Contracts Midterm 2 Class Hypotheticals

Mona is seriously hurt when a bank robber storms out of a bank and shoots her as she is waiting for a bus. Hysterical with pain, Mona fights off rescuers and paramedics and refuses to permit anyone to touch him. Over her protests, Dr. Spock, a surgeon, renders first aid in stops hemorrhaging, saving Mona's life. Dr. Spoke sends Mona a bill for $900, the reasonable value of his services. Most other physicians would have charged no more than $800 for the same care. A. Mona must pay $900 if it is reasonable. B. Mona does not have to pay more than $800. C. Mona is not obligated to pay Dr. Spock. D. Mona has no duty to pay Dr. Spock because she rejected his services before they were tendered. E. There is an implied in fact contract between Mona and Spock.

A.

After seeing footage of homeless children sleeping on the streets in Serbia, Mona calls the American Red Cross and pledges $1,000 in 30 days. Michael, an American Red Cross executive, receives and records Mona's pledge, but takes no action in response to Mona's pledge. After 33 days, Mona hasn't tendered payment despite receiving inquiries on Day 31 and Day 32. The Red Cross sues Mona on Day 35 on grounds that her promise was legally binding. Mona argues that it was not binding and that promissory estoppel does not apply. Who prevails?

ARC. Charitable Organizations do not have to change position, they are the exception. Once Mona pledges, she is bound.

Implied in Law

Also known as a quasi-contract, an obligation imposed by a court to avoid injustice or to prevent unjust enrichment.

The Apple Corporation has employed Sony for 20 years. One day, a company employee, informed Sony that the company will pay him a pension of $600 per month when he retires for the rest of his life. Tony, the CEO's son, then congratulated Sony and said, "Now you can go buy a boat." In reliance on Tony's statement, and now, no longer worried about income because of the promised pension, Sony retires the next month, doesn't work anywhere else. When Apple refuses to send Sony a check, he sues on grounds of promissory estoppel. Sony had recorded the "boat" statement from Tony, as proof that his co-worker made a promise of a pension, which is legal in their city. Who prevails?

Apple. There is no inducement of the promise. There is nothing to indicate the co-employee can make the binding promise for Apple.

Bob and Marge are having an extra-marital affair. Bob is an company executive and Marge is an employee of the same company. Marge knows that Bob is married, but believes wants Bob to leave his wife. After Bob tells Marge he will not leave his wife, Marge threatens to sue Bob for harassment, although she knows that such a claim would be false. Not wanting their extramarital affair to be publicized, Bob offers to pay Marge $10K in exchange for her forbearing from filing the sexual harassment claim. Which answer is most accurate regarding their agreement? A. Marge's forbearance to file the claim is valid consideration. B. Marge's forbearance to file the claim is not valid consideration because Marge did not give up a legal right. C. Marge's forbearance to assert the claim is not valid consideration because she has a legal duty to report Bob's infidelity to authorities. D. Marge is entitled to the $10K because her and Bob had a special relationship.

B.

Dibo offers to make repairs to Marlo's rental building in return for Marlo's promise to pay Dibo $10,000 when the repairs are complete. Marlo replies by advising Dibo that he will pay Dibo $9,000 to make all necessary repairs to the building. Days later, Dibo begins making repairs in the rental building. Marlo is aware of Dibo's performance and does not interfere. After 50% of the repair work is complete, Marlo advises Dibo to stop the repair work and leave the property. When Dibo asks for payment, Marlo advises Dibo that he did not accept his offer and therefore, Marlo is not obligated to pay Dibo because there is no contract. Dibo sues Marlo. Which answer is most accurate? A. Dibo is entitled to $9,000 because Dibo accepted the offer. B. Marlo cannot revoke the offer because of the doctrine of substantial performance. C. Dibo is entitled to $4,500 because Dibo accepted Marlo's offer. D. Marlo can order Dibo off his property and halt performance because the two were involved in preliminary negotiations and had not yet reached a final agreement.

B.

