Modules 1-15
Owner orally offers to sell his antique gold pocket watch to Dealer Co. for $5,000, and Dealer Co. orally agrees. They agree that Owner will deliver the watch to Dealer Co. next Friday and that Dealer Co. will pay the purchase price with a cashier's check. Owner is an individual with no special knowledge or skill relating to antique watches or jewelry, but Dealer Co. is a corporation specializing in the purchase and sale of antique jewelry. Will Article 2 of the Uniform Commercial Code govern this transaction? a) No, because the parties' agreement is not in writing. b) No, because both parties must be merchants and only one of them is. c) Yes, because the pocket watch is movable at the time of contracting. d) No, because the seller must be a merchant and Owner is not one.
c) Yes, because the pocket watch is movable at the time of contracting.
Seller emailed to Buyer (with electronic signature), "I'm offering my ranch to you for $1,000,000. See the attachment for complete terms." The attachment was a standard real estate purchase agreement, including the stated price and a description of the property. Seller did not intend to make a legal offer that Buyer could accept. In fact, he had sent the same email to four other parties in the hope of triggering a bidding war that would produce an even higher final price. Buyer did not know other people had received the same email. Buyer replied by email (with electronic signature), "I accept." Is there a contract? a) No. A proposal to sell one piece of property sent to four different parties cannot be an offer because it would purport to empower all four parties to accept an offer that, as a practical matter, could only be accepted by one person. b) No, because it would not be reasonable for a person in Buyer's position to believe that a message as informal as an email could constitute an offer from Seller. c) Yes, because a party is bound by his use of the term offer whether or not he understood the legal significance of the term. d) Yes, because it would be reasonable for a person in Buyer's position to understand that Seller had made an offer Buyer could accept.
d) Yes, because it would be reasonable for a person in Buyer's position to understand that Seller had made an offer Buyer could accept.
Vendor emailed Purchaser, "I will sell you my 50-acre property, Blackacre, for $400,000, escrow to close in 30 days. This offer will expire in one week." Purchaser immediately emailed back, "I was hoping for a price more in the neighborhood of $350,000. Would you consider that price?" Vendor responded, "No. The price is firm." Purchaser replied, "OK, I accept your $400,000 offer." Vendor responded, "Sorry; it's too late." Do Purchaser and Vendor have a contract? a) No. Purchaser and Vendor do not have a contract, because Purchaser's first response to Vendor's offer was a rejection and a counteroffer. b) Yes. Purchaser and Vendor do have a contract, because Purchaser had an option. c) No. Purchaser and Vendor do not have a contract, because Purchaser did not possess an option. d) Yes. Purchaser and Vendor do have a contract, because Purchaser's first response to Vendor's offer is not a counteroffer.
d) Yes. Purchaser and Vendor do have a contract, because Purchaser's first response to Vendor's offer is not a counteroffer.
On Friday, the 15th, Owner sent the following letter to Repairman: My car hasn't been running very well lately. I'll pay you $275 if you'll change the oil, replace the oil filter, and adjust the fuel injection system. s/ Owner Repairman received Owner's letter on the 18th. That day, he telephoned Auto Supply and ordered the necessary parts and materials to perform the repair work. Two days later, Repairman and Owner met at a party, and the following conversation ensued: Owner: Disregard the letter I sent you last week. I don't want t he work done anymore. Repairman: No way, man; I already ordered the parts from Auto Supply. Owner: Sorry, but I sold the car yesterday, so forget about the repair work. If Repairman brings an action against Owner for breach of contract, which of the following arguments best supports Owner's claim that no enforceable agreement was formed between him and Repairman? a) Although Repairman had begun getting ready to do the repair work, he had not yet actually started repairing the car when Owner revoked his offer. b) Since Owner made his offer by letter, Repairman could only accept by sending a letter in return. c) Repairman had not completed performance before Owner revoked his offer. d) Owner's offer could only be accepted by Repairman's making a return promise to do the repair work.
a) Although Repairman had begun getting ready to do the repair work, he had not yet actually started repairing the car when Owner revoked his offer.
