Bus Law End 2

Which of the following contracts is not required to be in writing under the Statute of Frauds?

A contract to buy a couch for $450.

Which of the following contracts is governed by Article 2 of the Uniform Commercial Code?

A contract to buy an antique Ford Edsel car.

Which of the following is/are required to establish promissory estoppel?

A promise made by the defendant. Plaintiff's reliance on the defendant's promise. Establishing that the only way to avoid injustice is to enforce the promise. Correct All of the above

Stella, age 16, buys a car from Dixwell Auto Dealers. She pays $1,500 for the car. It turns out that the car is really worth $2,500. Dixwell wants to disaffirm the contract and get the car back. Which of the following best describes this situation?

Because Stella is a minor, this contract is voidable by Stella

Betty, a 16-year-old minor, buys a snowmobile from Susan, an adult, for $3,000. Betty uses it for 10 months and then advertises the snowmobile for sale for $3,500 but has not yet sold it. At this point:

Betty can still disaffirm the contract.

Stan is trying to sell his 2005 Nissan car with 100,000 miles on it. He places an ad for it on Craigslist for $3,000. Stan describes the car in the ad as being "well-maintained and in excellent condition." Bob sees Stan's ad and is interested in buying the car. Before buying it, Bob has the car inspected by his mechanic with Stan present when the mechanic says, "Bob, you know, this car has 100,000 miles on it. The timing chain needs to be replaced immediately. Otherwise, it's in excellent condition." Bob buys the car, does not have the timing chain replaced immediately and the following week the timing chain gives out which ruins the engine. The car has to be towed to the mechanic's shop and the repair estimate is $2,000. If Bob sues Stan to recover the $2,000 repair cost, which of the following statements is true?

Bob cannot recover the $2,000 from Stan because even if Stan knew the car needed a new timing chain, Bob didn't rely on Stan's representations with regard to the car's condition.

Buyer and Seller orally agree to the sale of a parcel of land for $200,000: one-half of the purchase price payable now with the balance of the purchase price payable in 30 days at the time of closing when the title will be transferred. They agree that the Buyer is to have possession immediately so he can start construction. At the time they enter into this oral agreement, Buyer pays Seller $100,000 of the purchase price, takes possession of the land, and starts building a house. At the time of the scheduled closing 30 days later, Buyer has made a substantial beginning on the house. However, Seller refuses to transfer the title, claiming the oral contract is not enforceable. Under these circumstances which of the following is true:

Buyer can make a good argument that the oral agreement is enforceable under the part performance exception to the statute of frauds.

Joe buys an Otterhound named Barky, from Purity Dog Shop. He pays $2,500 for the puppy, the high cost due to the certificate Purity gives him, indicating that the puppy's parents were both AKC champions (elite dogs). Two months later, Joe sells the hound to Emily for $2,800. Joe and Emily both believe that Barky is descended from champions. Then a state investigation reveals that Purity has been cheating and its certificates are fakes. Barky is a mixed-breed dog, worth about $100. Emily sues Joe. What is the likely result?

Emily will win based on mutual mistake of fact and will be entitled to rescind the contract

Bob owns a chain of furniture stores. He has placed an order to buy 200 mattresses from Moe's Mattress Wholesale Company at a cost of $200 each for a total contract price of $40,000. When the 200 mattresses are delivered, 10 of them are slightly damaged. When Bob discovers this, he contacts Moe to tell him of the damage and the following conversation takes place: Bob: "Moe, you know we've done business together for 15 years and we've always done right by each other. Well, this last shipment of mattresses has a problem. Ten of them are damaged so I can't sell them in my stores. It's up to you how we handle this. Either you can pick up these ten mattresses and we'll pay you $38,000 for the 190 mattresses in good condition or you can leave them with me and we'll pay you $38,500 for all 200 mattresses including the ten damaged ones. I can always sell these ten at a deep discount in my furniture pit stores. "Moe: "Gee, Bob, I'm sorry about that. You go ahead and keep all 200 mattresses and pay us the $38,500. That sounds fair to me." They both sign a modification agreement documenting their conversation. Under these circumstances, the modification to the original contract is:

Enforceable as a settlement of an amount in dispute known as an accord and satisfaction.

Mike, who is 17 years old, buys a motorcycle from Cycle Sellers, Inc. Assume that Mike pays $3,000 and that the fair value of the motorcycle at the time of purchase is $4,500. Which of the following is true?