Momo sends Mona an offer on May 1: I hereby offer to sell you my house for $250,000." Mona replies on May 3: 'Send me your lowest price." Momo receives Mona's reply on May 5 and send Bill the same offer he sent Mona. On May 7, Mona mails Momo an acceptance letter. Momo receives Mona's letter on May 8. On May 6th, Bill replies to Momo: "I accept your offer but I hereby reserve my the right to cancel the purchase." A. Momo has a K with Bill. B. Momo has a K with Mona. C. Momo does not have a contract with Mona or Bill because they both rejected the offer. D. Momo does not have a contract with Mona because Momo revoked the offer. E. Momo has a contract with Mona and Bill

B. "Send me your lowest price" is not a rejection "I accept but hereby reserve my right" is an Illusory Statement, there is no acceptance

Maggie mails Momo an offer to sell Momo her Porsche car Momo for $37K via mail. Upon receipt on May 6th, Momo mails an acceptance via U.S. mail. On May 7th, Momo learns that his son was accepted into Columbia University and must pay $20,000 to reserve his seat. Shocked by the news, Momo decides he cannot afford to buy a Porsche and send his son to Columbia University. He contacts Tim, his cousin, a U.S. mail clerk, and tells him to retrieve Momo's acceptance letter from the yesterday's Post Office mail pick up, which Tim does before delivery to Maggie. A. There is no acceptance. B. Momo's acceptance is valid. C. There is no acceptance because Momo effectively retracted the acceptance. D. No contract because it is impossible for Maggie to ever receive an acceptance after Tim removed the letter from Post Office circulation.

B. Once the acceptance letter is sent, the Mailbox rule applies and his acceptance is valid.

Steve, 13, has tendered Butler services to Maryann for several months without having received any pay. Knowing that Steve wishes to attend high school soon, Maryann gives Steve a letter for his birthday that states Maryann will pay Steve $30K, the reasonable value of his labor, for his past Butler services. Which is most accurate? A. Steve is not entitled to payment because the promise lacked consideration. B. Steve is entitled to $30,000. C. Steve is not entitled to compensation because Steve is a minor and cannot enter into contractual agreements. D. Steve is entitled to payment if the promise because the promise was in writing.

B. She was enriched by his butler services. It would be unjust for her to retain those services without payment. She made the promise in writing, she has an obligation to pay. (even if it wasn't in writing, it would still be enforceable)

In a dangerous flood, Dan's car is floating away into a dam. Steve, while flying by in a helicopter, lands, and chains Dan's car to a thick tree to keep it from floating into the dam and wrecking. As Dan observes from his home. Dan gives Steve a thumbs-up as he gets back into his helicopter and flies away. Dan retrieves his car after the flood, which has sustained no damage. Unbeknown to Dan, Steve was not a good Samaritan, but a professional vehicle rescuer, and sent Dan a bill for $750. Dan is furious. A. There is an implied in law contract with Steve. B. There is an implied in fact contract with Steve. C. Dan does not have to pay Steve because Steve volunteered to help. D. Dan is only obligated to pay if his vehicle is worth $750 or more.

B. The mutual assent took place AFTER the action

Brad and Sally Williams received a letter from Mase Bank ("Mase"), their mortgage company. Mase demanded the Williams renew the expired fire insurance on their mortgaged property as they agreed to do pursuant to the terms of the mortgage agreement. Brad and Sally choose to spend their money on other matters. Mase mails Brad and Sally another letter stating if they do not obtain insurance coverage on the mortgaged property within 45 days, Mase will obtain fire insurance on the mortgaged property and charge Brad and Sally for the insurance cost. Brad and Sally figure that Mase will obtain a better deal on fire insurance than they could if they purchased it, and therefore, take no action in response to Mase's second letter. Three weeks after receiving the Mase second letter, the mortgaged property burns down, but the mortgaged property isn't covered by fire insurance, resulting in $600K in property losses. Mase never attempted to purchase fire insurance. Brad and Sally sue Mase for $600K, alleging that Mase was obligated to obtain the fire insurance b/c of promissory estoppel. Mase claims it is not liable at all, and if it is liable, damages are limited to the cost of fire insurance for $4,000. Who prevails?

Bank. Mase did not dishonor their promise as they gave the couple 45 days, and the house burned down in 21 days.

