EXAM #2 CENGAGE BRIEF HYPOTHETICALS (CHP 11-17)

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.

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.

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.

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?

Richard and Michelle Kommit

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.

Check My Work 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.

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?

Alistair loses because this is a valid exculpatory clause

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.

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.

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.

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?

Bryce wins, because he fully performed his obligations under the 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?

Charlie has no further obligations under the contract.

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?

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?

Dalton's assignment was in writing, so it cannot be revoked.

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.

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

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

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

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

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 to agree to them. You click the "I agree" box. Will you be bound by the terms?

It depends on what state you are in

A national beverage company ran a promotion where consumers could collect "points" by purchasing the company's products, then redeem the accumulated points for items such as baseball caps and t-shirts. One television ad showed a teenager landing a $33.8 million-dollar aircraft in his schoolyard while "Harrier Jet: 7,000,000 points" flashed across the screen. After the commercial aired, John gathered the 7 million points and asked for a Harrier jet, yet the company refused to comply. Two days later the points for the jet had changed in the ad from 7,000,000 to 700,000,000. If John sues for the airplane, what is the probable outcome?

John loses, because no reasonable person would believe the advertisement was a serious offer.

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.

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.

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

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 will result?

Oliver will lose as long as the company can show it was acting in good faith.

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.

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?

The assignment is not valid because it was not in writing.

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.

The clause is unenforceable because it is unconscionable

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.

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.

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?

Tremaine will win because the contract was procedurally and substantively unconscionable.

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.

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

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.

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:

neither Bridgette Browning nor Local 30 were a third-party beneficiaries because the concession contract did not intend to benefit either of them.

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:

that Martha granted a novation.

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 __________________.

the school will be able to enforce the promise with "moral consideration"

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.

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?

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?

Evan, Persephone and Carlene.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

On August 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she can only accept the offer by mailing the money to arrive by September 2 at his university mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox by August 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment) until September 4th. Did Clarissa accept Calvin's offer?

No, because Clarissa didn't meet all the requirements of the offer.

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?

No, because Malik did not have notice of the clause before the ticket purchase.

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?

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?

No, because he is an incidental beneficiary

For his 17th birthday, Asher bought himself a used car from a car dealer for $10,000. The dealer purchased it for $6,000, repaired it, and then sold it to Asher. Eighteen months later, Asher has almost finished paying off the car when he totals it by accidentally driving it into his neighbor's swimming pool. Asher's mother is a lawyer and tells him to rescind the contract. Will Asher be able to recover any money from the dealer?

No, because he ratified the contract

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?

No, because it is not essential to the employer.

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.

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.

Mina, a real estate developer, reads that the tiny town of Lakeview is considering building a large shopping center and adding public transportation from the nearby city to Lakeview. Mina knows that these types of changes would greatly increase the demand for real estate in Lakeview. She buys 10 acres of land in Lakeview from Arlen, so that she can build houses and take advantage of the town's economic boom. There is no reference in the purchase and sale agreement or deed to the possible development in Lakeview. A few weeks later, the town declares that, due to changes in zoning laws, it is not building the shopping center or adding the public transportation. Can Mina rescind on her contract with Arlen?

No, because she understood the risk she was assuming.

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.

Just before turning 18 years old, Caitlynn goes to the local Driver Examination Office to test for her driving license. When she passes with a perfect score, her parents allow her to go alone to the local car dealership and purchase her first car. She signs a contract to buy a used lemon-yellow Volkswagen Beetle with payments of $225 per month for 3 years. Unbeknownst to Caitlynn and her parents, the car was a trade-in, and the dealer was still waiting to receive the title. Caitlynn drives the car until six months after she turns 18, making the payments each month, but then decides she hates the yellow color, and returns it to the dealer. The dealer refuses to take the car back. Is Caitlynn obligated to the car purchase contract?

No, because the original contract was void.

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.

Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later, the truck began having transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. Treadwell admitted the mileage error and promised to install a new transmission for free. When Newburn came to pick up the truck with the new transmission installed by Treadwell, the company refused to turn over the truck until Newburn signed a general release of the dealership's liability for any claims based on the inaccurate mileage, which Newburn signed. One month later, the truck broke down, and the resulting delays cost Newburn so much income that he fell behind on his loan payments and lost the truck. He sued Treadwell, which defended based on the release. Is the release valid?

No, the release is not valid. This meets all of the criteria of a clear case of economic duress. Treadwell made an improper threat, forcing Newburn to enter into the contract.

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.

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

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.

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?

Rampart's motion for summary judgment is granted because Gasket is an incidental beneficiary.

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?

Rudolph owes Moe money because the licensing issue is irrelevant to their agreement.

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.

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?

Sophie will lose because she does not have a medical license.

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?

The contract is governed by the UCC, so the court may choose to enforce the remainder of the contract.

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.

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.

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.

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?

The new terms may be binding because an oral modification may be binding under the UCC.

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 will result?

The offer will not be enforced because the offer is open too long.

Susan drops by Dean's garage sale and buys a painting for $10 that both she and Dean think is a copy of a piece by Matisse, a well-known painter. Later, Susan is delighted to discover that the painting is actually an original Matisse and is worth $50,000,000. Dean hears the news and wants the painting back. Will he get it? Why or why not?

Yes, Dean is entitled to rescind. This is a mutual mistake because both parties made an important factual error.

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.

Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M&M Precision Body and Paint for body work and a paint job. M&M did the work and charged $1,900, which Travis paid. Travis later complained about the quality of the work. M&M did some additional work, but Travis was still dissatisfied. He demanded his $1,900 back, but M&M refused to refund it because all of the work was "in" the car and Travis could not return it to the shop. The state of Nebraska, where this occurred, follows the majority rule on this issue. Does Travis get his money?

Yes, Travis will get his money because a minor is permitted to disaffirm a contract and get a full refund of his money, even if he is unable to make restitution.

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.

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" trip that had participants visiting six bars in a two hour span of time. Between the fifth and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local luxury car dealer, who was holding a special evening sales event. Seeing all the cars and thinking he was signing up for training as a race car driver, Alex mistakenly signed a contract to purchase the $188,425 emerald-green Ferrari displayed in the showroom. The next day, a sober Alex found the contract paperwork at the foot of his bed, and with no memory of the previous evening, quickly headed to the dealership. As he began to explain to the sales manager Janine about the drunken purchase mistake, he changed his mind, and decided to keep the car. Manager Janine, however, took the contract copy from Alex and ripped it up, saying "You're not responsible enough to own this car." Does Alex keep the Ferrari?

Yes, because Janine can't void the contract.

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?

Yes, because Jo-Anne has completed part performance on the contract.

Ellen and Allen are interested in renting Lyle's country house for the summer. Lyle tells them about the house, volunteering the property's square footage, the number of bedrooms, and stating that the house has a heated pool and a hot tub. The next day, Lyle learns that the pool is going to be drained for the summer as it undergoes repair. Must Lyle disclose this information to the potential renters?

Yes, because Lyle previously told them about the pool.

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.

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?

Yes, because the company expected Raven.

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.

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?

Yes, because the non-competition clause is oppressive.

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.

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?

Yes, on the theory of promissory estoppel

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.

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.

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.

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.