Norma arrives at her home driving a new car. Seeing her arrival, Nicholas walks across the street to chat with his neighbor about the purchase. Nicholas says to Norma, "What are you going to do with your old car? I am interested in buying it. Is it for sale?" Norma replies, "I was planning to give it to my son, but I might consider selling it for $5,000." Nicholas responds, "I wish you would take $4,000, but I agree to buy it for $5,000." Norma refuses to sell Nicholas the old car, and Nicholas sues for breach of contract. In any action against Norma, Nicholas will a) Lose, because Norma never made either an offer or an acceptance. b) Lose, because Nicholas never made either an offer or an acceptance. c) Win, because Nicholas made an offer that Norma accepted. d) Win, because Norma made an offer and Nicholas accepted.
a) Lose, because Norma never made either an offer or an acceptance.
Seller made an offer to sell Greenacre to Buyer by letter which Buyer received on June 1. On June 2, Seller mailed a letter to Buyer, revoking the offer. Late that same day (June 2), Buyer decided he would accept the offer, and he wrote a letter of acceptance and placed it in his briefcase intending to mail it the next day. On June 3, Buyer mailed his letter of acceptance. On June 4, Buyer received Seller's revocation. On June 5, Seller received Buyer's acceptance. Did a contract form between Buyer and Seller? a) Yes, the contract formed on June 3. b) Yes, the contract formed on June 2. c) No, Seller effectively revoked his offer on June 2. d) No, Seller effectively revoked his offer on June 4
a) Yes, the contract formed on June 3.
Lawyer and Carpenter had discussed Carpenter's installing built-in cabinetry and bookcases in Lawyer's office. On Friday, Lawyer sent the following email message to Carpenter: "I have considered the two plans you showed me, and I have decided on Option B. I agree to pay the $25,000 price you quoted me. Next week I will be out of town trying a case and not easily reachable. So, if you are willing to do the job, you should start work on Monday. My secretary will be in the office at 9:00 a.m., and she can let you into the office so you can begin working." Carpenter did not reply to this message, but on Monday morning he arrived at Lawyer's office. Lawyer's secretary admitted him to the office, and Carpenter began building the cabinetry and bookcases. Which of the following best expresses the legal relationship of the parties? a) Lawyer is entitled to revoke his offer without committing a breach, but if Carpenter fails to complete the carpentry work he will be liable to Lawyer for breach of contract. b) Lawyer must hold open his offer for a reasonable period of time, but Carpenter may stop building the cabinetry and bookcases without incurring any liability for breach of contract. c) Both parties are contractually bound, so Lawyer will commit a breach if he refuses to honor his promise to pay, and Carpenter will commit a breach if he ceases building the cabinets and bookcases. d) Neither Lawyer nor Carpenter owes any contractual obligation to the other.
b) Lawyer must hold open his offer for a reasonable period of time, but Carpenter may stop building the cabinetry and bookcases without incurring any liability for breach of contract.
On June 1, Seller made an offer to sell Greenacre to Buyer, stating "this offer may be accepted until June 6." Unknown to Buyer, Seller then sold Greenacre to Luce on June 3. On June 5, Buyer had a conversation with Friend and Friend said, "Seller just sold Greenacre to Luce." Buyer immediately wrote out his acceptance and ran to Seller's office to present his acceptance directly to Seller late in the day on June 5. Did a contract form between Seller and Buyer? a) No, because the offer terminated when Seller sold Greenacre to Luce on June 3. b) No, because the offer terminated on June 5 when Buyer learned from Friend about Seller's sale of Greenacre to Luce. c) Yes, because the information Buyer learned from Friend did not come directly from Seller, and this indirect acquisition of information is insufficient to terminate the offer. d) Yes, because Buyer's statement "this offer may be accepted until June 6" made his offer irrevocable until June 6, and Buyer accepted before that date.
b) No, because the offer terminated on June 5 when Buyer learned from Friend about Seller's sale of Greenacre to Luce.