Even if Mike signs a statement as part of the contract that states, "I agree not to disaffirm this contract," Mike may still disaffirm when he is 17 years old

Stuart was selling Gary some land he owned in Minnesota. Gary is a keen golfer and stays in shape by swimming at least 3 miles a day. Stuart told Gary that the developer had agreed to build a golf course and swimming pool in the subdivision as part of the development, and that other improvements would be made soon. Stuart knew that none of these improvements existed and none were planned. Gary was thrilled about the planned golf course and pool. Gary believed Stuart and, based on Stuart's statements, Gary bought the land for $100,000 when it was really only worth $20,000 without these improvements. Gary learns of the error and sues Stuart for fraud. Which of the following statements best describes this situation?

Gary can rescind the contract or recover damages because this is clearly fraud.

Jim wants to start his own business and needs $10,000 for working capital. He applies for a business loan at FirstBank. The banker tells Jim that the Bank will make the loan if Jim's father will personally guarantee repayment of the loan. Jim assures the banker that his father will do this. The banker calls Jim's father to confirm that he will guarantee Jim's $10,000 loan. Jim's father says: "Sure thing, I'd do anything for that boy." The bank makes the loan to Jim. Jim's new business is not successful and Jim is unable to repay the loan. Jim has no money. Jim's father has buckets of money. The bank sues Jim's father to recover the unpaid amount of the loan plus interest plus attorneys' fees and costs of collecting the debt. Which of the following is true?

Jim's father can make a strong argument that he is not liable to pay his son's debt because the Bank did not have him sign a written guaranty agreement.

Mark was shopping for a used car in February. He went to AutoMegaWorld and test drove a used 2014 Tiger XL. While driving the car, he looked at the climate control center and noticed that the temperature lever was marked "cold" at one end in blue and "hot" in red at the other end. Mark assumed that the "cold" marking meant that the car had air conditioning. Mark wanted to finally have an air-conditioned car. He did not discuss air conditioning in any way with the salesperson. Mark bought the car. Later, when Mark was showing his new car to friends, one of them pointed out to him that the car was not air conditioned. Which of the following statements best describes this situation?

Mark cannot rescind the contract because this is a unilateral mistake by Mark.

Mrs. Smith was pleased to see little Mary Jackson standing outside the supermarket selling Girl Scout Cookies. Mary asked Mrs. Smith if she would like to buy 4 boxes of shortbread cookies again this year and Mrs. Smith said yes: "put me down for my usual 4 boxes, Mary." Mary thanked Mrs. Smith and told her that the money would help the Girl Scout Foundation in its charitable projects. Mary told Mrs. Smith that she would deliver the cookies in 3 weeks and would collect the money then. When Mary came back with the cookies, Mrs. Smith told her that she had changed her mind now that the doctor had told her that her blood sugar was too high. She wouldn't buy the cookies. Which of the following statements is true under these facts:

Mrs. Smith is not legally obligated to purchase the cookies under the doctrine of promissory estoppel.

Carla graduated from Central High School and has always had fond memories of her time there. After several years of volunteering her time and making small donations to the school, Carla decided to make a larger donation. Carla, having made lots of money in her career and owing thanks to the high school for making it all possible, agrees to donate $1 million for the purpose of starting a new college prep program for underprivileged students. Upon receiving Carla's pledge agreement, the school district took out a construction loan and built an extension to the library and hired a college prep guidance counselor. Six months later, when Carla's first installment payment was due, she notified the school district that she had decided to donate her money to her former university instead of the high school. Which of the following arguments would support the school disctrict's attempt to enforce the pledge agreement?

Nothing - gift promises are always unenforceable Promissory Estoppel Moral consideration Correct Both B and C

Samantha is a philanthropist and regularly donates large amounts of money to charities in her town, Middlesborough. She is on the Board of Trustees of the Middlesborough Symphony Orchestra and for ten years has donated to the annual pledge drive. In 2014 she agreed to contribute $20,000 to the Symphony and signed a Pledge Card agreeing to make the contribution in two installments, $10,000 on May 1, 2014 and $10,000 on November 1, 2014. The Symphony did not make any specific plans in reliance on this pledge. Samantha made the first payment. In the summer, Samantha had an argument with several other members of the Board of Trustees and she resigned from the Board. (The argument had nothing to do with Symphony business.) Samantha sent a letter to the Symphony advising them that she had found a much better use for the $10,000 and would not be making payment on the balance of the pledge. The remaining members of the Board of Trustees are disappointed with this decision and are considering suing Samantha for the $10,000 remaining contribution. If they bring suit against Samantha, the most likely result will be:

Samantha will win the suit and will not have to make the $10,000 contribution.

