim with her insurer, American Mutual, for $2,000 under her "uninsured motorist" coverage. American Mutual told her that if she sought that money, her premiums would go "sky high," so Pamela dropped the claim. Later, after speaking with an attorney, Pamela sued. What claim was her attorney likely to make? a. A claim for equitable damages. b. A claim for punitive damages. c. A claim for specific performance. d. A claim for liquidated damages.
B
Rick was in the process of buying 320 acres of land when Rick signed a contract to sell that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before Simon could complete the purchase of the land Rick went bankrupt. Which of the following remedies should Simon seek from Rick? a. Expectation. b. Restitution. c. Specific Performance. d. Reformation.
B
The remedy of reformation a. is available only if fraud is involved. b. can be used to correct mistakes in the original contract. c. applies only when money damages are inadequate. d. is a commonly used remedy.
B
Which of the following is what a plaintiff is required to prove before a court will enforce a contract for liquidated damages? a. The defendant's breach was caused by his own negligence b. At the time the contract was formed, it was very difficult to estimate actual damages c. The liquidated amount was reasonable d. The harm to the plaintiff was at least as great as the value of the liquidated damages
B,C
Which of the following are unique assets for which a court will order specific performance of a contract? a. Shares of a public company b. A family heirloom c. A patent d. A poster depicting a famous sculpture e. Airplane tickets to France f. An apartment g. A secret formula
B,C,F,G
Which of the following are possible outcomes for the buyer when the seller breaches a contract for the sale of goods? a. the buyer is not permitted to recover consequential damages b. the buyer may purchase similar goods from another seller and the breaching party will pay the difference between the cover price and their original contract price c. the buyer may purchase similar goods from another seller and the breaching party will reimburse the buyer for the full purchase price of the similar goods d. the buyer may decline to purchase similar goods from another seller, and the breaching party will pay the buyer the difference between the contract price and the market value of the goods e. the buyer can recover punitive damages
B,D
Which of the following are the four prerequisites to preliminary injunctive relief mentioned in Milicic v. Basketball Marketing Company, Inc.? a. BMC had acted in bad faith b. Injunctive relief was necessary to prevent immediate and irreparable harm that could not be adequately compensated by monetary damages c. The need for injunctive relief was unlikely after the jury rendered a verdict d. Milicic's complaint was likely to succeed at trial e. Preliminary injunction restored the parties to the status quo that existed prior to the wrongful conduct The parties' original contract contained a concurrent condition f. Greater harm would be caused by denying the injunction than from granting the injunction
B,D,E,F
Why are mentally incompetent people generally required to make full restitution?
Because mental incompetence is not always obvious to the other party in the contract
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.
Reformation allows courts to rewrite part of a contract when it includes a simple mistake, --
But courts are generally reluctant to reform a contract because doing so introduces unpredictability into contracts.
if one party had paid some amount of money
By the fifteenth century, courts would permit suits based on a broken promise ___
The concept that an injured party may recover consequential damages only if the breaching party should have foreseen them was established in a. Putnam Construction & Realty Co. v. Byrd. b. Toscano v. Greene Music. c. Hadley v. Baxendale. d. Bi-Economy Market, Inc. v. Harleysville Ins. Co. of New York.
C
The first step a court takes in choosing a remedy is to determine a. if punitive damages should be awarded. b. whether the injured party mitigated its damages. c. what interest it is trying to protect. d. if the damages can be quantified with reasonable certainty.
C
Yvonne promises to sell 500 lbs of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a contract with McKinley Ventures to ship the cargo. The contract stipulates that McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not arrive for 5 days, during which time the market price of rice decreases 11 percent. Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her damages because of McKinley's breach? a. Yes, because McKinley's breach caused the damages. b. Yes, if Yvonne can provide the court with enough information to calculate the extent of her loss. c. No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money. d. No, because this is a contract for the sale of goods.
C
you are the best judge of your own welfare
Contract law is based on the notion that
b. "as much as he deserves."
Courts may award damages called quantum meruit, which means a. "something for something." b. "as much as he deserves." c. "to the letter of the law." d. "let the buyer beware."
Costs to store a vehicle for a short period of time after an auto dealer fails to complete the contract to purchase the vehicle would be considered a. punitive damages. b. compensatory damages. c. consequential damages. d. incidental damages.
D
Ike is building a water park in Charleston, South Carolina, with attractions that are larger and more extravagant than anything in the area. Ike cannot afford delays in its construction and is nervous about his contractor's ability to finish the project on time. What can Ike do protect himself? a. Sue for reliance damages if there are delays in construction. b. Reform the contract. c. Sue the contractor for nominal damages if there are delays in construction. d. Include a liquidated damages clause in the contract.
D
John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The agreement states that John will pay $500 when the contract is signed and the remaining $500 when FashionWare delivers the zippers. In the contract, John specifically states that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse in 30 days. FashionWare breaches the contract, causing John to miss his delivery date with Camper's Crevasse, which then cancels its contract with John. What remedies are available to John? a. John can recover $1,000 from FashionWare. b. Under the UCC, a buyer of goods is not entitled to consequential damages, so John can recover only the $500 he paid for the zippers. c. John can recover from FashionWare the $500 he paid for the zippers and any reliance interest. d. John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse.
D
Lewis signed a contract for the rights to all timber located on Nine-Mile Mine agreeing to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him from entering the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf for which Lewis had no contradicting evidence. The court granted summary judgment. Why? a. The market value evidence proved that Lewis could not recover punitive damages. b. Specific performance, the typical remedy for an interest in land, could not make Lewis whole. c. Nine-Mile was not liable because it cannot be held liable for fluctuations in the market rate for timber. d. The market value evidence shows that Lewis suffered no harm and therefore had no claim.
D
Specific performance may be available for the breach of a contract to sell a. a Nintendo WII video game system. b. a 2007 Mustang in mint condition. c. 20 shares of WalMart stock. d. an original painting.
D
To "undo" a contract and put the parties where they were before they made the agreement is called a. remediation. b. restitution. c. reliance. d. rescission.
D
Under the UCC, if a seller of goods breaches the contract, the buyer a. must "cover." b. may receive only the current market value of the goods. c. will be awarded the difference between the original contract price and the market value of the goods if the buyer chooses to "cover." d. may "cover" and then receive the difference between the original contract price and the "cover" price.
D
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.
Tim's Lumber Co. agrees to provide Deckbuilders, Inc. with all of the wood that Deckbuilders requires for the next five years. Deckbuilders agrees not to buy wood from any other vendors. What is the primary restriction on how much wood Deckbuilders may demand?
Deckbuilders' demand for wood must be made in good faith.
Sam and Elias agree in writing that Sam will give Elias needlepoint lessons once a week for five weeks in exchange for $1,000 per lesson. The contract stipulates that if either party is going to cancel a lesson, it must provide 48 hours notice. On the morning of the second lesson, Elias calls Sam and says he cannot make it because earthquake damage has closed all roads leading out of his town. Will Elias owe Sam for the missed lesson?
Elias will not be liable if the contract contains a clause discharging the obligation if there is a force majeure provision
Sam and Elias agree in writing that Sam will give Elias needlepoint lessons once a week for five weeks in exchange for $1,000 per lesson. The contract stipulates that if either party is going to cancel a lesson, they must provide 48 hours' notice. On the morning of the second lesson, Elias calls Sam and says he cannot make it because earthquake damage has closed all roads leading out of his town. Will Elias owe Sam for the missed lesson?
Elias will not be liable if the contract contains a clause discharging the obligation if there is a force majeure provision.
Donald Waide had a contracting business. He bought most of his supplies from Paul Bingham's supply center. Waide fell behind on his bills, and Bingham told Waide that he would extend no more credit to him. That same day, Donald's father, Elmer Waide, came to Bingham's store, and said to Bingham that he would "stand good" for any sales to Donald made on credit. Based on Elmer's statement, Bingham again gave Donald credit, and Donald ran up $10,000 in goods before Bingham sued Donald and Elmer. What defense did Elmer make, and what was the outcome?
Elmer made a promise to pay the debt of another. He did so as a favor to his son. This is a collateral promise. Elmer never signed any such promise, and the agreement cannot be enforced against him.
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.
Clickwrap terms are never binding.
False
Courts are skeptical of email contracts because they want to prevent parties from entering into contracts unintentionally.
False
If a contract for the sale of goods specifies that modifications must be made in a writing signed by the parties, a verbal agreement by the parties to different terms may be enforced.
False
If a defendant did not sign his full name on a contract, the contract will not satisfy the Statute of Frauds.
False
Pursuant to the "peppercorn rule", courts will refuse to enforce contracts that are economically unfair if the parties did not have equal bargaining power.
False
T/F Courts do not grant restitution damages in instances where a party conferred a benefit but there was no valid contract.
False
T/F Dr. Gonzalez ordered specialized surgical equipment from Physician's Supply Co., but the company informed Dr. Gonzalez that it would not be able to meet his order by the agreed date. Even if Dr. Gonzalez does nothing to secure equipment from another source, he will be able to recover damages since the contract was breached by Physician's Supply, not Gonzalez.
False
T/F If a contract contains a simple error, a court is obligated to reform the contract, rather than refuse to enforce it.
False
T/F Injunctions are frequently used by courts to force employees to complete their contractual obligations with their employers.
False
T/F Liquidated damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.
False
T/F Tess, a tenant, moves from her apartment in breach of the lease agreement. The landlord, Lenny, may not attempt to rent the apartment until the date of the lease expiration, and so has no recourse to minimize damages.
False
T/F When a party breaches a contract, the court can only award the injured party monetary damages.
False
The Statute of Frauds was written to prevent fraud in criminal suits.
False
enforceable
For a contract to be ____, seven requirements must be present.
Which of the following are examples of a deal supported by consideration?
Freya buys a gift certificate to a spa
FRUSTRATION OF PURPOSE
Frustration of purpose may occur when an unexpected event renders a contract completely useless to one party.
Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit?
Gintzler will win because he gave consideration.
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.
The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years. As part of the remodeling, it is installing a new sound system. The sound system is to be installed by Sound Systems, Inc. on or before April 10. Opening night of the hall is May 1. The contract states that "time is of the essence" because of the opening-night deadline. Sound Systems has some financial difficulties and doesn't deliver the system until April 20. Grand Hall refuses to accept it, and Sound Systems sues. What will be the result?
Grand Hall wins; the contract date was strictly enforceable
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.
Racicky was in the process of buying 320 acres of ranchland. While that sale was being negotiated, Racicky signed a contract to sell the land to Simon. Simon paid $144,000, the full price of the land. But Racicky went bankrupt before he could complete the purchase of the land, let alone its sale. Which of these remedies should Simon seek: expectation, restitution, specific performance, or reformation?
He should, and did, seek restitution. Expectation damages will be unavailable since Racicky is bankrupt. Specific performance is impossible because Racicky does not own the land. Reformation is irrelevant. Simon gets restitution, since he has conferred a benefit on Racicky and it would be unjust for the defendant to keep it. Racicky v. Simon, 831 P.2d 241, 1992 Wyo. LEXIS 60 (Wyo. 1992).
Lonnie Hippen moved to Long Island, Kansas, to work in an insurance company owned by Griffiths. After he moved there, Griffiths offered to sell Hippen a house he owned, and Hippen agreed in writing to buy it. He did buy the house and moved in, but two years later, Hippen left the insurance company. He then claimed that at the time of the sale, Griffiths had orally promised to buy back his house at the selling price if Hippen should happen to leave the company. Griffiths defended based on the Statute of Frauds. Hippen argued that the Statute of Frauds did not apply because the repurchase of the house was essentially part of his employment with Griffiths. Comment.
Hippen's claim fails. The purchase—or repurchase—of a house is the classic interest in land, and any such promise must be written to be enforceable. Hippen v. First National Bank, 1992 U.S. Dist. LEXIS 6029 (D. Kan. 1992).
Most contracts are discharged by:
IDK
Stephen Muka owned U.S. Robotics. He hired his brother Chris to work in the company. His letter promised Chris $1 million worth of Robotics stock at the end of one year, "provided you work reasonably hard & smart at things in the next year." (We should all have such brothers.) Chris arrived at Robotics and worked the full year, but toward the end of the year, Stephen died. His estate refused to give Chris the stock, claiming their agreement was a personal satisfaction contract and only Stephen could decide whether Chris had earned the reward. Comment.
IDK
YOU BE THE JUDGE WRITING PROBLEM: Kuhn Farm Machinery, a European company, signed an agreement with Scottsdale Plaza Resort, of Arizona, to use the resort for its North American dealers' convention during March 1991. Kuhn agreed to rent 190 guest rooms and spend several thousand dollars on food and beverages. Kuhn invited its top 200 independent dealers from the United States and Canada and about 25 of its own employees from the United States, Europe, and Australia, although it never mentioned those plans to Scottsdale.