Landlord owns a downtown office building, and Law Firm is interested in leasing office space in the downtown area. In exchange for $5,000, Landlord grants Law Firm a written option to lease the thirty-third (33rd) floor of the building for five years at $35 per square foot, the option to expire on May 31 at 5:00 p.m. After finding several cheaper locations, on May 15, Law Firm told Landlord, "We like the location but not the price. We'll lease the space for $30 per square foot." Landlord replied, saying, "Sorry; that's my rock bottom price. Take it or leave it." On May 30, Law Firm sent Landlord a letter, saying, "We hereby exercise our option to lease the 33rd floor." The letter was postmarked May 30, and it was delivered to Landlord on June 2. Which of the following statements most accurately expresses the rights of the parties? a) There is no lease for the office space, because on May 15 Law Firm made a counteroffer, thereby rejecting Landlord's offer to lease at $35/square foot. b) There is no lease for the office space, because Law Firm's purported acceptance was delivered too late. c) There is no lease for the office space, because acceptance by mail was not a proper mode of acceptance. d) Law Firm has successfully exercised its option to lease the space in Landlord's building, because it sent its acceptance by mail before the expiration of the option.
b) There is no lease for the office space, because Law Firm's purported acceptance was delivered too late.
Buyer sent a signed letter to Seller that stated: "Ship 100 boxes of nails at $3 per box, the price quoted in your circular." Seller mailed Buyer a signed form acknowledgment that agreed to Buyer's terms and stated on the reverse side: "All disputes regarding the quality of this merchandise shall be submitted to arbitration." Buyer did not reply to Seller's acknowledgment, and Seller shipped the nails. When Buyer received the nails, it found their quality to be unsatisfactory and sued Seller for breach of warranty. Seller has asked an attorney whether the parties' contract requires arbitration of Buyer's claim. What is the best advice the attorney can provide? a) A contract was formed pursuant to conduct when Buyer received the nails, and a court would exclude the arbitration provision from the contract. b) No contract exists, because the arbitration term in Seller's acknowledgment created a counteroffer that Buyer never accepted. c) A contract was formed when Seller mailed its acknowledgment, and the court must decide whether the arbitration term should be excluded as a material alteration of the contract. d) A contract was formed when Seller mailed its acknowledgment, and the arbitration term became part of the contract.
c) A contract was formed when Seller mailed its acknowledgment, and the court must decide whether the arbitration term should be excluded as a material alteration of the contract.
Breeder made the following offer during a phone call with Farmer, "I will sell you two thousand Rhode Island Red hens* for $4.50 each, a total of $9,000." Farmer told Breeder he would think about it and get back to Breeder in two days. Breeder replied, "OK; I will do nothing until I hear from you." After two hours of thinking about whether he could afford the chickens, Farmer decided to buy the chickens and called Breeder. Before Farmer could tell Breeder he agreed to buy the chickens, Breeder told Farmer he had just sold the chickens to another buyer. The Farmer was furious and said, "Breeder, I accept your offer to sell me the chickens. You told me you would sell me the chickens and gave me two days to get back to you. Only two hours have passed!" Did Breeder breach an agreement between him and Farmer? a) No. Breeder's offer to sell the chickens lapsed at the end of the parties' telephone conversation. b) Yes. Breeder made an enforceable firm offer not to revoke his offer for two day, and Farmer accepted within the two-day period. c) No. Breeder's promise to not sell the chickens for two days was not binding either as an option contract or as a firm offer, so Breeder was entitled to revoke his offer before Farmer accepted it. d) Yes. Breeder granted Farmer a two-day option contract, and Farmer accepted within that two-day period.
c) No. Breeder's promise to not sell the chickens for two days was not binding either as an option contract or as a firm offer, so Breeder was entitled to revoke his offer before Farmer accepted it.
