BLAW 6
Siddle purchased a quantity of fireworks from Red Devil Fireworks Co. The sale was illegal, however, because Siddle did not have a license to make the purchase, which the seller knew because it had been so informed by the attorney general of the state. Siddle did not pay for the fireworks, and Red Devil sued him. He defended on the ground that the contract could not be enforced because it was illegal. Was the defense valid? [Red Devil Fireworks Co. v. Siddle, 648 P.2d 468 (Wash. App.)] Void or no void?
Illegal sale and contract is void
Smith was employed as a salesman for Borden, Inc., which sold food products in 63 counties in Arkansas, 2 counties in Missouri, 2 counties in Oklahoma, and 1 county in Texas. Smith's employment contract prohibited him from competing with Borden after leaving its employ. Smith left Borden and went to work for a competitor, Lady Baltimore Foods. Working for this second employer, Smith sold in 3 counties of Arkansas. He had sold in 2 of these counties while he worked for Borden. Borden brought an injunction action against Smith and Lady Baltimore to enforce the noncompete covenant in Smith's former contract. Was Borden entitled to the injunction? [Borden, Inc. v. Smith, 478 S. W.2d 744 (Ark.)] is the non-compete valid or not?
It is not valid
John Iwen sued U.S. West Direct because of a negligently constructed yellow pages advertisement. U.S. West Direct moved to stay litigation and compel arbitration under the yellow pages order form, which required advertisers to resolve all controversies through arbitration, but allowed U.S. West (the publisher) to pursue judicial remedies to collect amounts due it. Under the arbitration provision, Iwen's sole remedy was a pro rata reduction or refund of the cost of the advertisement. The order form language was drafted by U.S. West Direct on a take-it-or-leave-it basis and stated in part: Any controversy or claim arising out of or relating to this Agreement, or breach thereof, other than an action by Publisher for the collection of amounts due under this Agreement, shall be settled by final, bind- ing arbitration in accordance with the Commercial Arbitration rules of the American Arbitration Association. If forced to arbitration, Iwen would be unable to recover damages for the negligently constructed yellow pages ad, nor could he recover damages for infliction of emotional distress and punitive damages related to his many efforts to adjust the matter with the company, which were ignored or rejected. Must Iwen have his case resolved through arbitration rather than a court of law? [Iwen v. U.S. West Direct, 977 P.2d 989 (Mont.)]
RESOLVED IN COURT OF LAW. IT IS UNSCIONABLE
Martin made an oral contract with Cresheim Garage to work as its manager for two years. Cresheim wrote Martin a letter stating that the oral contract had been made and setting forth all of its terms. Cresheim later refused to recognize the contract. Martin sued Cresheim for breach of reason the farm cannot be sold." The seller later stated that she had changed her mind and would not sell, and she offered to return the deposit. The buyer refused to take the deposit back and brought suit to enforce the contract. The seller contended that the "any reason" provision extended to anything, including the seller's changing her mind. Was the buyer entitled to recover? [Phillips v. Rogers, 200 S.E.2d 676 (W. Va.)] Is ir binding or not
The contract is binding but Martin could get out of it cuz he didn't sign it
Radio Station KSCS broadcast a popular music program. It announced that it would pay $25,000 to any listener who detected that it did not play three consecutive songs. Steve Jennings listened to and heard a program in which two songs were followed by a commercial program. He claimed the $25,000. The station refused to pay on the ground that there was no consideration for its promise to pay that amount. Was the station liable? [Jennings v. Radio Station KSCS, 708 S.W.2d 60 (Tex. App.)] is the contract valid or not?
contract is valid
Nelson wanted to sell his home. Baker sent him a written offer to purchase the home. Nelson made some changes to Baker's offer and wrote him that he, Nelson, was accepting the offer as amended. Baker notified Nelson that he was dropping out of the transaction. Nelson sued Baker for breach of contract. Decide. What social forces and ethical values are involved? [Nelson v. Baker, 776 S.W.2d 52 (Mo. App.)]