IDK
Big Co., a construction company, builds a grocery store. The contract calls for a final price of $5 million. Big Co. incurred $4.5 million in costs and stands to make a profit of $500,000. On a final inspection, the grocery store owner is upset. His blueprints called for 24 skylights, but the finished building has only 12. Installing the additional skylights would cost $100,000. Big Co. made no other errors. How much must the grocery store owner pay Big Co.?
IDK A. $5,000,000 B. $4,900,000 C. $4,500,000 D. $0
Jacobi is visiting Sheila at her apartment while she is redecorating, and Sheila asks him if he would like to buy her two sofas that she is replacing. Sheila tells Jacobi that the sofas are in great condition and are the most comfortable she has ever had. She acknowledges that some of the fabric on the sofas is slightly worn but says that is their only issue. Jacobi buys the sofas on the spot, but once they are back at his house he finds that one of them is infested with bed bugs. Jacobi has to throw out the infested sofa and pay a special exterminator to come and get rid of the insects. Jacobi sues Sheila. Assume their jurisdiction follows the majority approach. How will the court rule?
If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages.
what if the facts were different
Imagine that Brockwell's boat was an emergency transport vessel, used to transport patients quickly across the lake to the nearest hospital, and LGS damaged medical equipment in the boat.
what if the facts were different?
Imagine that Norton and Hoyt never broke up. Hoyt divorces his wife (who is glad to be rid of him) and Norton and Hoyt stay together for several decades without getting married. Sadly, Hoyt eventually suffers from a severe brain disease that makes it difficult for him to speak or even have a true understanding of where he is or to whom he is speaking. Norton is perfectly healthy and cares for Hoyt. One day, she brings him to the town hall and they fill out a marriage license. At last they are married!
the contract did not specify any quantity of goods
In Fallsview Glatt Kosher Caterers, Inc. v. Rosenfeld the court found that the UCC did not govern the contract because ___.
express contract
In a(n) ___ the two parties explicitly state all the important terms of their agreement.
implied contract
In a(n) ___ the words and conduct of the parties indicate that they intend an agreement.
Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins?
Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps.
B. The contract is void because the purpose of the deal is illegal.
Isaac puts together a plan to rob First National Bank, and hires Cynthia to assist him when he does it. He and Cynthia agree that Cynthia will be paid $3,000 for her help in the heist. The day before they are set to rob the bank, Cynthia backs out of the deal, saying she does not want to commit a crime. Isaac sues to enforce the agreement. What result? A. This was an executory agreement and Isaac will be able to enforce it. B. The contract is void because the purpose of the deal is illegal. C. This was a unilateral agreement, and Isaac will not be able to enforce the contract because Cynthia never accepted. D. The contract is voidable because it concerns a crime.
You are considering joining an online club. Before continuing to the membership page, the site presents you with hundreds of lines of dense legalistic text and asks you agree to them. You click the "I agree" box. Will you be bound by the terms?
It depends on what state you are in.
James River-Norwalk, Inc., was a paper and textile company that needed a constant supply of wood. James River orally contracted with Gary Futch to supply wood for the company, and Futch did so for several years. The deal was worth many thousands of dollars, but nothing was put in writing. Futch actually purchased the wood for his own account and then resold it to James River. After a few years, James River refused to do more business with Futch. Did the parties have a binding contract?
James River was buying wood, and this is a contract for the sale of goods. With nothing in writing, signed by James River, Futch has no enforceable agreement.
John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The agreement states that John will pay $500 when the contract is signed and the remaining $500 when FashionWare delivers the zippers. In the contract, John specifically states that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse in 30 days. FashionWare breaches the contract, causing John to miss his delivery date with Camper's Crevasse, which then cancels its contract with John. What remedies are available to John?
John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse.
Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule.
Krug wins because of true impossibility.
Bingo is emerging as a rock star. His last five concerts have all sold out. Lucia signs a deal with Bingo to perform two concerts in one evening in Big City for a fee of $50,000 for both shows. Lucia then rents the Auditorium for that evening, guaranteeing to pay $50,000. Bingo promptly breaks the deal before any tickets are sold. Lucia sues, pointing out that the Auditorium seats 3,000 and she anticipated selling all tickets for an average of $40 each, for a total gross of $120,000. How much will Lucia recover, if anything?
Lucia can easily demonstrate that Bingo's breach cost her $50,000—the cost of the hall. However, it is uncertain how many tickets she would have sold. Unless Lucia has a strong track record selling tickets to concerts featuring Bingo, a court is likely to conclude that her anticipated profits were speculative. She will probably receive nothing for that claim.
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.
d. win, as this warning would be unenforceable
Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely a. lose, as he assumed the risk. b. lose, as he agreed to not hold the lawnmower manufacturer liable. c. win, as all lawnmower manufacturers are strictly liable. d. win, as this warning would be unenforceable.
what if the facts were different?
Motel Services completes the housing project for Waterville, Maine, and it is heated by electricity. Central Maine power honors the promotion and pays Motel Services $25,000. Suppose that in the last year Motel Services has completed four housing projects for Waterville that are all identical to the one it just built. Some had electrical heat and some did not, but they were all built before Central Maine Power made its promotional offer. Waterville and Motel Services used the same contract for all five housing projects. The City of Waterville asks Motel Services for the $25,000 and Motel Services refuses.
Lewis signed a contract for the rights to all timber located on Nine-Mile Mine. He agreed to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him to enter the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf, and Lewis had no evidence to contradict Nine-Mile. The evidence about market value proved decisive. Why? Please rule on the summary judgment motion.
Motion granted. Nine Mile may have breached the agreement, but there is no evidence that Lewis lost money. To win he must demonstrate a difference between the contract price and the market value of the timber. There was no difference, and he recovers nothing. Lewis v. Nine Mile Mines, Inc., 886 P.2d 912, 1994 Mont. LEXIS 283 (Mont. 1994).
TuffGrip ran an advertisement for its brake pads in several national automotive industry journals. The ad listed a range of prices for the brake pads and a few technical specifications. At the bottom, the ad stated that TuffGrip had no liability in the event of a malfunction. Three large mechanic chains purchased the brake pads after seeing the ad, and signed standard TuffGrip purchase orders. Many of the brake pads that these mechanic chains installed in customers' cars failed, causing severe injuries to drivers who could not stop their cars. TuffGrip claimed it had no liability to the mechanic chains. Is TuffGrip correct?
No, TuffGrip is liable unless the purchase orders also included the limitation of liability.
Rothman's clothing store had a 20-year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's?
No, based upon the "good faith" requirement.
Annisa, owner of the party planning company Palacial Parties, Inc., is hired by Jerard to organize a spectacular celebration for his girlfriend Amber. Amber was just named winner of the national vocal competition "America Sings," and is arriving home in less than 24 hours. Jerard asks Annisa to hire Jack Flash, Amber's favorite vocal artist, to give a concert on the night of the party. Annisa works very hard trying to get the event together with such short notice, but is unable to get in touch with Jack Flash, who was traveling in Antarctica. The day of the party, there is no entertainment to welcome Amber home, and Jerard files a breach of contract suit against Annisa's company the next day. Jerard also calls Jack Flash and tells him about the missed opportunity; Jack Flash quickly joins the suit against Palacial Parties. Does Jack have a claim for breach of contract against Annisa?
No, because he is an incidental beneficiary.
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
Yvonne promises to sell 500 pounds of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a contract with McKinley Venturesto to ship the cargo. The contract stipulates that McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not arrive for 5 days, during which time the market price of rice decreases 11 percent. Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her damages because of McKinley's breach?
No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money.
Honeybrook Pies and Elsie's Bakery enter into a contract in which Honeybrook will deliver 25 rhubarb pies to Elsie's each week for six months. The next week, Elsie assigns its rights with Honeybrook to Namaste Restaurant, a neighboring café, as part of a new contract. Namaste informs Honeybrook that it only serves food that is both vegan and gluten free, so the rhubarb pies will have to be made differently. Honeybrook has never used vegan or gluten free ingredients and to purchase them and find a new recipe would be extremely expensive. Can Elsie's assign the contract to Namaste?
No, because it would substantially change the obligor's position.
After going through her old clothes, Farra asks her friend Michelle if she would like to buy any of them, stating she is hoping to get at least $50. Michelle responds that she will pay $5 for each piece that she would like to buy. The next day, Michelle tells Farra that she does not want any of the clothes. Has Michelle violated the agreement with Farra?
No, because of Michelle's illusory promise, she and Farra did not have an enforceable agreement.
Simon, aged 10, is invited to a classmate's birthday party at an exclusive ski resort on March 15th. The day will include 4 hours of snowboarding, lunch and birthday cake. Simon's mother checks a box on the invitation that says "YES, we will attend" and returns it to the classmate's address. Unfortunately, they later don't attend the party when Simon comes down with the flu. On March 17th, Simon's mother receives an invoice in the mail from Simon's classmate for $35 that says, "Party No-Show Fee." Can Simon's classmate collect the fee?
No, because there was no intent to form a contract by Simon's mother.
Rafferty, a caterer, and Maya, an opera singer, are pleased to be hired to provide their respective services at the same wedding. Unlike Maya's contract, Rafferty's contains a non-delegation clause. Two days before the wedding, Rafferty and Maya decide to go on vacation, so they delegate their wedding obligations to friends they know and trust. The bride and groom object. Is delegation permissible?
No. Neither Rafferty nor Maya can delegate their obligations.
Louise Latour, a successful interior designer, won a contract to design the interiors of Greentree Broadcasting's corporate headquarters. A few weeks after signing the agreement, Greentree receives a much cheaper bid from another designer and decides to get out of the contract. A Greentree lawyer notices that the top of the contract contains an embarrassing typographical error: It states that the agreement is between "Louise Latour and Grantree Broadcasting." Will Greentree be able to use this mistake to get out of the contract?
No. There is clear and convincing evidence that the mistake does not reflect the intent of the parties and the court will reform the contract
Florian, a busy surgeon, reads about a new state-of-the-art surgical mask developed by Myriad Medical Devices (M.M.D.) and thinks it would be useful for his practice. Florian enters into a contract with M.M.D. in which M.M.D. agrees to sell the doctor all the masks he needs in the next six months. Shortly thereafter, a fire burns down Florian's practice, and he will be unable to see patients for at least 9 months. Florian will not need a single mask until the practice is back up and running. If M.M.D. sues Florian for breach of contract when Florian does not order any masks, will M.M.D. win?
No. This is a requirements contract and Florian acted in good faith.
d. more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.
Noncompetition agreements are a. now illegal, as they violate antitrust laws. b. infrequently litigated. c. relatively recent developments, first used following the Great Depression in the United States. d. more common today than they were in the past, although policy issues they raised in the 1700s have never gone away.
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 30 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.
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.
Oliver found some cozy-looking winter gloves for a great price in a catalog. He decided to purchase a pair for himself and additional pairs for every member of his extended family. He mailed in the order form, along with a check. Two weeks later the catalog company informed Oliver that it had run out of gloves and would not charge him. Oliver sues. What result?
Oliver will lose as long as the company can show it was acting in good faith.
Olivia agrees that she will bring Desiree a cherry pie every Monday for one month in exchange for $15 per week. Olivia delivers a pie to Desiree for four weeks, and Desiree pays her each time. Olivia continues to deliver Desiree pies every Monday, and Desiree continues to pay for another five weeks. On the tenth week, Olivia brings a pie and Desiree refuses to pay. Olivia sues for payment. What will result?
Olivia will win. The court will rule that they had an implied contract.
Omkara, a furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A day before Gnome is going to ship the foam to Omkara, a flood destroys its entire inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that FirmFoam can supply her with an identical shipment for $65,000. This increase in price will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara wants to get out of both contracts. Can she?
Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform
PERSONAL SATISFACTION
Personal satisfaction contracts are interpreted under an objective standard, requiring reasonable ground for dissatisfaction, unless the work involves personal judgment and the parties intended a subjective standard.
If a contract contains a condition precedent, the _____ has the burden of proving that the condition actually happened. If a condition subsequent exists, the _____ has the burden of showing that the condition occurred.
Plaintiff; defendant
Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result?
Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.
Rick was in the process of buying 320 acres of land when Rick signed a contract to sell that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before Simon could complete the purchase of the land, Rick went bankrupt. Which of the following remedies should Simon seek from Rick?
Restitution
Question: John Marshall and Kirsten Fletcher decided to live together. They leased an apartment, each agreeing to pay one-half of the rent. When he signed the lease, Marshall was 17. Shortly after signing the lease, Marshall turned 18, and two weeks later, he moved into the apartment. He paid his half of the rent for two months and then moved out because he and Fletcher were not getting along. Fletcher sued Marshall for one-half of the monthly rent for the remainder of the lease. Who wins?