Completely in love, Aliya and Berik are engaged on May 5. In anticipation of the marriage, on June 5 the same year, Berik, and his father, Lieutenant Colonel Ramas, enter into a written agreement by which Colonel Ramas promises to leave Berik his legendary Zulut sword, worth $650,000, in his will. In reliance on receiving the Zulut sword some day, Berik and Aliya marry. After Col. Ramas passes away, he leaves the Zulut sword to Berik's younger brother, Meril. Berik sues his father's estate to retrieve the sword. Please explain how a court is likely to rule.

Berik. In reliance to the promise given by the father, he marries Aliya. This is Promissory Estoppel. A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance.

Jane, an unmarried woman, is pregnant with the child of General Brandon C. Jones, a U.S. Army Brigade Commander, and adviser to the Secretary of Defense. Both are single. In exchange for Jane naming the child, "Brandon C. Jones II," General Jones offers to provide monthly support and education for the child in the amount of $3K until the child reaches age 22, and set up a college trust fund that will cover 5 years of college education for the child, up to $150K. Jane happily agrees to the deal and names the child accordingly. Which answer is most accurate regarding whether the agreement lacked consideration? A. Yes, because Jane did not suffer a detriment. B. Yes, because the child may not want to be named, "Brandon C. Jones II." C. No, because parties are not required to exchange performance of equivalent value. D. No, because General Jones is a highly respected person and the child would benefit from having his name.

C.

Aaron walks into a barbershop and watches patrons receive haircuts. Above each barber chair is a sign that says, "haircuts $10.00." Aaron thinks $10 is entirely too much money but sits in a barber chair anyway. The barber cuts Aaron's hair and trims his mustache. Afterward, Aaron looks in the mirror and says, "I think this is worth $7 and hands the barber that amount. The barber demands $10. A. Aaron should pay $7. B. Aaron should pay $10, the usual rate if it's reasonable. C.Aaron should pay $10 the usual rate because he assented to pay it. D. Aaron does not have to pay any money.

C. Aaron assented to the price when he read the sign and still continued to sit and receive a haircut.

Harry notices Sara and Lisa, two sisters, walking into a store. Lisa owes Harry $300. When Harry approaches the sisters and politely inquires about when he could expect to receive the $300 that Lisa promised to pay him weeks ago, Lisa screams, falls to the floor, and starts to cry, yelling, "How could you?!" The security officer tackles Harry and the sisters run away. Harry is arrested and charged with assaulting Lisa, but Harry is released on bail until his trial. Harry contacts Sara and promises to pay Sara $10,000 if she will tell the truth about what happened in the store when she takes the witness stand. Sara agrees if Harry will pay in cash the day after she takes the stand. Harry agrees. During trial, Sara tells the truth. Harry is found innocent, however, largely because video footage inside the store reveals that he did not commit a crime. Upon his release, Harry refuses to pay Sara. A. Harry is bound despite it being the video footage that proved his innocence. B. Harry is bound because he received a material benefit. C. Harry is not bound. C. Harry is not bound unless Sara relies on promissory estoppel. D. A & B.

C. The consideration is Fraudulent, she already has an obligation to tell the truth.

Arguelo finds Benito's pet dog running lost during a thunderstorm and rescues and cares for it. Upon learning of Arguelo's deed, Benito subsequently promises to pay Arguelo $50, reasonable compensation for Arguelo's labor. Binding promise? A. No, because Benito's promise lacks consideration. B. No, because dogs are property and not dependents C. No, because Arguelo acted officiously There was no intent on Arguelo that he did not want to perform this service D. Yes, because Benito's promise was made in recognition of previously received goods or service E. Yes, because Arguelo and Benito have an implied in fact contract.

D.

Sara offers, via mail, to sell Lisa her car for $20,000 and tells Lisa, "Let me know if you accept the offer in a few days but not later than May 5." Lisa receives the offer and immediately mails an acceptance on May 2. Lisa changes her mind a day later and mails Sara a rejection on May 3. Which is most accurate? ​ A. There is a contract, effective May 2. B. There is no contract because Lisa mailed a rejection on May 3. ​ C. There is a contract only if Sara receives the acceptance before May 5. ​ D. There is not a contract unless the acceptance arrives before May 5 before the rejection.

D.