contract void
A. H. Zehmer discussed selling a farm to Lucy. After a 40-minute discussion of the first draft of a contract, Zehmer and his wife, Ida, signed a second draft stating: "We hereby agree to sell to W. O. Lucy the Ferguson farm complete for $50,000 title satisfactory to buyer." Lucy agreed to purchase the farm on these terms. Thereafter, the Zehmers refused to transfer title to Lucy and claimed they had made the contract for sale as a joke. Lucy brought an action to compel performance of the contract. The Zehmers claimed there was no contract. Were they correct? [Lucy v. Zehmer, 84 S.E.2d 516 (Va. App.)]
contract; can't be void
Lester purchased a used automobile from MacKintosh Motors. He asked the seller if the car had ever been in a wreck. The MacKintosh salesperson had never seen the car before that morning and knew nothing of its history but quickly answered Lester's question by stating: "No. It has never been in a wreck." In fact, the auto had been seriously damaged in a wreck and, although repaired, was worth much less than the value it would have had if there had been no wreck. When Lester learned the truth, he sued MacKintosh Motors and the salesperson for damages for fraud. They raised the defense that the salesperson did not know the statement was false and had not intended to deceive Lester. Did the conduct of the salesperson constitute fraud?
fraud
Dozier and his wife, daughter, and grandson lived in the house Dozier owned. At the request of the daughter and grandson, Paschall made some improvements to the house. Dozier did not authorize these, but he knew that the improvements were being made and did not object to them. Paschall sued Dozier for the reasonable value of the improvements, but Dozier argued that he had not made any contract for such improvements. Was he obligated to pay for such improvements?
has to pay
Physicians Mutual Insurance Co. issued a policy covering Brown's life. The policy declared that it did not cover any deaths resulting from "mental disorder, alcoholism, or drug addiction." Brown was killed when she fell while intoxicated. The insurance company refused to pay because of the quoted provision. Her executor, Savage, sued the insurance company. Did the insurance company have a defense? [Physicians Mutual Ins. Co. v. Savage, 296 N.E.2d 165 (Ind. App.)]
insurance company must pay
Katherine mailed Paul an offer with definite and certain terms and that was legal in all respects stating that it was good for 10 days. Two days later she sent Paul a letter by certified mail (time stamped by the Postal Service at 1:14 P.M.) stating that the original offer was revoked. That evening Paul e-mailed acceptance of the offer to Katherine. She immediately phoned him to tell him that she had revoked the offer that afternoon, and he would surely receive it in tomorrow's mail. Was the offer revoked by Katherine?
no ; offer wasn't revoked
Brown made an offer to purchase Overman's house on a standard printed form. Underneath Brown's signature was the statement: "ACCEPTANCE ON REVERSE SIDE." Overman did not sign the offer on the back but sent Brown a letter accepting the offer. Later, Brown refused to perform the contract, and Overman sued him for breach of contract. Brown claimed there was no contract because the offer had not been accepted in the manner specified by the offer. Decide. [Overman v. Brown, 372 N.W.2d 102 (Neb.)]
no contract
While Clara Novak was sick, her daughter Janie helped her in many ways. Clara died, and Janie then claimed that she was entitled to be paid for the services she had rendered her mother. This claim was opposed by three brothers and sisters who also rendered services to the mother. They claimed that Janie was barred because of the presumption that services rendered between family members are gratuitous. Janie claimed that this presumption was not applicable because she had not lived with her mother but had her own house. Was Janie correct? [In re Estate of Novak, 398 N.W.2d 653 (Minn. App.)]
no contract
High-Tech Collieries borrowed money from Holland. High-Tech later refused to be bound by the loan contract, claiming the contract was not binding because it had been obtained by duress. The evidence showed that the offer to make the loan was made on a take-it-or-leave-it basis. Was the defense of duress valid? [Holland v. High- Tech Collieries, Inc., 911 F. Supp. 1021 (N.D. W.Va.)]
no duress
Buster Cogdill, a real estate developer, made an offer to the Bank of Benton to have the bank provide construction financing for the development of an outlet mall, with funds to be provided at prime rate plus two percentage points. The bank's president Julio Plunkett thanked Buster for the proposal and said, "I will start the paperwork." Did Cogdill have a contract with the Bank of Benton? [Bank of Benton v. Cogdill, 454 N.E.2d 1120 (Ill. App.)]