Result: A minor can disaffirm a contract. However, if he turns 18 and then ratifies the agreement, he is fully liable. When he paid the rent, Marshall ratified the contract, and thus he is fully liable.
Question: Ron buys 1,000 "Smudgy Dolls" for his toy store. Karen, the seller, tells him the dolls are in perfect condition, even though she knows their heads are defectively attached. Ron sells all of the products, but then he has to face 1,000 angry customers with headless dolls. Ron sues Karen seeking recission. What is the likely outcome? This is fraud, and Ron will be able to rescind. This is an innocent misrepresentation, and Ron will be able to rescind. This is fraud, but Ron will not be able to rescind. This is an innocent misrepresentation, but Ron will not be able to rescind. This is neither fraud nor an innocent misrepresentation.
Result: Karen made a false statement of fact, knowing it was wrong. It was material, and Ron reasonably relied on her. Karen has committed fraud. Ron is entitled to rescind the agreement. The correct answer is "a."
Question: Colony Park Associates signed a contract to buy 44 acres of residential land from John Gall. The contract stated that closing would take place exactly one year later. The delay was to enable Colony Park to obtain building permits to develop condominiums. Colony Park worked diligently to obtain all permits, but delays in sewer permits forced Colony Park to notify Gall it could not close on the agreed date. Colony Park suggested a date exactly one month later. Gall refused the new date and declined to sell. Colony Park sued. Gall argued that since the parties specified a date, time was of the essence and Colony Park's failure to buy on time discharged Gall. Please rule.
Result: Merely including a date for performance does not make time of the essence. A party that considers a date critical must make that clear. This contract did not indicate that the closing date was vital to either party, so a short delay was reasonable. Gail was ordered to convey the land to Colony Park.
Question: Andreini's nerve problem diminished the use of his hands. Dr. Beck operated, but the problem grew worse. A nurse told the patient that Beck might have committed a serious error that exacerbated the problem. Andreini returned for a second operation, which Beck assured him would correct the problem. But after Andreini had been placed in a surgical gown, shaved, and prepared for surgery, the doctor insisted that he sign a release relieving Beck of liability for the first operation. Andreini did not want to sign it, but Beck refused to operate until he did. Later, Andreini sued Beck for malpractice. A trial court dismissed Andreini's suit based on the release. You are on the appeals court. Will you affirm the dismissal or reverse?
Result: The Utah Supreme Court reversed the trial court, so you probably should as well. Beck forced Andreini to sign under duress. The threat to withhold surgery was improper, and Andreini had no reasonable alternative.
Question: Stephen Krogness, a real estate broker, agreed to act as an agent for Best Buy Co., which wanted to sell several of its stores. The contract provided that Best Buy would pay Krogness a commission of 2 percent for "a sale to any prospect submitted directly to Best Buy by Krogness." Krogness introduced Corporate Realty Capital (CRC) to Best Buy, and the parties negotiated but could not reach agreement. CRC then introduced Best Buy to BB Properties (BB). Best Buy sold several properties to BB for $46 million. CRC acted as the broker. Krogness sought a commission of $528,000. Is he entitled to it?
Result: The conditional clause requires Best Buy to pay a commission for "a sale to any prospect submitted directly to Best Buy by Krogness." Krogness did not in fact introduce BB Properties to Best Buy. The condition has not occurred, and Best Buy is under no obligation to pay.
Question: Omega Concrete had a gravel pit and factory. Access was difficult, so Omega contracted with Union Pacific Railroad (UP) for the right to use a private road that crossed UP property and tracks. The contract stated that use of the road was solely for Omega employees and that Omega would be responsible for closing a gate that UP planned to build where the private road joined a public highway. In fact, UP never constructed the gate; Omega had no authority to construct the gate. Mathew Rogers, an Omega employee, was killed by a train while using the private road. Rogers's family sued Omega, claiming that Omega failed to keep the gate closed as the contract required. Is Omega liable?
Result: There was no gate, and Omega had no right to build one. This is a case of true impossibility. Omega was not liable.
On August 2, 1990, Iraq invaded Kuwait, and on January 16, 1991, the United States and allied forces were at war with Iraq. Saddam Hussein and other Iraqi leaders threatened terrorist acts against the United States and its allies. Kuhn became concerned about the safety of those traveling to Arizona, especially its European employees. By mid-February, 11 of the top 50 dealers with expense-paid trips had either canceled their plans to attend or failed to sign up. Kuhn postponed the convention. The resort sued. The trial court discharged the contract under the doctrines of commercial impracticability and frustration of purpose. The resort appealed. Did commercial impracticability or frustration of purpose discharge the contract? Argument for Scottsdale Plaza Resort: The resort had no way of knowing that Kuhn anticipated bringing executives from Europe, and even less reason to expect that if anything interfered with their travel, the entire convention would become pointless. Most of the dealers could have attended the convention, and the resort stood ready to serve them. Argument for Kuhn: The parties never anticipated the threat of terrorism. Kuhn wanted this convention so that its European executives, among others, could meet top North American dealers. That is now impossible. No company would risk employee lives for a meeting. As a result, the contract has no value at all to Kuhn, and its obligations should be discharged by law.
Reversed. Summary judgment granted for Scottsdale Plaza, with the case remanded to the trial court to assess damages. Kuhn has no legitimate claim for impossibility or impracticability. Kuhn does not and cannot allege that it was impossible for it to perform, but rather that the resort's performance had been rendered worthless. That is a claim of frustration of purpose. To win on such a claim, Kuhn must show that the principal purpose in entering the contract was a convention at which the European employees would appear. That was not a principal purpose of the contract. Further, the majority of dealers were still prepared to attend. There has been no frustration of purpose. 7200 Scottsdale Road v. Kuhn Farm Machinery, Inc., 909 P.2d 408, 1995 Ariz. App. LEXIS 108 (Ariz. Ct. App. 1995).
Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome? a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job. b. Rodolfo owes Tessa no additional money, because she had a preexisting duty to complete the project. c. Rodolfo owes Tessa the additional money because Tessa has done additional work. d. Rodolfo owes Tessa the additional money because he had a preexisting duty to pay her for the job.
Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.
Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials, and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome?
Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.
Evans built a house for Sandra, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the "great room" cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze. Evans wanted the money Sandra promised for the job, but Sandra refused to pay. Who wins?
Sandra wins because Evans did not substantially perform
Sarah died at age 70 from health problems stemming from years of smoking cigarettes. Her illnesses made the last few years of her life very painful, and her unemployed 55-year-old boyfriend Jay took care of her daily needs. Sarah had made a lot of money during her life from developing several successful shopping malls. When her children find out that she has left all the money to Jay, they want to invalidate her will. What will they have to show?
Sarah trusted Jay, and that he exerted improper influence over her
The public was unlikely to be injured by the agreement The parties exchanged fair consideration The terms were not necessarily unreasonable
Select all of the factors cited by the court in Davis v. Mason as the basis for its ruling on the noncompetition agreement:
Is it certain that the defendant promised to do something? If the defendant did promise, is it fair to make her honor her word? If she did not promise, are there unusual reasons to hold her liable anyway?
Select the three basic questions that are important when analyzing contracts
PillPharm is negotiating a deal with Happy Valley Health (HVH) for the sale of PillPharm's latest health supplement. PillPharm would like to package its supplements in bottles produced by Frank, but Frank says he will not enter into a contract with PillPharm until the HVH contract is finalized. HVH has sent PillPharm a letter of intent, but Frank thinks it is too vague and refuses to enter into an agreement with PillPharm. What should PillPharm do?
Send HVH its own letter of intent stating that they do have a binding agreement.
The Onyx Company negotiated intensely for months to hire Robert Conyers as its new Chief Executive Officer (CEO). Attorneys for both the Company and Mr. Conyers were now working on the final employment contract, and it was especially important to the Onyx Company to keep their new CEO for at least 10 years. Because Mr. Conyers had exceptional skills and considerable experience related directly to the company's industry, it was important for the contract to include an atypical retention clause in the event of a merger with another entity. If Onyx's attorney was concerned about enforceability of the retention segment, what could they add to the contract to safeguard the rest of the provisions?
Severability provision
Silas has agreed to dig five wells on Noreen's property over the next month, working each weekday. One Friday, after Silas has completed three wells for Noreen, he informs Noreen that on Monday he is going to start a project digging sixty wells for Romeo and that job will take him about a year. What does this mean for Noreen?
Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract
Situation: Raymond Barrows owned a 17-acre parcel of undeveloped land in Seaford, Delaware. For most of his life, Mr. Barrows had been an astute and successful businessman, but by the time he was 85 years old, he had been diagnosed as "very senile and confused 90 percent of the time." Glenn Bowen offered to buy the land. Barrows had no idea of its value, so Bowen had it appraised by a friend, who said it was worth $50,000. Bowen drew up a contract, which Barrows signed. In the contract, Barrows agreed to sell the land for $45,000, of which Bowen would pay $100 at the time of closing; the remaining $44,900 was due whenever Bowen developed the land and sold it. There was no time limit on Bowen's right to develop the land nor any interest due on the second payment. Comment.
Situation
Slimline and Distributor signed a contract that provided that Distributor would use reasonable efforts to promote and sell Slimline Diet Soda, which was already being sold at Warehouse Club. After the contract was signed, Distributor stopped conducting the in-store demos of Slimline it had previously been doing at Warehouse and it did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who is likely to win?
Slimline, because Distributer's conduct is a material breach
Slimline and Distributor signed a contract that provided that Distributor would use reasonable efforts to promote and sell Slimline Diet Soda, which was already being sold at Warehouse Club. After the contract was signed, Distributor stopped conducting the in-store demos of Slimline it had previously been doing at Warehouse, and it did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who is likely to win?
Slimline, because Distributer's conduct is a material breach
Slimline and Distributor signed a contract that provided that Distributor would use reasonable efforts to promote and sell Slimline Diet Soda, which was already being sold at Warehouse Club. After the contract was signed, Distributor stopped conducting the in-store demos of Slimline it had previously been doing at Warehouse, and it did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who is likely to win?
Slimline, because Distributer's conduct is a material breach.
SPECIFIC PERFORMANCE
Specific performance, ordered only in cases of land or a unique asset, requires both parties to perform the contract.
FALSE
T/F An injured plaintiff can never recover without a contract.
FALSE
T/F Contract law varies from state to state
TRUE
T/F Many contract lawsuits continue to be decided using common-law principles developed by courts.
FALSE
T/F The vast majority of contracts are unilateral contracts.
TRUE
T/F Today, courts enforce the majority of contracts.
Mr. and Ms. Beard contracted for Builder to construct a house on property he owned and sell it to the Beards for $785,000. The house was to be completed by a certain date, and Builder knew that the Beards were selling their own home in reliance on the completion date. Builder was late with construction, forcing the Beards to spend $32,000 in rent. Ultimately, Builder never finished the house, and the Beards moved elsewhere. They sued. At trial, expert testimony indicated the market value of the house as promised would have been $885,000. How much money are the Beards entitled to, and why?
The Beards' direct damages represent the difference between the market value of the house and the contract price. They expected a house worth $100,000 more than their contract price, and they are entitled to that sum. They also suffered consequential damages. Builder knew they needed the house as of the contract date, and he could foresee that his breach would force them to pay rent. He is liable for a total of $132,000.
John and Susan Verba sold a Vermont lakeshore lot to Shane and Deborah Rancourt for $115,000. The Rancourts intended to build a house on the property, but after preparing the land for construction, they learned that a wetland protection law prevented building near the lake. They sued, seeking rescission of the contract. The trial court concluded that the parties had reached their agreement under a "mutual, but innocent, misunderstanding." The trial judge gave the Verbas a choice: they could rescind the contract and refund the purchase price, or they could give the Rancourts $55,000, the difference between the sales price and the actual market value of the land. The Rancourts appealed. Were the Rancourts entitled to rescission of the contract? Argument for the Rancourts: When the parties have made a mutual mistake about an important factual issue, either party is entitled to rescind the contract. The land is of no use to us and we want our money back. Argument for the Verbas: Both sides were acting in good faith and both sides made an honest mistake. We are willing to acknowledge that the land is worth somewhat less than we all thought, and we are willing to refund $55,000. The buyers shouldn't complain—they are getting the property at about half the original price, and the error was as much their fault as ours.
The Rancourts win, and are entitled to rescission. Both parties clearly intended that the Rancourts would build a house near the lake. They cannot do so. That is a basic error of fact, and the Rancourts get their money back. The judge has no power to reshape the contract to express expectations that neither party ever held.
The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness throughout. They repaired the buckling wall by installing I-beams to support it. They never resolved the leaks and the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. They stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000. Soon afterward, they began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages? Why or why not?