Steve, 17, just received his driver's license and a report card with all perfect scores. As a reward, Steve's uncle gives him $10,000 cash. Steve decides the use the cash to purchase a used car for $7,000 to take his girlfriend out for prom night and to celebrate his 18th birthday on May 14 (age of majority) the same night of the prom. Three days later, on May 17, Steve decides that he does not want the car and returns it to the dealership. The dealer refuses to accept it. Which is most accurate? A. Steve cannot cancel the contract because he is an adult. B. Steve cannot cancel the contract because he used the car and accepted the car as consideration for the $7K. C. Steve can cancel the contract. D. Steve can cancel the contract because it was not a necessity.

D. Contracts by a minor prior to the time the minor reaches the legal age of majority are unenforceable unless they are for "necessities", goods and services needed by the minor.

Jamie does construction work on Amy's house for pay based on the value of the benefit Amy receives from Jamie. When Jamie completes the job, Amy refuses to pay. The court recognizes a right to quantum merit recovery on behalf of Jamie. Jamie's work on the property increased the value by $1600. The market price to have others perform the same labor is $1400. Amy's neighbor testified she would pay Jamie $1900 to perform the same labor on her house. How should the judge award Jamie? A. $1400 because the value of Jamie's labor is the net benefit to Amy. B. $1600 because it represents Amy's net benefit. C.$1900 because that represents the market value of Jamie's work in the open market. D. $1400 or $1600 because they are the measure of the benefit Amy has received from Jamie.

D. Implied in Law $1400 is the Reasonable Value Recovery $1600 is the Net Benefit Value Recovery

On May 7th, Sarah offers, via mail, to buy Momo's watch for $1700. Momo replies, "My watch is easily worth $2700. But I offer to sell it to you for $2100 because it would be great for you to have it." Sarah receives Momo's reply on May 10th. On May 13th, Sarah properly dispatches an acceptance letter. Unbeknownst to Sarah, on May 11th, Momo died in a BASE jumping accident and his estate has the watch but did not notify Sarah until May 27, despite learning of Momo's offer to Sarah on May 13th and receiving the acceptance letter on May 15th. A. There is a contract. B. There is a contract because Sarah properly accepted before being notified of Momo's death. C. There isn't a contract because the offer was rejected. D. There isn't a contract.

D. Restatement 36: An offeror's power of acceptance is terminated by death

Kevin knows that Mike needs money to repair his roof. Kevin writes Mikes and states "I offer to loan you $2000 so that you can repair your roof." Mike sends a properly dispatched reply to Kevin stating "Thank you. I accept." Mike's acceptance letter gets lost in the mail. 32 days later, Kevin receives Mike's letter. Which is most accurate? A. There is a contract because 32 days is not an unreasonable amount of time for acceptance via mail B. There is a contract because the acceptance was properly dispatched C. There is no contract because the acceptance was not timely D. There is not a contract.

D. There is no consideration for this exchange (Gratuitous Offer)

Harry sent George the following offer: "I offer to sell you my Range Rover toy car if you will promise to give me $250 cash." George is a collector of toy cars and trucks and tells Harry that he has to go confirm with his bank that he has the cash to purchase the toy Range Rover and asked Harry, "Are you serious about this offer?" Harry responded, "Yes, I am. In fact, I will keep my offer open all day until you return." Relying on Harry's assurances, George walked away very excited and headed to the bank. He spent $10 on taxi fare to the bank. Before he departed, he promised Harry that he would respond to Harry's offer before 4pm. Harry promised to be home all day. Three hours later, Harry opened his front door and observed George walking towards his home with a big smile on his face with a bank envelope in hand stamped, "cash." As George approached Harry's doorway with the apparent intent to give Harry the cash for the toy Range Rover, Harry told George, "I revoke my offer." Outraged by Harry's revocation, George sued Harry in small claims court claiming breach of contract, promissory estoppel, and that he (George) and Harry had an implied in law contract, or, alternatively, that Harry was estopped from revoking his offer. Explain how the judge rule?

Harry CAN revoke the contract. There is no consideration, as pre-accepted reliance is not valid in Contracts.

Lisa Tower, a world class scientist, suddenly dies in a car crash. At the time of her untimely death, she owed her sister, Latifa, $75,000, stemming from a loan Latifa granted Lisa. Knowing of Lisa's loan and debt to Latifa, Major Dickerson, Lisa's widower husband promises Latifa that he will pay the $75,000 debt. He, however, never tenders payment and Latifa sues seeking promissory restitution. Explain who is likely to prevail in court?