On December 1, Store advertised in the local newspaper that it had a big screen TV, regularly priced at $2,000, on sale for $100 "on December 3 only, to the first twenty shoppers." The price "$100" was a typographical error. Store intended to put the TV on sale for $1,000, but a typist mistakenly omitted a zero. Store advertised on December 2 in the same newspaper as follows: "CORRECTION: Our advertisement listing a big screen TV on sale for $100 was in error. The correct price is $1,000." Shopper read the advertisement on December 1, but he did not buy or read the December 2 newspaper and did not learn of the correction. Shopper arrived at Store on December 3 and was first in line to buy the big screen TV. The store refused to sell the TV to him for less than $1,000. Does Shopper have a right to purchase the TV for $100 under the common law of contracts? a) Yes. An offer publicized by an advertisement for general distribution is revocable only by actual notice to every offeree who learned of the offer. b) No. An advertisement published for general distribution and not directed to a particular individual is not an offer to make a contract. c) No. Store effectively revoked its offer as to all potential offerees by publishing its revocation in the same medium it used to publicize the offer. d) Yes. An offer publicized by an advertisement for general distribution is revocable only to the extent it has not induced reliance, and Shopper relied on the offer by arriving at Store early in the morning.
c) No. Store effectively revoked its offer as to all potential offerees by publishing its revocation in the same medium it used to publicize the offer.
After several days of negotiations, Owner wrote to Contractor: "Will pay you $300,000 if you will do the remodeling work in my office building according to the specifications enclosed. I must have your reply in writing by September 30." Contractor replied by a letter that Owner received on September 15: "Will not do it for less than $350,000." On September 20, Contractor wrote to Owner: "I've changed my mind. I will do the work for the $300,000 price. Unless I hear from you to the contrary by September 30, I will begin work on October 5." Owner received this letter on September 22 but did not reply to it. Contractor, without Owner's knowledge, began the work on October 5. Which of the following statements best characterizes the legal relationship between Owner and Contractor on October 5? a) You Answered A contract was formed on September 30 when Owner failed to object to Contractor's proposal to do the work in accordance with Owner's original offer. b) A contract was formed on September 22 when Owner received Contractor's September 20 letter. c) There is no contract between the parties as of October 5. d) A contract was formed on October 5 when Contractor commenced the remodeling work.
c) There is no contract between the parties as of October 5.
A toy collector had purchased 10 antique toys over the last several years and had had them restored by an expert in toy restoration. On June 1, the collector sent the 11th antique toy to the expert with a signed note that read: "Here is another toy for you to restore. As with all prior jobs, I will pay $500 for the work, but no more." On June 4, after receipt of the collector's June 1 note and the toy, the expert began restoring the toy. On June 6, the collector unexpectedly died. On June 7, unaware of the collector's death, the expert sent the collector a note that stated that the restoration work had begun on June 4. The following day, the expert learned of the collector's death. Does a contract exist that binds the expert and the collector's estate? a) No, because the offer lapsed when the collector died. b) No, because the collector died before the expert sent the June 7 note. c) Yes, because the offer was accepted before the collector's death. d) Yes, because the expert sent the June 7 note before learning of the collector's death.
c) Yes, because the offer was accepted before the collector's death.
Buyer sent Seller a purchase order that stated, "Ship 5,000 large plastic bottles at your current list price." The purchase order said nothing about liability for damages if Seller should breach. Seller sent Buyer an acknowledgement form confirming it would send 5,000 large plastic bottles at the listed price. The acknowledgement form was identical to the purchase order except for the following two provisions: 1. "Seller shall not be liable for consequential damages." 2. "Seller's acceptance is hereby expressly made conditional on purchaser's assent to any additional and different terms contained in this Acknowledgement." Buyer did not respond to Seller's acknowledgement. A week later, Seller sent Buyer the following email message: "We regret we cannot fill your order due to the unavailability of materials from our suppliers." Which of the following statements best expresses the relationship of the parties? a) A contract was formed when Seller mailed sent its acknowledgement form, and the disclaimer of consequential damages became a part of the contract. b) A contract was formed when Seller mailed its acknowledgement form, and whether the disclaimer of consequential damages became a part of the contract will depend upon whether it materially altered the terms contained in Buyer's purchase order. c) A contract was formed when Seller mailed its acknowledgement form, but the disclaimer of consequential damages was merely a proposal for additional terms which Buyer did not accept. d) No contract exists, because Seller's acknowledgement form will be a counteroffer that Buyer never accepted.
d) No contract exists, because Seller's acknowledgement form will be a counteroffer that Buyer never accepted.