The Silvas are entitled to damages for fraud (saying the I-beams had been added merely for reinforcement) and nondisclosure (not mentioning the problems). The jury awarded $21,000 damages and $15,000 punitive damages, and the state supreme court affirmed the verdict. Silva v. Stevens, 156 Vt. 94, 589 A.2d 852, 1991 Vt. LEXIS 42 (1991).
Ken Ward was an Illinois farmer who worked land owned by his father-in-law, Frank Ruda. To finance his operation, he frequently borrowed money from Watseka First National Bank, paying back the loans with farming profits. But Ward fell deeper and deeper into debt, and Watseka became concerned. When Ward sought additional loans, Watseka insisted that Ruda become a guarantor on all of the outstanding debt, and the father-in-law agreed. The new loans had an acceleration clause, permitting the bank to demand payment of the entire debt if it believed itself "insecure"; that is, at risk of a default. Unfortunately, just as Ward's debts reached more than $120,000, Illinois suffered a severe drought, and Ward's crops failed. Watseka asked Ruda to sell some of the land he owned to pay back part of the indebtedness. Ruda reluctantly agreed but never did so. Meanwhile, Ward decreased his payments to the bank because of the terrible crop. Watseka then "accelerated" the loan, demanding that Ruda pay off the entire debt. Ruda defended by claiming that Watseka's acceleration at such a difficult time was bad faith. Who should win?
The bank won. Good faith in this setting requires that the bank honestly believe itself to be insecure, and that there be some basis for the belief. The bank honestly did consider itself at risk of a default, and the combination of the drought and Ruda's refusal to sell land provided a basis for the belief. Watseka First Natl. Bank v. Ruda, 135 Ill. 2d 140, 552 N.E.2d 775, 1990 Ill. LEXIS 20 (1990).
d. all parties have fulfilled their obligations in an executed contract.
The basic distinction between an executory contract and an executed contract is that a. one is legal, the other is not. b. only one promise is involved in an executory contract. c. one is enforceable, the other is not. d. all parties have fulfilled their obligations in an executed contract.
Shantelle enters into a contract to buy a rare antique car. The seller breaches the contract by refusing to sell the car to Shantelle. What is Shantelle's best argument for obtaining the car?
The car is so rare it is considered an irreplaceable piece of art.
While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip, and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What will result?
The court will apply common law, and Mary will lose
While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip, and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What will result?
The court will apply the UCC, and Mary will lose.
How does a court determine if a party is mentally incompetent?
The court will hear testimony from doctors, therapists and anyone else who might have information about Barrows' mental health
For the past seven years, Sommerset Storage, Inc. has hired Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbatten then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses, and Mountbatten sues. What will result?
The court will uphold the original contract, and Mountbatten will lose
For the past seven years, Sommerset Storage, Inc. has hired Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbatten then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses, and Mountbatten sues. What will result?
The court will uphold the original contract, and Mountbatten will lose.
d. conduct of the parties indicates they intended an agreement
The courts will find an implied contract when a. there is promissory estoppel. b. justice demands it. c. there is undue influence. d. conduct of the parties indicates they intended an agreement
In Hawkins v. McGee, what formula did the court provide for calculating the plaintiff's damages?
The difference between the value of a perfect hand and the value of his hand in its present condition.
Helena shares with her family her two goals for her senior year in college: join a synchronized swim team and shoot a bald eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges Helena to spend the year looking for a job, promising, "If, upon graduation, you have secured a job, have refrained from synchronized swimming, and have not shot any bald eagles, I will give you $10,000." Helena immediately accepts the terms of the agreement and at graduation has met all three criteria, but Anika refuses to pay. What argument will be most helpful for Anika in court?
The element of the agreement about the bald eagle is not enforceable, because shooting bald eagles is illegal.
EXPECTATION
The expectation interest puts the injured party in the position she would have been in had both sides fully performed. It has three components: Direct damages, which flow directly from the contract. Consequential damages, which result from the unique circumstances of the particular injured party. The injured party may recover consequential damages only if the breaching party should have foreseen them. Incidental damages, which are the minor costs an injured party incurs responding to a breach.
Fred slips on some ice on Opal's front steps and shatters both his kneecaps. Opal has a comprehensive homeowner's policy with Riskocity Insurance, but Riskocity refuses to pay for Fred's injuries as the policy does not cover accidents caused by Opal's "dangerous conduct." The Community Rules of Opal's gated community require residents to keep their front steps free of ice. Riskocity contends that because Opal violated the Community Rules, she is liable for Fred's injury. Opal argues that the insurance policy makes no mention of her Community Rules and because she could not foresee Riskocity relying on the Rules, they should not prevent her from recovering. What result?
The insurance contract was ambiguous, so the Community Rules will not prevent Opal from recovering.
In Milicic v. Basketball Marketing Company, Inc., the plaintiff was likely to succeed in his suit because --
The manner in which Milicic withdrew from the contract appeared to be consistent with Pennsylvania law.
Lewis signed a contract for the rights to all timber located on Nine-Mile Mine agreeing to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him from entering the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf for which Lewis had no contradicting evidence. The court granted summary judgment. Why?
The market value evidence shows that Lewis suffered no harm and, therefore, had no claim.
In Hamer v. Sidway, if the court had agreed with the uncle that his promise was not supported by consideration, what would be legal consequence?
The nephew and the uncle would not have an enforcement contract.
Confluence Corporation, located in Champaign, Illinois, decided to begin buying rare earth metal from the Canadian Rare Earth Company, with headquarters in Montreal, Quebec Province. The following clause was included in a signed contract between the companies to purchase quantities of the metal Lanthanum for Confluence's production of rechargeable batteries: "During the Initial Term, Seller shall sell the Products to Buyer at the purchase prices set forth on Exhibit A. All prices are in dollars with no cents. Any adjustment to prices will require written modification signed by both parties within ten (10) business days." A few weeks after signing, the Confluence Corporation attorney calls the Canadian company with a concern about the clause. What do you believe this concern may be?
The prices are in dollars
ETHICS: Commercial Union Insurance Co. (CU) insured Redux, Ltd. The contract made CU liable for fire damage but stated that the insurer would not pay for harm caused by criminal acts of any Redux employees. Fire destroyed Redux's property. CU claimed that the "criminal acts" clause was a condition precedent, but Redux asserted it was a condition subsequent. What difference does it make, and who is legally right? Does the insurance company's position raise any ethical issues? Who drafted the contract? How clear were its terms?
The type of condition determines who must prove the source of the fire. CU claimed that the clause was a condition precedent, meaning that Redux had the burden of proving the fire was not arson. Redux argued that the clause was a condition subsequent, meaning that CU became liable to pay benefits as soon as the fire started, and could escape its duty only if the insurer proved Redux had committed arson. The court agreed with Redux, held that the clause was a condition subsequent, and placed the burden on CU to prove arson. Redux, Ltd. v. Commercial Union Ins. Co., 1995 U.S. Dist. LEXIS 2545 (D. Kan. 1995). The most obvious ethical issues arise around the language of the contract and the sale of the policy. The contract says that the insurer is not liable for harm caused by criminal acts of employees. However, the contract says nothing about who must prove whether the harm was caused by such crimes. Further, it is very unlikely that the insurance agent explained, when selling the policy, that in the event of fire the insured company would have to prove the harm was not caused by employee arson. Some would say, as this court did, that the company is attempting to sneak one by its policyholders, using ambiguous language to help sell the policy, then sandbagging the insured once a loss occurs, claiming a contract interpretation that it had never before mentioned. Many would argue that the company that drafts a contract has an ethical obligation to make its terms clear. It is hard to believe that the insurance company would desire to be treated this way—for example, by reinsurers upon whom it depends.
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.
Reliance damages can be difficult to win because --
They are difficult to quantify.
Did the McAllisters statement about the I-beam make them obligated to say something about the water damage?
They had an obligation to correct anything that was inaccurate
Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation?
This is a material breach. Jackie owes nothing to Charles
Angelo and Yvette were injured in an automobile accident allegedly caused by a vehicle belonging to Truck Equipment of Boston. Quagmire Insurance Co. paid insurance benefits to Angelo and Yvette, who then assigned to Quagmire their claims against Truck Equipment. Quagmire sued Truck Equipment, which moved to dismiss. Who wins?
Truck Equipment wins because a claim for personal injury cannot be assigned.
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
A promise to act or forbear in the future counts as consideration.
True
A property owner hires a contractor to renovate a building, which both believe does not have asbestos, a hazardous material. After beginning the project the developer discovers asbestos in the walls. A subsequent agreement that the property owner will pay additional money to the contractor for asbestos removal is enforceable.
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
In general, an offeror can revoke an offer any time before it has been accepted.
True
Pursuant to the UCC, a creditor who cashes a check on which a debtor has written "full settlement" generally loses the right to claim any more money from the debtor.
True
T/F Carswell, a contractor, enters into a contract with Helen, a homeowner, to remodel her bathroom. The contract provides a specific completion date. The contract provides that if Carswell does not have the job finished by the date, Helen may deduct $200 per day from the contract price until the job is finished. This is an example of liquidated damages.
True
T/F Ernest operates an ice cream stand during the months of May, June, July, and August. Ernest's ice cream machine is broken and needs a new part to run. He contracts to have the part shipped to him by special carrier. Ernest emphasizes that the part needs to be delivered by April 25 and the carrier agrees, knowing that Ernest intends to open his stand May 1. If the shipper fails to deliver the part on April 25, Ernest will be able to recover consequential damages caused by the delay.
True
T/F Most courts hold that a seller of goods is NOT entitled to consequential damages.
True
T/F Punitive damages are generally not available in contracts cases.
True
T/F Restitution means giving back.
True
T/F Specific performance is always available in real estate contracts.
True
T/F The Milicic v. Basketball Marketing Company, Inc. case illustrated the proper use of a preliminary injunction.
True
T/F To win expectation damages, the injured party must prove the breach of contract caused damages that can be quantified with reasonable certainty.
True
The law assumes that an auction is with reserve unless the auctioneer clearly states otherwise.
True
To form a contract, there must be a meeting of the minds.
True
To validly accept an offer, a party must agree to the terms unconditionally.
True
Lenny makes K2, a synthetic form of marijuana, in his basement. He signs an agreement with the Super Smoke Shop to deliver 1,000 cans of K2 for $10,000. After the contract is signed, but before the delivery, Super Smoke Shop's state legislature makes the sale of K2 illegal. Lenny's contract will be discharged because of _____.
True impossibility
IMPOSSIBILITY
True impossibility means that some event has made it impossible to perform an agreement. It is typically caused by destruction of the subject matter, the death of an essential promisor, or intervening illegality.
Richard Griffin and three other men owned a grain company, called Bearhouse, Inc., which needed to borrow money. First National Bank was willing to loan $490,000, but it insisted that the four men sign personal guarantees on the loan, committing themselves to repaying up to 25 percent of the loan each if Bearhouse defaulted. Bearhouse went bankrupt. The bank was able to collect some of its money from Bearhouse's assets, but it sued Griffin for the balance. At trial, Griffin wanted to testify that before he signed his guaranty, a bank officer assured him that he would only owe 25 percent of whatever balance was unpaid, not 25 percent of the total loan. How will the court decide whether Griffin is entitled to testify about the conversation?
Under the parol evidence rule, if the parties intended the guaranty to be integrated, which they almost certainly did, Griffin may testify only if the writing is ambiguous or incomplete. The state supreme court ruled that the document was complete and unambiguous, and Griffin owed the entire remaining balance. First National Bank v. Griffin, 310 Ark. 164, 832 S.W.2d 816, 1992 Ark. LEXIS 439 (1992).
What are the requirements for accord and satisfaction?
Unliquidated debt Debtor pays the agreed upon amount Creditor agrees to accept as full payment a sum less than the amount creditor claims
On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct?
Until January 16, the contract was executory
(ch 11) While negotiating with Stewart to purchase his house, Yasmine asks him about the condition of the roof. "Excellent," he replies. "It is only 2 years old, and should last 25 more." In fact, Stewart knows that the roof is 26 years old and has had a series of leaks. The parties sign a sales contract for $600,000. A week before Yasmine is to pay for the house and take possession, she discovers the leaks and learns that a new roof will cost $35,000. What kind of contract exists between Yasmine and Stewart?
Voidable by Yasmine
While negotiating with Stewart to purchase his house, Yasmine asks him about the condition of the roof. "Excellent," he replies. "It is only 2 years old, and should last 25 more." In fact, Stewart knows that the roof is 26 years old and has had a series of leaks. The parties sign a sales contract for $600,000. A week before Yasmine is to pay for the house and take possession, she discovers the leaks and learns that a new roof will cost $35,000. What kind of contract exists between Yasmine and Stewart?
Voidable by Yasmine
b. Matt would win; this is an implied contract
Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the tooth. If Walter refused to pay and Matt sued, a. Walter would win because of the UCC. b. Matt would win; this is an implied contract. c. Matt would win in quantum meruit. d. Walter would win as there was no contract.
Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250?
Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed.
While visiting Sarah's art gallery, Mark spots what he believes is an original painting by the artist Vincent Van Gogh and agrees to buy the painting from Sarah for $1,000,000. Upon returning home, Mark has the painting appraised and learns that it is not a Van Gogh and is worth only $100,000. Mark sends Sarah a letter saying that he bought the painting under false pretenses and will pay only the fair market value of the painting, enclosing a check for $100,000 with "payment in full" written in the memo line. Before depositing the check, Sarah crosses out Mark's note and writes "first partial payment" over it. The next day Sarah learns that Mark's check has bounced. If Sarah sues Mark, will the court find in her favor?
Yes, as there was no satisfaction of the debt because Mark's check bounced.
Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise?
Yes, because Ruben relied on the promise.
For seven years, Stanford Owens has run a successful practice that helps small businesses file their taxes, become incorporated, and perform other legal tasks. Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx, almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's services. A month later, Stanford is more familiar with the local business landscape and realizes that most people offering his services in NYC charge around $13,000 for six months of work because of the higher costs to do business in NYC. Is the deal between Stanford and DiggyWerx enforceable?
Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment.
Lucian has every reason to believe the new pizza shop he is opening will be a success, but he also has a lot riding on it. He has borrowed a significant amount and has refinanced his house to pay for the expenses of starting up. If the business does not succeed, it will be a disaster for his family. Fortunately, the construction and start up of the business will be pretty simple, and he is hiring his sister Allegra (an experienced contractor), to do most of the work. Should Lucian and Allegra put their contract in writing?
Yes, because it is essential to the success of Lucian's business that construction goes smoothly
Lucian has every reason to believe the new pizza shop he is opening will be a success, but he also has a lot riding on it. He has borrowed a significant amount and has refinanced his house to pay for the expenses of starting up. If the business does not succeed, it will be a disaster for his family. Fortunately, the construction and start up of the business will be pretty simple, and he is hiring his sister Allegra (an experienced contractor) to do most of the work. Should Lucian and Allegra put their contract in writing?
Yes, because it is essential to the success of Lucian's business that construction goes smoothly.
Fritz's Pet Shop has a contract with PlanetLazy Pet Products that states: a) PlanetLazy will deliver to Fritz 25 pet beds on the second Saturday of every month for one year; b) Fritz will pay PlanetLazy $2,500 on the first day of each month for one year. If Fritz does not pay PlanetLazy on a given month, is PlanetLazy still obligated to continue delivering pet beds?
Yes, because the terms are reciprocal promises.
The Tufte family leased a 260-acre farm from the Travelers, Inc. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes' house on March 30 and stated that they had until April 14 to accept. On April 13, the Tuftes signed and mailed their acceptance, which Travelers received on April 19. Travelers claimed there was no lease and attempted to evict the Tuftes from the farm. May the Tuftes stay?
Yes, because under the mailbox rule, an acceptance is generally effective when mailed.
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
The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness. They repaired the buckling wall by installing I-beams to support it, but never resolved the leaks or the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. If asked, they stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000 and immediately began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages?
Yes, the Silvas are entitled to damages for both fraud and nondisclosure.
(ch 11) Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get out of the contract. Samuel argues that because Riley is a minor, the contract is void. If Riley wants to enforce the contract, will he be able to?
Yes, the contract is voidable and only Riley can cancel it.
Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get out of the contract. Samuel argues that because Riley is a minor, the contract is void. If Riley wants to enforce the contract, will he be able to?
Yes, the contract is voidable, and only Riley can cancel it.
Xuechen graduated from culinary school at the top of her class, and signed an employment contract to work as a chef for one of Chicago's best restaurants for a period of three years. Additionally, Xuechen signed a non-competition agreement that stated she agreed not work as a chef for any other restaurant in the Chicago city area for a period of five years. Shortly after she began working, Xuechen left her employer to work as a manager at another Chicago restaurant. Has Xuechen breached either of the contracts she signed?
Yes, the employment contract has been breached, but the non-competition agreement has not been breached.
Morell bought a security guard business from Conley, including the property on which the business was located. Neither party knew that underground storage tanks were leaking and contaminating the property. After the sale, Morell discovered the tanks and sought to rescind the contract. Should he be allowed to do so?
Yes. There was no fraud or misrepresentation because Conley knew nothing of the tanks. But there is mutual mistake: The parties were both in error about an important factual assumption—namely, the ground's condition. Morell was permitted to rescind. Morell v. Conley Detective and Security Guard Agency, Inc., Michigan Lawyers Weekly, No. 18079, Nov. 28, 1994 (Mich. Ct. App. 1994).
(ch 11) The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red Owl Stores, told them that for $18,000 Red Owl would build a store and fully stock it for them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl was to build the store. Lukowitz then told the Hoffmans that the price had gone up to $26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans sued. The court determined that there was no contract. Can the Hoffmans recover any money?
Yes. They can most likely recover damages based on promissory estoppel.
The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red Owl Stores, told them that for $18,000 Red Owl would build a store and fully stock it for them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl was to build the store. Lukowitz then told the Hoffmans that the price had gone up to $26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans sued. The court determined that there was no contract. Can the Hoffmans recover any money?
Yes. They can most likely recover damages based on promissory estoppel.
Stephan and his boss agree to extend his employment contract by an additional six months. The employment contract states that all amendments must be in writing, so Stephan and his boss cross out and change the provision in his contract that covers the duration of his employment and rewrite it to include the additional six months. They each initial and date the change and they each keep a copy of the agreement. Is the amendment valid?
Yes. This is a valid way to execute a written amendment
Stephan and his boss agree to extend his employment contract by an additional six months. The employment contract states that all amendments must be in writing, so Stephan and his boss cross out and change the provision in his contract that covers the duration of his employment and rewrite it to include the additional six months. They each initial and date the change, and they each keep a copy of the agreement. Is the amendment valid?
Yes. This is a valid way to execute a written amendment.
Which of the following promises ordinarily must be fully executed in writing to be enforceable? a. a promise made by an executor of an estate to pay a debt of the estate b. an agreement between two parties to sell a piece of jewelry for $350 c. any sale of goods to a minor d. a six-month lease on an apartment beginning in 30 days
a
Which of the following statements is accurate regarding a condition?
a condition is an event that must occur before a party becomes obligated under a contract
Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is:
a condition precedent
Unilateral Contract
a contract in which one party makes a promise that the other party can accept only by actually doing something
Odessa is a mechanic at Bob's Autobody, and she repeatedly tells her friend Frank that if she ever becomes a manager she will hire Frank as a mechanic. Frank wants to get the deal in writing. What kind of contract will he draft?
a contract with a condition precedent
Select the parties below who might be required to make restitution if they rescind a deal: a. A minor b. A person with a brain injury c. A person who has was declared mentally incompetent by a judge several years ago d. An extremely intoxicated person e. Someone who ratifies a contract he made as a minor f. A minor who enters into a contract for medical care
a. A minor b. A person with a brain injury
When Alistair drops off his tuxedo at Whett Dry Cleaners for dry-cleaning, he signs Whett's standard exculpatory clause, which releases Whett from all liability in the event that any item of clothing is damaged, lost, or stolen while in its care. When Alistair returns to pick up his tuxedo, he is informed that the garment tore during the dry cleaning process. Alistair sues. Which of the following results is most likely?
a. Alistair loses because this is a valid exculpatory clause.
Desmond has been a fan of Crispin's paintings for years and is thrilled when the artist promises to give him painting lessons. The two agree that Crispin will provide Desmond with five weekly lessons for $1,000 each, payable once the lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. What result?
a. Crispin's estate will be able to recover $2,000 in restitution.
Which of the following are situations in which silence amounts to a misrepresentation? a. If there is a relationship of trust between the parties b. If the other party was relying on a mistaken assumption about a writing c. If the other party was relying on a basic mistaken assumption d. If the defendant previously made an incorrect assertion e. If the contract involves the sale of goods f. If the other party failed to investigate an issue
a. If there is a relationship of trust between the parties b. If the other party was relying on a mistaken assumption about a writing c. If the other party was relying on a basic mistaken assumption d. If the defendant previously made an incorrect assertion
Which of the following is the MOST accurate statement regarding economic duress? a. It may be grounds for rescission. b. It is never grounds for rescission. c. It is a UCC concept only. d. It is always grounds for rescission.
a. It may be grounds for rescission.
Which of the following are items that courts consider necessaries? a. Medical care b. Food c. Automobiles d. Tuition e. Summer camp f. Recreational travel g. Clothing h. Video games i. Legal advice j. Housing
a. Medical care b. Food c. Automobiles d. Tuition g. Clothing i. Legal advice j. Housing
Rothman's clothing store had a 20-year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's?
a. No, based upon the "good faith" requirement.
Mallory hires Raghav to work for one year as an assistant manager at $5,500 per month, reserving the right to cancel the contract at any time. After two months, Mallory fires Raghav because the company's order volume drops. Can Raghav recover payment for the remaining 10 months on the contract?
a. No, because both parties are not bound by the contract.
Annisa, owner of the party planning company Palacial Parties, Inc., is hired by Jerard to organize a spectacular celebration for his girlfriend Amber. Amber was just named winner of the national vocal competition "America Sings," and is arriving home in less than 24 hours. Jerard asks Annisa to hire Jack Flash, Amber's favorite vocal artist, to give a concert on the night of the party. Annisa works very hard trying to get the event together with such short notice, but is unable to get in touch with Jack Flash, who was traveling in Antarctica. The day of the party, there is no entertainment to welcome Amber home, and Jerard files a breach of contract suit against Annisa's company the next day. Jerard also calls Jack Flash and tells him about the missed opportunity; Jack Flash quickly joins the suit against Palacial Parties. Does Jack have a claim for breach of contract against Annisa?
a. No, because he is an incidental beneficiary.
Omkara, a furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A day before Gnome is going to ship the foam to Omkara, a flood destroys its entire inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that FirmFoam can supply her with an identical shipment for $65,000. This increase in price will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara wants to get out of both contracts. Can she?
a. Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform.
Marco, acting in good faith, sells $1,000 of fishing equipment to Celine, a 25 year old woman who is mentally handicapped, and $1,000 of fishing equipment to Paul, a 16 year old. Paul and Celine both throw out their fishing equipment after one use and then disaffirm their respective deals. Assume their jurisdiction follows the majority approach. What result? a. Paul can rescind his deal but Celine cannot. b. Celine and Paul can both rescind their deals. c. Celine can rescind her deal but Paul cannot. d. Neither Paul nor Celine can rescind their deal.
a. Paul can rescind his deal but Celine cannot.
Richard and Michelle Kommit live in California, where gambling on credit is illegal. They travel to New Jersey, where they used their credit card to withdraw cash from an ATM conveniently located in the "pit"— the gambling area of a casino. They ran up debts of $5,500 and did not pay. The California National Bank (the issuer of the credit card) sued for the money in a California court. Who wins?
a. Richard and Michelle Kommit
Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials, and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome?
a. Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.
Silas has agreed to dig five wells on Noreen's property over the next month, working each weekday. One Friday, after Silas has completed three wells for Noreen, he informs Noreen that on Monday he is going to start a project digging sixty wells for Romeo and that job will take him about a year. What does this mean for Noreen?
a. Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract.
Envirotex owes Simla Inc. $1,200 for services rendered. An Envirotex corporate officer calls Simla's Chief Operating Officer (COO) and offers to settle the debt by assigning to Simla the right to payment of a $1,500 debt that Riann Corp. owes to Envirotex for its purchase of Envirotex merchandise. Simla's COO agrees to the deal and cancels Envirotex's debt. Riann never pays anyone, and Simla sues Riann. What will result?
a. The assignment is not valid because it was not in writing.
Which of the following is NOT a true statement about fraud? a. The plaintiff must show that although the defendant acted in good faith, the statement was material because the defendant expected the plaintiff to rely on it and enter into the contract. b. The defendant made the statement with the intent to induce the plaintiff to enter into the contract. c. The plaintiff must prove that the defendant has knowledge of the falsity of his or her statement. d. It is necessary for the plaintiff to show that he or she has suffered some type of detriment or injury because of his or her reasonable reliance on the defendant's false statement.
a. The plaintiff must show that although the defendant acted in good faith, the statement was material because the defendant expected the plaintiff to rely on it and enter into the contract.
While visiting Sarah's art gallery, Mark spots what he believes is an original painting by the artist Vincent van Gogh and agrees to buy the painting from Sarah for $1,000,000. Upon returning home, Mark has the painting appraised and learns that it is not a Van Gogh and is worth only $100,000. Mark sends Sarah a letter saying that he bought the painting under false pretenses and will pay only the fair market value of the painting, enclosing a check for $100,000 with "payment in full" written in the memo line. Before depositing the check, Sarah crosses out Mark's note and writes "first partial payment" over it. The next day Sarah learns that Mark's check has bounced. If Sarah sues Mark, will the court find in her favor?
a. Yes, as there was no satisfaction of the debt because Mark's check bounced.