Major. This is Lisa's debt. He receives no benefit from paying this debt, Lisa did. There is no pre-existing legal obligation, so his promise is not enforceable.

Momo leases 10 acres of land from John, owner of the Four Sevens Ranch in Texas. One day, John gives Momo an exclusive option to purchase the 10 acres he leases for 1 year for $25K, to expire on January 7, 2022. Momo thanks John for the "option to purchase." Three months after receiving the "option" from John, Momo builds a farmhouse on the land, installs a drainage system, and plows the land for seeding, with John's permission. After 11 months, John receives an offer from Abbott for $35K for the 10 acres that Momo leases from John, and, thereafter, notifies Momo on or about December 8th that the option to buy the land is revoked. After receiving the notice of revocation, Momo sends John $25K on Dec. 9th, which John refuses to accept. Momo sues to enforce his "legal right to purchase" the 25 acres. John contends Momo has no such right because the offer was revoked. Who prevails?

Momo Prevails. There is an option contract created by the lab and effort invested into the land which estopped John from revocation.

Promissory Estoppel

Promise First, then Performance A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise.

Fictional Promise

Promise that the course imposes.

Sears Company offers Sally, a potential new Sears employee, a deal promising to pay Sally, an $100K annual salary, "plus a fair share of the company's profits," if Sally does good work. Sally accepts via mail and agrees to start work in 2 days at Sears. Is the Sears - Sally agreement enforceable?

No. This is a contract, and since there is no specificity, the contract is not enforceable.

Unjust Enrichment

Occurs when one party has undeservedly or unjustly secured a benefit at the other party's expense.

Ann had her Feb 1, 2011, $20K debt to Bank of America discharged in bankruptcy. After opening a business, Ann wrote the bank and promised to pay the $20K debt after her business reached $1M in sales on Oct. 1, 2017. After not receiving payment by Nov. 4, 2017, the bank sued. The original date of the loan is barred by 4 year the statute of limitations. Likely ruling?

Once she reaches the $1M by October 1st 2017, she must pay the $20k. There is just simply a new duty.

Aaron owes Chase Bank three debts of $10K each that are barred by the statute of limitations. Feeling guilty about not having paid the debts and causing the loan officer her job, Aaron sends a letter to Chase: "I promise to pay you one of the debts for $10K by Dec. 1st, which I owe. The other two debts I simply can't pay." When Aaron doesn't pay, Chase sues for all 3 debts. How should court rule?

Only $10,000 has to be paid. He only promised to pay for 1/3 of it, as the other 2 have been barred by the Statute of Limitations.

On Sept 1 Cornel Best sends Paul Robeson an offer to sell Paul a 2020 Range Rover Velar for $51000 and says he will give him until Sept 6 to decide. Cornell knows that the car is worth $61000 but does not want to charge Paul the market price because he wants Paul to make at least $10,000 profit in the event Paul sells the car. On Sep 3, Paul advises Cornel that he will take the offer under advisement but really does not think he needs another car and certainly does not want to spend $51,000. Cornell owes Malcolm $41000. When Malcolm learns of Cornel's offer to Paul, on Sep 4, Malcolm tells Cornel that he will buy the RR Velar if Cornel will give him the $41,000 he owes plus an additional $11,000 for a total of $52,000. Not wanting to upset Malcolm, Cornel accepts Malcolm's offer. When Paul notices Malcolm driving the Velar on Sep 5, Malcolm tells Paul that he just bought the car from Cornell. On Sep 6, Paul delivers $51,000 to Cornel as payment for the Velar. Cornell refuses payment and Paul sues Cornel for breach of contract and sues Malcolm for possession of the car. Cornel then files a claim for return of the car from Malcolm on grounds that his deal with Malcolm lacked consideration. The judge has asked you to make a recommendation regarding the legal issues.