no must be a clear acceptance
Charles Sanarwari retained Stan Gissel to prepare his income tax return for the year 2006. The parties agreed on a fee of $400. Charles had done a rough estimate based on last year's return and believed he would owe the IRS approximately $2,000. When Stan's work was completed, it turned out that Charles would receive a $2,321 tax refund. Stan explained how certain legitimate advantages were used to reduce Charles's tax obligation. Charles paid for Stan's services and was so pleased with the work that he promised to pay Stan an additional $400 for the excellent job on the tax return when he received his tax refund. Thereafter, Stan and Charles had a falling out over a golf tournament where Charles was late for his tee time and Stan started without him, causing Charles to lose an opportunity to win the club championship. Stan was not paid the $400 promised for doing an excellent job on the tax return, and he sued Charles as a matter of principle. Decide. is there a new contract? void or no void
no new contract; void
Willis Music Co. advertised a television set at $22.50 in the Sunday newspaper. Ehrlich ordered a set, but the company refused to deliver it on the grounds that the price in the newspaper ad was a mistake. Ehrlich sued the company. Was it liable? Why or why not? [Ehrlich v. Willis Music Co., 113 N.E.2d 252 (Ohio App.)]
no offer just an ad
When Harriet went away for the summer, Landry, a house painter, painted her house. He had a contract to paint a neighbor's house but painted Harriet's house by mistake. When Harriet returned from vacation, Landry billed her for $3,100, which was a fair price for the work. She refused to pay. Landry claimed that she had a quasi-contractual liability for that amount. Was he correct?
no; officious intermedler
Bernie and Phil's Great American Surplus store placed an ad in the Sunday Times stating, "Next Saturday at 8:00 A.M. sharp, 3 brand new mink coats worth $5,000 each will be sold for $500 each! First come, First served." Marsha Lufklin was first in line when the store opened and went directly to the coat department, but the coats identified in the ad were not available for sale. She identified herself to the manager and pointed out that she was first in line in conformity with the store's advertised offer and that she was ready to pay the $500 price set forth in the store's offer. The manager responded that a newspaper ad is just an invitation to negotiate and that the store decided to withdraw "the mink coat promotion." Review the text on unilateral contracts in Section 12(B) of Chapter 12. Decide.
store must give her the minic coat has essential terms
Kelly made a written contract to sell certain land to Brown and gave Brown a deed to the land. Thereafter, Kelly sued Brown to get back a 20-foot strip of the land. Kelly claimed that before making the written contract, it was agreed that Kelly would sell all of his land to Brown to make it easier for Brown to get a building permit, but after that was done, the 20-foot strip would be reconveyed to Kelly. Was Kelly entitled to the 20-foot strip? What ethical values are involved? Is it void or not void
void
Sarah's house caught on fire. Through the prompt assistance of her neighbor Odessa, the fire was quickly extinguished. In gratitude, Sarah promised to pay Odessa $1,000. Can Odessa enforce this promise? void or no void
void
William E. Story agreed to pay his nephew, William E. Story II, a large sum of money (roughly equivalent to $50,000 in 2007 dollars) "if he would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should come to be 21 years of age." William II had been using tobacco and occasionally drank liquor but refrained from using these stimulants over several years until he was 21 and also lived up to the other requirements of his uncle's offer. Just after William II's 21st birthday, Story acknowledged that William II had fulfilled his part of the bargain and advised that the money would be invested for him with interest. Story died, and his executor, Sidway, refused to pay William II because he believed the contract between Story and William II was without consideration. Sidway asserted that Story received no benefit from William II's performance and William II suffered no detriment (in fact, by his refraining from the use of liquor and tobacco, William II was not harmed but benefited, Sidway asserted). Is there any theory of consideration that William II can rely on? How would you decide this case? [Hamer v. Sidway, 124 N.Y. 538] void or no void
void
Helen, age 17, wanted to buy a Harley-Davidson "Sportster" motorcycle. She did not have the funds to pay cash but persuaded the dealer to sell the cycle to her on credit. The dealer did so partly because Helen said that she was 22 and showed the dealer an identification card that falsely stated her age as 22. Helen drove the motorcycle away. A few days later, she damaged it and then returned it to the dealer and stated that she disaffirmed the contract because she was a minor. The dealer said that she could not because (1) she had misrepresented her age and (2) the motorcycle was damaged. Can she avoid the contract?
yes can void