Duress occurs when a. an improper threat is made to force another party to enter into a contract. b. both parties contract based on the same factual error. c. a party gives notice of refusal to be bound by an agreement. d. the enforcement of a contract results in unconscionability.
a. an improper threat is made to force another party to enter into a contract.
Ryan, a minor, contracted to sell his auto to Ed, a 28-year-old. Ryan later refused to complete the sale. If Ed sues to enforce the contract, Ed will a. lose, because the contract is voidable by Ryan. b. win because Ryan was the seller. c. win because minors can only avoid contracts for the sale of land. d. lose, as the contract is void.
a. lose, because the contract is voidable by Ryan.
In Unite Here Local 30 v. California Department of Parks and Recreation, the California Court of Appeals decided whether Bridgette Browning and the members of Unite Here Local 30 were third-party beneficiaries of the concession contract between the California Department of Parks and Recreation (DPR) and Delaware North Companies (DNC). The court held that:
a. neither Bridgette Browning nor Local 30 were a third-party beneficiaries because the concession contract did not intend to benefit either of them.
The court in Hamer v. Sidway found for the below optoins. a. nephew because he had refrained from engaging in certain lawful actions. b. nephew because the actions that the nephew refrained from were especially valuable and enjoyable for the nephew. c. uncle because the nephew had already received the benefit of an improved quality of life by not drinking, smoking, or gambling. d. uncle because the nephew could not demonstrate that he had been harmed by refraining from drinking, smoking, or gambling.
a. nephew because he had refrained from engaging in certain lawful actions.
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.
Monty buys a big screen television from Martha and agrees to pay her back with interest over the next three years. A year later, Monty decides to stop watching TV and gives the TV to his friend Bo, assigning all his rights and delegating all his duties to Bo. Bo pays Martha for a few months and then stops, so she sues both Monty and Bo. Monty will be able to avoid liability if he can prove:
a. that Martha granted a novation.
Chandly forbears if he _______________.
agrees not to do something he had a legal right to do
offer
all contracts begin when a person or a company proposes a deal, but only proposals made in certain ways amount to a legally recognized offer
When a contract falls within the Statute of Frauds but is not in writing, the contract is a. illegal. b. unenforceable. c. voidable. d. void.
b
John sold a Vermont lakeshore lot for $115,000 to Deborah who intended to build a house on the property. John indicated the land was suitable for the project, but Deborah soon learned that a wetland protection law prevented building near the lake. Deborah sued, seeking rescission of the contract. What is the likely outcome?
b. Deborah will likely win restitution damages.
Which of the following, if proven, will establish unilateral mistake when combined with the fact that a party relied upon a basic factual error when entering into the contract? a. The non-mistaken party induced the other party to enter into the contract b. Enforcing the contract would be unconscionable c. The mistake is mathematical or mechanical alone d. The mistake was not caused by the plaintiff's negligence e. The non-mistaken party knew or had reason to know of the error
b. Enforcing the contract would be unconscionable c. The mistake is mathematical or mechanical alone e. The non-mistaken party knew or had reason to know of the error
Harlowe purchases a watercolor painting by a prominent local artist and a RecumbentSloth brand recliner from a yard sale. She pays cash for both items, and the seller promises to deliver them next week. Two days later the seller calls Harlowe and says he no longer wants to sell the items and sends Harlowe back her money. If Harlowe sues, will she be able to get the items she bought?
b. Harlowe will be able to get the painting but not the chair.
Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule.
b. Krug wins because of true impossibility.
Thirty-five members of the Ortiz extended family were spread across three states—Illinois, New York and Florida—and they rarely were able to get everyone together. For Thanksgiving 2018, Mary Elizabeth Ortiz decided to surprise her family by booking a mountain retreat for the entire clan. She especially wanted to celebrate her uncle's return from overseas military service. On September 15, 2018, Mary rented a spectacular lodge in the Tennessee Smoky Mountains with over 20 bedrooms and an incredible view, paying in advance the full $2,500 per night fee for 3 evenings, but not purchasing travel insurance. The lodge had the following cancellation policy: "A sixty (60) day notice is required for cancellation. Cancellations that are made within 60 days of the arrival date, for any reason, forfeit the full advance payment and reservation deposit. You are advised to purchase travel insurance separately if cancellation costs are a concern." The rental contract also stated that the only exception would be for "acts of God, such as fires or earthquakes." One week before Thanksgiving, Mary's uncle had a heart attack and was hospitalized. The next day, November 16, 2018, Mary cancelled the reservation, and requested a full refund, which the lodge refused to provide. Does Mary have a claim for the return of her $7,500?
b. No, Mary has no theory that supports her claim.
After going through her old clothes, Farra asks her friend Michelle if she would like to buy any of them, stating she is hoping to get at least $50. Michelle responds that she will pay $5 for each piece that she would like to buy. The next day, Michelle tells Farra that she does not want any of the clothes. Has Michelle violated the agreement with Farra?
b. No, because of Michelle's illusory promise, she and Farra did not have an enforceable agreement.
Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports car after Ted replaces the engine and fixes the transmission. The contract contains a "time is of the essence" clause, requiring Ted to have the car ready for the sale by February 13. On February 12, Ted calls Aisha and says he needs two more days to complete the repairs. Aisha declines and buys another car. Did Aisha breach the contract?
b. No, because the contract contained a "time is of the essence" clause.
Rudolph hired Moe to walk his dog every weekday. Rudolph hands Moe a check for a month of excellent work. "Thanks!" says Moe. "This will help me pay for the silly citation I just got from the city, since I never licensed my dog walking business. They make us get licenses just to raise money for the city! What a scam." When Rudolph learns that Moe's business is unlicensed, he refuses to pay. What will result?
b. Rudolph owes Moe money because the licensing issue is irrelevant to their agreement.
Zazzles Jewelry sells Chic Boutique 150 necklaces. Zazzles sues when Chic defaults on its payments, and the court finds that some of the repayment terms in the contract are unconscionable because they place undue burdens on Chic. Zazzles is willing to make the repayment terms more favorable to Chic but wants the rest of the contract enforced. What is likely to occur?
b. The contract is governed by the UCC, so the court may choose to enforce the remainder of the contract.
Anna worries that her brother Nick does not have good health insurance, so she writes a contract stating that if he mows her lawn on the last Saturday of every month she will buy him an expensive insurance policy that he could not otherwise afford "for at least the next six months, and longer if necessary." The next week, Nick gets a great job at an investment bank, which provides him health insurance coverage. Anna congratulates Nick and revokes the deal. The breach of contract infuriates Nick, who sues his sister. What will result?
b. The court will award Nick nominal damages.
Which of the following must a plaintiff show in order to prove that a defendant's misrepresentation amounted to fraud? a. The plaintiff suffered serious harm as a result of the defendant's statement b. The plaintiff justifiably relied on the statement c. The defendant knew the statement was false or made the statement recklessly d. The statement was material e. The defendant knew the plaintiff would rely on the statement
b. The plaintiff justifiably relied on the statement c. The defendant knew the statement was false or made the statement recklessly d. The statement was material
When Tremaine arrived in Cincinnati, he rented an SUV from a car rental company in the airport terminal. A month after the trip, he noticed that the charge on his credit card for the SUV was much higher than he anticipated because the rental company had charged him $30 per gallon to refill the gas tank. He reviewed the eleven-page rental contract and noticed on page seven a provision about the gas charge. He saw another provision on page ten stating that in order to file a dispute with the company he would be charged a $750 "Investigation Fee" for his claim to be reviewed. Tremaine sues the rental company. Which of the following outcomes is most likely?
b. Tremaine will win because the contract was procedurally and substantively unconscionable.
For seven years, Stanford Owens has run a successful practice that helps small businesses file their taxes, become incorporated, and perform other legal tasks. Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx, almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's services. A month later, Stanford is more familiar with the local business landscape and realizes that most people offering his services in NYC charge around $13,000 for six months of work because of the higher costs to do business in NYC. Is the deal between Stanford and DiggyWerx enforceable?
b. Yes, because Stanford and DiggyWerx each receive a benefit and incur a detriment.
Raven works as a senior computer programmer for a national engineering firm. Periodically the firm "rents" Raven out to other companies to solve their programming problems at the cost of $10,000 per day plus expenses. Raven has garnered an international reputation as a human "supercomputer" and her schedule is booked for nearly six months into the future. When multiple companies ask to schedule Raven for the same week, the firm delegates one of the jobs to another programmer, MinJoo. While MinJoo is also a very capable programmer, it generally takes her 3-4 days to complete a project that would only take Raven 1 day to finish. The firm sends MinJoo to the requesting company in Denmark, and the problem is resolved in 3 days at a total cost of $30,000, plus expenses. When the company discovers that MinJoo is not the legendary "supercomputer" they expected, they bring a claim against the firm. Does the company have a valid cause of action in this case?
b. Yes, because the company expected Raven.
As the court's holding in Henches v. Taylor demonstrates, a creditor who alters a debtors "full payment" or similar notation on a check before depositing the check a. prevents accord and satisfaction. b. does not prevent accord and satisfaction and loses his right to recover any more money from the debtor. c. is liable for fraud. d. may collect the remainder of the outstanding debt from the debtor only if the creditor files suit within 30 days of the depositing the check.
b. does not prevent accord and satisfaction and loses his right to recover any more money from the debtor.
Sarah, a fashion designer, enters into an output contract with a department store under which the department store will pay Sarah $100 per dress for one year. Six months later, a local boutique offers to pay Sarah $150 per dress. Sarah may a. sell a portion of her dresses to the boutique as long as she continues to meet the department store's demands. b. not sell to the boutique because, pursuant to the output contract, Sarah must sell 100 percent of her dresses to the department store. c. increase the price per dress under the output contract to $150 per dress.
b. not sell to the boutique because, pursuant to the output contract, Sarah must sell 100 percent of her dresses to the department store.
4. If Central Maine Power does not pay Motel Services, what is Motel Services' strongest legal claim?
breach of the unilateral contract
what must motel services do to accept the promotional offer?
building new housing heated with electricity
The Statute of Frauds was drafted originally _________, who later repealed it. Today, ________ entirely repealed its Statute of Frauds.
by Parliament no state has
Connie orally offered Chris a job and stated that she would like Chris to work for her for six months. Based upon your reading in Browning, does this agreement have to be in writing to be enforceable? a. No. Employment agreements never have to be in writing to be enforceable. b. Yes. The contract terms are for six months and by definition this contact falls under the statute of frauds and must be in writing to be enforceable. c. No. Because Chris could perform this contract in under one year by the terms of the contract and therefore no writing is required under the statute of frauds. d. Yes. All agreements for employment must be in writing to be enforceable.
c
Connie orally offered Chris a job and stated that she would like Chris to work for her indefinitely. Based upon your reading in Browning, does this agreement have to be in writing to be enforceable? a. Yes. All agreements for employment must be in writing to be enforceable. b. Yes. The contract terms are indefinite and by definition this contact falls under the statute of frauds and must be in writing to be enforceable. c. No, because Chris could perform this contract in under one year. Therefore, no writing is required under the statute of frauds. d. No. Employment agreements never have to be in writing to be enforceable.
c
Pamela was injured in an auto accident by an uninsured driver. Pamela filed a claim with her insurer, American Mutual, for $2,000 under her "uninsured motorist" coverage. American Mutual told her that if she sought that money, her premiums would go "sky high," so Pamela dropped the claim. Later, after speaking with an attorney, Pamela sued. What claim was her attorney likely to make?
c. A claim for punitive damages.
Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is:
c. A condition precedent.
American Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of gasoline, the company was interested in converting the trucks to propane fuel. It signed a requirements contract with Empire Gas, in which Empire would convert "approximately 3,000" trucks to propane fuel upon American Bakeries' potential request, and would then sell American Bakeries all required propane fuel to run the converted trucks. American Bakeries never requested a single conversion. Empire sued for lost profits. Who wins?
c. American Bakeries wins because this was a requirements contract which does not require any purchase from Empire.
Walter runs a small museum that displays antique VW busses. Shane sells Walter a VW bus, telling him it has a brand new engine and will run well for another few years. Walter finds out that the engine is 15 years old, but is not permitted to rescind the contract. Why not? a. Because Walter and Shane do not have a close relationship. b. Because Shane's statements were not material. c. Because Walter did not rely on Shane's statements. d. Because Shane's statements were puffery.
c. Because Walter did not rely on Shane's statements.