Paul's offer was revoked when he saw him driving the car. Important how we treat Malcolm's consideration... 41,000 is not cornell doing something he is not legally obligated to do HE IS LEGALLY OBLIGATED TO PAY THE 41,000 11,000 is legal consideration, no legal obligation to pay that

Benefit Promise

Performance First, then Promise

Promissory Estoppel Test (4)

Promise Inducement Detrimental Reliance Justice

Sharon is riding her bike and notices a 13-year old boy nearly drowning in a swimming pool. Sharon jumps off her bike and dives into the pool, injuring her leg in the process, but saving the boy's life. The boy's mother, April, runs out yelling for help and thanks Sharon. April promises to pay the medical bill for Sharon's lacerated leg up to $1,000. When Sharon sends the April a $433 medical bill, a reasonable amount for the medical services, April refuses to pay. Sharon sues for promissory restitution. Who likely prevails?

Sharon. She performed the benefit of saving the boys life.

Momo leased a condo from Ralph but, unknown to Ralph, Momo did not like the vinyl flooring in the bathroom. Momo hired Mona, a contractor, to install new designer vinyl flooring in the bathroom of his condo. The removal of the old flooring and installation of the new flooring took Mona approximately 6 hours, which Mona completed in one day. After completing the job and confirming Momo was satisfied with the new flooring, Mona sent Momo a bill for $3,000. Thereafter Momo informed Ralph that he had the flooring updated to premium vinyl in the bathroom. Ralph told Momo that the condo did not need new vinyl flooring and that he would not have wanted the floor replaced because he wants all the condo floors to look the same in the condo building. But Ralph also advised Momo that he wanted Momo to be happy. The new flooring increased the value of the condo by $2000. Momo refused to pay Mona despite the great job. Mona sues Ralph the owner of the building after Momo refuses to pay. Fully explain how a court should decide the case and state the rule that supports your answer.

Ralph. Although the property went up by Momo's actions, Ralph was not unjustly enriched because he had no idea about the enrichment.

2 Types of Recovery in a Unjust Enrichment Claim

Reasonable Value Net Benefit

Ryan hires Charlie, a general contractor, to build a swimming pool in his home for $78,000. Charlie, contracts with Terry, a subcontractor, to install the lighting for $8,000 and contracts with Poca, to perform the cement work for $13,000. After the work is complete with Ryan's knowledge, Ryan, who has not had any dealings with Poca or Terry, pays Charlie $78,000. Charlie pays Poca $10,000 and pays Terry, $10,000, and then leaves the country and does not respond to inquiries from Poca or Terry. Ryan has no contact with Charlie and does not know how to contact Charlie, and refuses to take inquiries from Poca or Terry or pay them remaining balances for their work. Terry and Poca sue Ryan under Implied in Law Theory. Who is likely to prevail? Why?

Ryan. Ryan has not been unjustly enriched because he has already paid the $78k. Ryan paid the general contractor, which is what he was supposed to do. The Subcontractors have 0 action against Ryan, but rather the general contractor.

Steve has worked for the Philadelphia Eagles, a pro football team, for 18 years. Eagles President, Candace Buffalo, promises Steve that upon his retirement, she will pay him a pension of $700 per month, contingent upon him never working for another football team. Steve retires and doesn't attempt to find other work or accept a job offer from the Dallas Cowboys, a pro football team. Five years after receiving $700, the Eagles stop paying on grounds that the pension was merely gratuitous, lacked consideration, and thus, is unenforceable. Steve argues that the Eagles are bound because of Promissory estoppel. Judge Jones has asked you to exam the legal issues and explain the legal relationship between the Eagles and Steve.

Steve prevails. Steve is not relying on the promise, he has consideration to not work for another team. This is a contract.

Brad and Sally Williams received a letter from Mase Bank ("Mase"), their mortgage company. Mase demanded that the Williams renew the fire insurance on their mortgaged property as they agreed to do pursuant to the terms of the mortgage agreement between Mase and the Williams. Because of the birth of unexpected twins, Brad and Sally are unable to make the fire insurance payments and have no way of obtaining funds to purchase fire insurance. Mase mails Brad and Sally another letter stating if they do not obtain insurance coverage on the mortgaged property within 30 days, Mase will obtain fire insurance on the mortgaged property and charge Brad and Sally for the cost. Brad and Sally take no action in response to Mase's second letter. Three months later, the mortgaged property burns down, but the mortgaged property isn't covered by fire insurance. It was only after the fire that the Williams learned that they were uninsured. Brad and Sally sue Mase alleging that Mase was obligated to obtain the fire insurance by virtue of Promissory Estoppel. Who Prevails?