Which of the following terms designates the legal ability of a party to enter into a contract? a. Materiality b. Consent c. Capacity d. Affirmation
c. Capacity
KwikKash is a payday loan company that gives cash to borrowers for a large fee. KwikKash recently loaned Claudette $1,000 and required that she pay back $1,500 within 30 days. Claudette fails to repay the loan, and KwikKash sues. What is the most likely result?
c. Claudette will win because the loan violates usury laws.
After his niece's college graduation, Dalton gives her a card that reads, "Congratulations to my dear Diana! To start you on your road to success, I am assigning you my fixed annuity payments from Hedgehog Bank. Love, Uncle Dalton." Dalton's tax advisor is not pleased to hear this, so Dalton calls Diana to revoke the assignment. Diana sues. What is the most likely result?
c. Dalton's assignment was in writing, so it cannot be revoked.
A century and a half ago, an English judge stated: "All painters do not paint portraits like Sir Joshua Reynolds, nor landscapes like Claude Lorraine, nor do all writers write dramas like Shakespeare or fiction like Dickens. Rare genius and extraordinary skill are not transferable." What legal doctrine is the judge describing?
c. Delegation of duties: substantial interest in personal performance
Over her objections, Carlene's husband Silvio borrows $10,000 from his friend Evan so that he can achieve his dream of swimming with great white sharks in South Africa. Carlene knows Silvio has a reputation for being reckless, but she still finds it pretty alarming that Evan and Silvio's friend Constantine and Silvio's business partner Persephone each take out a life insurance policy on Silvio a month before his trip. Who can legally have an insurance policy on Silvio?
c. Evan, Persephone and Carlene.
Hector is outraged by the Ellsworth Elementary School charity auction when the school invalidates his winning bid on a trip to Paris, refunds his money, and refuses to give him the plane tickets he won. He suffers no real harm because a group of sympathetic parents pool their money and buy him a comparable trip, but the breach by the school still stings, so he sues. What result is most likely?
c. Hector will win nominal damages.
CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split its assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities, and a bottom line of $35,235.67, with half due to each partner. Hylton questioned the accounting and asked to see the books. Meztista did not permit Hylton to see any records and refused to answer her phone calls. Instead, he gave her a check in the amount of $17,617.83, on which he wrote "Final payment/payment in full." Hylton cashed the check, but she wrote on it, "Under protest—cashing this check does not constitute my acceptance of this amount as payment in full." Hylton then filed suit, demanding additional monies. Meztista defended on the grounds that the parties had made an accord and satisfaction. What is the likely result?
c. Hylton's debt is discharged because there has been an accord and satisfaction.
Oceanview Enterprises offers scenic cruises to exotic destinations in the South Pacific, such as Tahiti and the Marshall Islands. In December of each year, the cruise line provides customers an opportunity to enter a lottery for a limited number of exclusive tickets sailing to a "hidden" unnamed island. Malik is fortunate enough to win the right to buy two of the expensive cruise tickets for herself and best friend Jecala. When she receives the purchased tickets through the mail, Malik notices the back of each has the following statement: "The purchaser and/or passenger of this ticket agrees that any claim against Oceanview Enterprises or its employees will only be resolved in courts of Oceanview's home state of Alaska. This ticket is non-refundable." Is it likely the clause on the ticket would be enforceable against Malik?
c. No, because Malik did not have notice of the clause before the ticket purchase.
Honeybrook Pies and Elsie's Bakery enter into a contract in which Honeybrook will deliver 25 rhubarb pies to Elsie's each week for six months. The next week, Elsie assigns its rights with Honeybrook to Namaste Restaurant, a neighboring café, as part of a new contract. Namaste informs Honeybrook that it only serves food that is both vegan and gluten free, so the rhubarb pies will have to be made differently. Honeybrook has never used vegan or gluten free ingredients and to purchase them and find a new recipe would be extremely expensive. Can Elsie's assign the contract to Namaste?
c. No, because it would substantially change the obligor's position.
Damon contracts with Steve Redmont of Redmont Roofers, Inc. to replace the roof on his 1850 Greek Revival mansion in Ohio by April 15. The project involves cutting and shaping intricate trim pieces all along the roofline, as well as replacing the slate shingles and underlying wood support system. Steve begins to get frustrated on April 2 because the project is taking too long, so at about the halfway point, he calls Damon and says he won't finish the project. Damon sues Steve in court and asks specific performance. Will the court likely grant this remedy to Damon?
c. No, because specific performance is not an appropriate.
Nationwide Discount Furniture hired Rampart Security to install a fire alarm in its warehouse that would notify Rampart and Nationwide in the event of a fire. Rampart failed to notify Nationwide when a fire did in fact break out. The fire spread next door and damaged a building owned by Gasket Materials Corp. Gasket sued Rampart for breach of contract, and Rampart moved for summary judgment. How will the court likely rule?
c. Rampart's motion for summary judgment is granted because Gasket is an incidental beneficiary.
Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result?
c. Rashard will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.
Ron, a minor, goes to the hospital for treatment of the flu. On the new-patient form Ron signs, he agrees to pay for any care or treatment he receives. When billed for the treatment a. Ron must pay for the benefit he received because he ratified the contract. b. Ron does not have to pay for the benefit he received. c. Ron must pay for the value of the benefit he received, because medical care is a necessary. d. Ron must pay for the benefit he received because the contract is fully executory.
c. Ron must pay for the value of the benefit he received, because medical care is a necessary.
Over spring break, you go to Florida and accidentally spend too much on your checking account's debit card. When you get back to school, you are shocked to see you owe your bank $220, which you pay back immediately. However, you have not even had time to recover from your sunburn before the bank informs you that, pursuant to the liquidated damages clause in the contract you signed when you opened the account, you are being charged a $55 "overdraft fee" for every transaction you made on your debit card after your balance was $0. Unfortunately, you made nine such transactions, which means you owe the bank an additional $495 in fees (9 x $55 = $495). What is your best argument against the overdraft fees?
c. The fee is too high, and the bank is simply imposing a penalty.
In March, Louisa's Hamburger Stand contracts with HydrationCorp to buy 100 bottles of lemonade for $100 and an additional 100 bottles of lemonade for $115 on May 1. After the purchase and delivery of the 100 lemonades in March, Louisa speaks with a HydrationCorp representative, and they agree that on May 1 HydrationCorp will instead sell Louisa 100 bottles of iced tea for $115. What will result?
c. The new terms may be binding because an oral modification may be binding under the UCC.
Angelo and Yvette were injured in an automobile accident allegedly caused by a vehicle belonging to Truck Equipment of Boston. Quagmire Insurance Co. paid insurance benefits to Angelo and Yvette, who then assigned to Quagmire their claims against Truck Equipment. Quagmire sued Truck Equipment, which moved to dismiss. Who wins?
c. Truck Equipment wins because a claim for personal injury cannot be assigned.
Vince has begun forgetting things and is becoming very difficult to get along with. He is 85, has been ill, and is very fond of his housekeeper Annie. He gives a deed to Annie for all of his real property. At Vince's death, his children, who got only his photograph albums according to the will, ask that the deed be set aside and the land be put back in the estate for purposes of division among all the children. What will be the probable result in this case? a. Clearly Annie used her position of dominance to persuade Vince to deed her the property, and it will be set aside. b. Annie will not be able to keep the property since she is not a family member. c. Unless the children can prove that Vince was unable to understand what he was doing, or that Annie used her position to improperly influence Vince, Annie can keep the property. d. Since Vince was 85 he was probably incompetent and the court would rule for the children.
c. Unless the children can prove that Vince was unable to understand what he was doing, or that Annie used her position to improperly influence Vince, Annie can keep the property.
Vinita is preparing to put her house on the market. She knows that some of the insulation in the house contains asbestos. When the house was built, asbestos was commonly used in insulation, but it is no longer allowed today, because we now know that when asbestos is disturbed it can create a very serious health hazard. The asbestos is unlikely to be discovered unless it is inspected by a professional. Must Vinita tell potential buyers about the presence of asbestos in the house? a. Yes, because the potential buyers are trusting her to tell them the truth. b. No, because it was common practice to use asbestos when the house was built. c. Yes, because it will not be revealed by a basic inspection of the house. d. No, but she cannot tell the buyers that there is not asbestos in the house.
c. Yes, because it will not be revealed by a basic inspection of the house.
Professional Basketball teams have been pursuing Cody, a recently graduated high school athlete, for nearly two years. Cody and his father hired an experienced agent to represent him in contract negotiations with the various teams. Unfortunately, just before meeting with the agent to review contracts, Cody's father was hospitalized in critical condition following a car accident. Despite knowing that Cody would be alone, the agent insisted that they meet and Cody decide on a team to work with. The agent convinces Cody to sign a lucrative contract with a top-rated team, but the agreement contains a non-competition clause that would keep Cody bound to that team for his entire career. The contract has a 10-day grace period for review and cancellation with no penalty. After Cody's dad recovers and returns home from the hospital two weeks later, they discuss the contract and seek to cancel it. Is it likely that Cody will be able to avoid the contract?
c. Yes, because the non-competition clause is oppressive.
Seth finds a lost dog and returns her to her owners. The overjoyed owners promise Seth $500, but never send him the money. Seth:
c. cannot collect the money because it was offered in response to something Seth had already done.
An employment contract that does not specify the duration of the employment ________________.
can be terminated at any time by either party
Heritage Technologies LLC v Phibro-Tech, Inc. demonstrates that typos
can occur even in carefully drafted agreements
Seth finds a lost dog and returns her to her owners. The overjoyed owners promise Seth $500, but never send him the money. Seth __________________.
cannot collect the money because it was offered in response to something Seth had already done.
consent
certain kinds of trickery and force can prevent the formation of a contract
Which of the following is a standard provision frequently found in contracts?
choice of forum
Under the _________, the ___________ rule means that an acceptance that adds to or contradicts an offer is generally considered a(n) __________ and it ____________ the original offer.
common-law mirror-image counteroffer rejects
According to the court in Brunswick Hills Racquet Club Inc. v. Route 18 Shopping Center Associates, which of the following constitutes good faith?
conduct that does not violate community standards of decency, fairness or reasonableness
There is no valid _________ for promises to perform an act the promisor is already obligated to perform. This is called the ___________.
consideration pre-existing duty rule
Bilateral Contract
contract in which each party has made a promise to do something
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? a. Yes, under the leading object rule. b. Yes, because the contract was for the sale of goods over $500. c. No, because Arabella has already fully performed. d. No, because the contract is fully executed.
d
Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports. Brahma delivered 20 of the skis on May 1. On June 1, Summer Sports notified Brahma that it would not honor the agreement. Which statement is correct? a. The contract is void since it was oral. b. The contract is enforceable for the 50 jet skis. c. The contract is obsolete. d. The contract is enforceable for 20 jet skis.
d
Alais is a clothing fashion designer known for her French style of elaborate heirloom smocking combined with industrial elements. Planning for an upcoming show in Paris on September 26, she orders on September 10 300 yards of a custom reflective material from Rutherford Industries for her seamstresses to hand smock. The supplier promises to deliver the material before September 20, so Alais will have time for her staff to complete the sewing. When the cloth doesn't arrive until the evening of September 21, Alais files a claim for breach against Rutherford. Who prevails?
d. Alais prevails because the breach was material.
Franklin hires Angela to paint his portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a masterful job. Franklin disagrees. He thinks the painting makes him look like a toad. Franklin refuses to pay, and Angela sues Franklin. Who wins and why?
d. Angela loses because this is a personal satisfaction contract.
May pays Charlie to construct a skating rink on her property. She soon changes her mind and, in writing, assigns her right to have the rink built to Jane, whose sons love to play hockey. Neither May nor Jane inform Charlie of the assignment. May goes on a long trip and discovers a skating rink in her backyard when she returns home. Jane sues Charlie and May. What result?
d. Charlie has no further obligations under the contract
Tim's Lumber Co. agrees to provide Deckbuilders, Inc. with all of the wood that Deckbuilders requires for the next five years. Deckbuilders agrees not to buy wood from any other vendors. What is the primary restriction on how much wood Deckbuilders may demand?
d. Deckbuilders' demand for wood must be made in good faith.
Peter, a minor, purchased a car from ACME Motors. Using a fake ID, he misrepresented his age to be 18. The contract is fully executed. Which of the following is correct? a. Peter cannot disaffirm the contract because a car is a necessary. b. Peter can disaffirm the contract, because a minor must be saved from his own poor judgment, including his lie. c. Peter cannot disaffirm the contract because of his misrepresentation. d. Either b or c may be applicable depending on the law of the jurisdiction in which the contract was formed.
d. Either b or c may be applicable depending on the law of the jurisdiction in which the contract was formed.
Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit?
d. Gintzler will win because he gave consideration.