The Bank. Brad and Sally are unable to make the fire insurance payments and have no way of obtaining funds to purchase. No Detrimental reliance due to no change in action after receipt of the letter.

Isis, a wealthy woman, sees a military veteran on the street selling tacos during the winter. Isis tells the veteran that she will give him $300 to buy a winter coat so he can stay warm during the winter. The veteran goes into an adjacent clothing store and purchases a winter coat for $150. When he returns to his taco stand, Isis refuses to pay the veteran after she learns that the veteran is a Green Bay Packers fan. The veteran sues Isis under promissory estoppel for $300. Isis denies that her promise is enforceable, and claims that even if it is binding, she is obligated to pay only $150. Who prevails?

The Veteran for $150. He is only out of pocket $150 on the reliance of her promise (reliance interest) and she has not been enriched by him getting the coat, she is only liable for $150. The promise is enforceable to the extent that justice can be avoided. Here, justice is avoided by giving him $150.

Joe owes Mike's Bike Shop $300 for a very old debt. Mike's Bike Shop offers to give Joe a Panther trail bike, with a cushion seat, in exchange for Joe paying the $300 he never paid them, plus an additional $100. Joe agrees to the deal and pays Mike's Bike Shop $400 the very next day. Is Mike's Bike Shop's promise to tender the bike to Joe legally binding.

The additional $100 makes it consideration and makes the contract valid/promise binding.

Aaron, a first-year associate, invites his colleague, Lisa, to a dinner party he's having at his home for other first-year associates from his law firm. To look impressive, Lisa purchases a dress, new shoes, earrings, and a purse, totaling $1800, to wear to the dinner party. The purchased items are non-refundable. After inviting Lisa, Aaron discovers none of the other four associates like Lisa. They claim she makes them uncomfortable. Lisa's socio-economic upbringing is completely different from other associates. Aaron cancels Lisa's invitation, explaining to Lisa that he doesn't want to "make other associates feel uncomfortable." Lisa demands Aaron pay her the $1800 she spent on her outfit, and drops off all the items she purchased at Aaron's doorstep, as she no longer has any use for them. David refuses to pay Lisa money, but sends Lisa an "apology" via text message. Lisa sues Aaron and wants the reasonable value of the items she purchased for his dinner party under contract implied in law and contract implied in fact. Please explain how a court should rule.

The implied in law fails because there is no unjust enrichment. Implied in fact fails because of mutual assent.

Reasonable Value

The value that it would cost another person to acquire the labor/activity on the open market

Rob leased land from Sarah for $5000 a month. One day, Rob hired Tim to build a swimming pool on the land for his kids for $10K. After Tim completed construction of the pool, which increased the value of the land, Rob lost his job and refused to pay. Noticing the nice pool, Sarah told Tim she would pay him the for such a high quality job. Tim sent Sarah an invoice for $10K, but she refused to pay. Tim sues Sarah. Explain how should court rule?

Tim. Sarah receives a benefit which increased the value of the land. Noticing the pool, she says that she'll pay and she is bound.

Net Benefit

Wealth increase due to this list of labor/activities

Bank of America offers a $100,000 reward for information leading to the arrest of the person who burglarized their Michigan Avenue bank. Chicago police detective Sandra discovers that Momo is a friend of the burglar and takes Momo to the infamous Homan Square police unit for intense interrogation. Det. Sandra threatens Momo with arrest and prosecution if Momo does not give up information leading to the arrest of the burglar. Momo knows of the reward and of the enormous pressure put on police and prosecutors to find the burglar. Momo provides information that leads to the arrest of Shirley Temple, the burglar. After his release, Momo attempts to collect the reward. Is Momo entitled to payment?

Yes. Consideration is when a person does something in which they are legally not to do. We know he has knowledge of the reward Is there a preexisting legal duty to give up the information, & Momo has the choice to be arrested and go in front of the court. He has the legal right to remain silent!

implied-in-fact contract

a contract in which agreement between parties has been inferred from their conduct

Implied in Fact

a legally enforceable agreement inferred from the circumstances and conduct of the parties. Mutual Assent.

implied-in-law contract

not really a contract but instead a fiction created by the law to allow the enforcement of a contractual remedy where justice alone warrants such a remedy