John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The agreement states that John will pay $500 when the contract is signed and the remaining $500 when FashionWare delivers the zippers. In the contract, John specifically states that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse in 30 days. FashionWare breaches the contract, causing John to miss his delivery date with Camper's Crevasse, which then cancels its contract with John. What remedies are available to John?
d. John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse.
Yvonne promises to sell 500 pounds of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a contract with McKinley Venturesto to ship the cargo. The contract stipulates that McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not arrive for 5 days, during which time the market price of rice decreases 11 percent. Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her damages because of McKinley's breach?
d. No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money.
Romanita is offered $500 to climb to the top of the academic center, the tallest building on the university campus. Before climbing the 80 foot tower, Romanita purchased ropes, boots and a safety harness, as well as other equipment, at a cost of close to $150. After two weeks of preparation and encouragement by the offeror, Romanita arrives at the tower. However, just before her feet leave the ground on her ascent up the tower, the offeror withdrew the offer, citing safety concerns. Does Romanita have a claim for the $500?
d. No, but she has a potential claim for the cost of the climbing equipment.
Rafferty, a caterer, and Maya, an opera singer, are pleased to be hired to provide their respective services at the same wedding. Unlike Maya's contract, Rafferty's contains a non-delegation clause. Two days before the wedding, Rafferty and Maya decide to go on vacation, so they delegate their wedding obligations to friends they know and trust. The bride and groom object. Is delegation permissible?
d. No. Neither Rafferty nor Maya can delegate their obligations.
Florian, a busy surgeon, reads about a new state-of-the-art surgical mask developed by Myriad Medical Devices (M.M.D.) and thinks it would be useful for his practice. Florian enters into a contract with M.M.D. in which M.M.D. agrees to sell the doctor all the masks he needs in the next six months. Shortly thereafter, a fire burns down Florian's practice, and he will be unable to see patients for at least 9 months. Florian will not need a single mask until the practice is back up and running. If M.M.D. sues Florian for breach of contract when Florian does not order any masks, will M.M.D. win?
d. No. This is a requirements contract, and Florian acted in good faith.
Seventeen-year-old Ruby buys an inflatable bounce house from SplurgeZone for $2,500 dollars. SplurgeZone buys its products from the manufacturer for $1000 each. The bounce house is great fun for a year, and then it rips in several places and is ruined. Ruby wants her money back. Assume she is in a state that follows the status quo rule. Will Ruby be able to recover any money from SplurgeZone? a. No, because she never formally rescinded the contract. b. Ruby will receive $2,500 from SplurgeZone. c. No, because she is no longer a minor. d. Ruby will receive $1,500 from SplurgeZone.
d. Ruby will receive $1,500 from SplurgeZone.
Sophie is an accomplished plastic surgeon who has lost her medical license due to her addiction to illegal drugs. Vanessa hires Sophie for a "filler party" in which Sophie, using a simple medical procedure designed to reduce wrinkles, injects a filler into the foreheads of Vanessa and ten of her friends. Vanessa fails to pay Sophie, and Sophie sues. What will result?
d. Sophie will lose because she does not have a medical license.
For 20 years, Art's Flower Shop relied almost exclusively on advertising in the Yellow Pages to bring business to its shop in a small West Virginia town. One year, the Yellow Pages printer accidentally did not print Art's ad, and Art's suffered an enormous drop in business. Art's sued for negligence and won a judgment of $50,000 from the jury. The printing company appealed, claiming that under an exculpatory clause in the contract, the company could not be liable to Art's for more than the cost of the ad (about $910). Art's claimed that the exculpatory clause was unconscionable. Please rule.
d. The clause is unenforceable because it is unconscionable.
Helena shares with her family her two goals for her senior year in college: join a synchronized swim team and shoot a bald eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges Helena to spend the year looking for a job, promising, "If, upon graduation, you have secured a job, have refrained from synchronized swimming, and have not shot any bald eagles, I will give you $10,000." Helena immediately accepts the terms of the agreement and at graduation has met all three criteria, but Anika refuses to pay. What argument will be most helpful for Anika in court?
d. The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal.
Lewis signed a contract for the rights to all timber located on Nine-Mile Mine agreeing to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him from entering the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf for which Lewis had no contradicting evidence. The court granted summary judgment. Why?
d. The market value evidence shows that Lewis suffered no harm and, therefore, had no claim.
Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250?
d. Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed.
Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise?
d. Yes, because Ruben relied on the promise.
Alonzo graduates with a 3.8 GPA in Accounting from a New York university and receives offers of employment from three of the Big Four accounting firms. While considering his options, a mid-sized firm in California calls and offers him twice the starting salary of his top offer. The only caveat is he needs to be in Los Angeles within the next week. Alonzo excitedly decides to take the California job. He refuses the other employment offers, breaks his lease in New York, sells or gives away most of his possessions, buys a new car, and heads for L.A. the next day. When he arrives three days later, the firm apologizes and informs Alonzo that the position is no longer available due to the loss of a major client. Based on these facts, does Alonzo have a potential claim against the accounting firm?
d. Yes, on the theory of promissory estoppel.
Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly installment payments. Six months later she tries to void the contract on grounds of mental impairment. A court will a. not void the contract unless Sasha agrees to have the court appoint a guardian for her. b. normally void the contract without requiring anything further on Sasha's part. c. ordinarily not void the contract unless Sasha had a court-appointed guardian at the time she entered into the contract. d. normally void the contract but will require Sasha to return the piano.
d. normally void the contract but will require Sasha to return the piano.
Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an
executory, bilateral, express contract.
A party can reject an obligor's performance if he is not personally satisfied, even if the contract makes no explicit mention of applying a subjective standard.
false
Alice signs a contract with Bob to buy Bob's house for $150,000, with the clause, "if I am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable over 15 years." Assume that Alice tries but is unable to obtain the described loan, and therefore refuses to proceed with the purchase. Alice is in breach of the contract.
false
All oral contracts are quasi-contracts until they are completely executed.
false
Ambiguities in contracts are always interpreted in favor of the side that wrote the contract, since they are the ones who know what the provision is supposed to mean.
false
Contracts must use formal terminology such as "whereas" and "heretofore" in order to be legal.
false
Courts require specific words and phrases to create an enforceable condition in a contract.
false
Emily runs a children's clothing boutique which takes in local homemade items on a consignment basis. Her standard form contract indicates that Emily has the right to put items on sale without prior approval, but does not specify what effect the sale has on the consignor's payment percentage. Her intent is to keep the same profit she would have had without the sale. She is using ambiguity in her contract to increase her sales and profit.
false
Generally, neither a "time is of the essence" clause nor a "force majeure" clause will be recognized by the courts because these types of clauses are seen as a violation of public policy.
false
If you have an established relationship with a buyer, you can sell small tracts of land without a written contract.
false
It is unethical to use your lawyer as an excuse for a provision of a contract, such as, "My lawyer insists that I have a liquidated damages clause..."
false
T/F Courts are generally unwilling to enforce a contract when one party was intoxicated when making the agreement.
false
T/F If a salesperson says, "This is a great car and it's really fun to drive," but the car turns out to be a lemon, the salesperson has committed fraud.
false
T/F In contract law, a minor is someone under the age of 21.
false
The statement, "You will have a job with Snelling & Snelling as long as you complete your degree in business administration this May" does not create a condition because it does not include the phrase "provided that."
false
You should hire a lawyer to review any legal papers you have to sign, especially such papers as lease agreements or car purchases.
false
If the court adjudicates Barrows mentally incompetent
his future agreements will be void
Rafaella wants to plant a garden, and she agrees to buy a small piece of land for $300. Later, she agrees to buy a table for $300. Neither agreement is put in writing. The agreement to buy the land enforceable, and the agreement to buy the table enforceable. A.is; is B.is; is not C.is not; is D.is not; is not
idk
(ch 11) mrs.martin tells some neighborhood kids that she will pay $100 if any of them mow her lawn. jake goes to a hardware store, purchases a lawnmower for $60 & then mows mrs.martin's lawn. jake has entered into what type of contract?
jake has made a unilateral contract with mrs.martin & a bilateral contract with the hardware store
A court will not find that a party violated a contract if the breach was not _________.
material
To constitute a violation of a contract, the breach must be
material
6. Can Waterville get the $25,000 from Motel Services under the theory of promissory estoppel?
no because motel services never made any promises about the promotional offer to waterville
Does the writing of the earlier memo 14 years ago make the more recent memo enforceable?
no because the earlier memo obligated dementas to provide the driving services and a person cannot receive additional consideration for acts they are already required to perform
8. Is the contract between Waterville and Motel Services voidable?
no because there is nothing in the facts to indicate that one party can terminate the agreement
7. Can Waterville get the $25,000 from Motel Services under the theory of quasi-contract?
no because waterville did not give motel services benefit
Rothman's clothing store had a 20 year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's?
no, based upon the "good faith" requirement
Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports car after Ted replaces the engine and fixes the transmission. The contract contains a "time is of the essence" clause, requiring Ted to have the car ready for the sale by February 13. On February 12, Ted calls Aisha and says he needs two more days to complete the repairs. Aisha declines and buys another car. Did Aisha breach the contract?
no, because the contract contained a time is of the essence clause
Nancy buys a new car from Bayside Beemers. The salesman Chris tells Nancy the car is "the smoothest ride on the planet." After she buys the car, Nancy develops back pain due its rough ride. Can Nancy sue for fraud?
no, because the statement is considered puffery
Exculpatory clauses
release one party from liability in the event of injury to another party
Something is bargained for if it is ________________________________.
sought by the promisor and given by the promisee in exchange for their respective promises
Fred slips on some ice on Opal's front steps and shatters both his kneecaps. Opal has a comprehensive homeowner's policy with Riskocity Insurance, but Riskocity refuses to pay for Fred's injuries as the policy does not cover accidents caused by Opal's "dangerous conduct." The Community Rules of Opal's gated community require residents to keep their front steps free of ice. Riskocity contends that because Opal violated the Community Rules, she is liable for Fred's injury. Opal argues that the insurance policy makes no mention of her Community Rules and because she could not foresee Riskocity relying on the Rules, they should not prevent her from recovering. What result?
the insurance contract was ambiguous, so the Community Rules will not prevent Opal from recovering
The Uniform Commercial (UCC) code makes __________________.
the law of sales more flexible
The UCC requires a writing for __________.
the sale of goods priced $500 or more
It is most likely that the exculpatory clause was drafted by
the yellow pages printer
If the boat were owned by a large healthcare corporation what additional argument would this raise to help LGS?
there was less of a potential imbalance of power between the parties
Scarlett and three friends, all of whom are minors, go to the grocery store and buy food for a camping trip. They buy $50 worth of food and then after the trip disaffirm the contract. What result?
they must pay for the value of the benefit received
Unlike business people, lawyers are trained pessimists -
they try to foresee and protect against everything that could possibly go wrong
A ________ clause will generally make contract deadlines strictly enforceable. Merely including a date for performance ________ make time of the essence.
time is of the essence does not
A court may, at times, discharge a party who has not performed.
true
A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month because of recent price increases in coffee. The retailer may treat the wholesaler as having breached the contract and sue for damages even though the wholesaler's performance is not due until next month.
true
In the case of a typo, a court will reform a contract if there is clear and convincing evidence that the alleged mistake does not actually reflect the true intent of the parties.
true
Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract.
true
One purpose of contract law is to determine which agreements are worthy of legal enforcement.
true
One purpose of contracts is to avoid litigation.
true
Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to form an enforceable contract.
true
Some contracting parties are intentionally vague in contract terms.
true
Some of the elements of a contract are acceptance, consideration, legality, and capacity.
true
T/F If a minor can cancel a contract, it can be done at any time before the minor reaches the age of majority or within a reasonable time after reaching majority age.
true
T/F Mason commits fraud when he sells his desk to Alice. Alice can rescind the contract and sue for damages.
true
T/F Mrs. Elsley was an elderly woman who relied on Nancy to visit her every day and prepare her meals. Nancy convinced Mrs. Elsley that she should give Nancy her house so they could live together and Nancy could better care for her, although Nancy really just wanted the house and had no intention of moving in to take care of Mrs. Elsley. Although Mrs. Elsley agreed, she may rescind the contract because of undue influence.
true
T/F Roger, a minor, buys a stereo from Tuneland, Inc. Roger uses the stereo for a few months, returns it to Tuneland, and demands his money back. Roger may rescind the contract, return the stereo and get his money back.
true
T/F Spencer, age 18 and of sound mind, has the legal capacity to contract.
true
T/F Travis had too many beers at the baseball game. Ed realized Travis was so intoxicated he wouldn't know what he was doing, so he got Travis to sign a promise to sell his motorcycle to Ed for $50. When Travis gets sober, he can attempt to void the contract.
true
The legal right to sue for a breach of contract is subject to a statute of limitations.
true
When one party breaches a contract, the other party has no obligation to perform and may sue for damages.
true