Betty saw a 'For Sale' sign on her colleague Stan's condo. Betty had always admired Stan's condo and asked him what he would take for it. Stan told her that he was asking $100,000 for it. Betty said that she was prepared to pay $95,000 for the condo and Stan agreed. They orally agreed on all the other aspects of the transaction (including an inspection contingency, down payment and closing date). Betty sent Stan a signed letter agreement along with the deposit check. The letter agreement detailed all the terms they had agreed upon. Stan called Betty the day he received her letter to acknowledge receipt of the deposit and he told her how pleased he was that she was buying his condo. A week before the closing, Betty changed her mind and decided she didn't want to buy Stan's condo. If Stan sues Betty for breach of contract, the most likely result will be:

Stan will win because Betty signed the letter agreement.

Which of the following is/are elements of a cause of action for innocent misrepresentation:

That the defendant made a false statement of material fact. That the plaintiff justifiably relied on the statement. That the defendant intended to deceive the plaintiff. That the defendant exercised undue influence over the plaintiff. Correct a and b.

Thomas owns a business selling high-end computers in bulk to local companies. Most businesses in this industry charge in the range of $2200-$2800 per computer; Thomas charges $2400. One company places an order for 100 computers and Thomas's invoice lists the total cost at $24,000. When Thomas realizes that the correct price should have been $240,000 he attempts to rescind the contract. Which of the following is his best argument?

The $250 price is clearly a mathematical error and Thomas is entitled to rescind.

Professor Gedge entered into a signed written contract with Steve Student in which Gedge agreed, out of the goodness of her heart, that she would give Steve a $25 Starbucks gift card on Monday at noon. Gedge gave Steve the Starbucks gift card. Under these circumstances, which of the following statement(s) is/are true:

The contract made by Gedge and Steve lacks consideration. Gedge was not legally obligated to give Steve the Starbucks gift card. Steve did not provide legal value to Gedge. After giving Steve the Starbucks gift card, Gedge is not legally entitled to rescind the contract. All of the above Correct All of the above.

Linda is a hairstylist who makes a contract with Samantha to style the hair of Samantha and her bridesmaids for Samantha's wedding. In the contract, Linda agrees to provide styling for 6 people total, in exchange for $1200. The day before the wedding, Linda emails Samantha and says that because other stylists would charge at least $1800 for the same job, she is raising the price to $1500. Samantha, knowing she can't find another stylist on such short notice, agrees to the modification. Which of the following is true?

The modification agreement is not enforceable because "other stylists charge more" is not an unforeseen circumstance that provides an exception to the pre-existing duty rule

Steve owns a company that sells branded promotional materials to retailers. Bob owns a retail shop that sells Quinnipiac-branded merchandise. Bob and Steve entered into a contract on October 1 that allows Bob to purchase Quinnipiac hockey jerseys for $30 apiece. Bob sells them in his store for $40. When Quinnipiac's team makes it to the Frozen Four and hockey-fever sweeps the campus, Bob tries to order morer jerseys under the terms of the contract. Steve tells Bob, "Sorry, the price just went up to $50 per jersey because I know I'm the only short-notice supplier you have and you'll have to agree to my prices if you want to have any merchandise in stock." Bob, knowing that Steve is correct in his assertion that there aren't any other suppliers who can get Bob branded jerseys before the end of hockey season, agrees to the new price and signs a modification agreement. After receiving the jerseys and selling almost all of them to his customers, Bob receives Steve's invoice. Instead of paying the new $50 rate, Bob pays $30 for each jersey Steve sent him. Note that this contract and modification agreement are governed by the UCC. Which of the following is true?

The modification agreement is not enforceable because Steve did not act in good faith as required by the UCC in all contract makings.

Bob the builder enters into a signed written contract with Hilda Homeowner. The contract provides that Bob will build a family room addition to Hilda's house. The contract price is a flat fee of $18,500 with all the work to be completed by September 1. On August 15, Bob asks to meet with Hilda. He tells her that he has more work than he can handle for the month of August. He tells Hilda that if she wants the work done by September 1, she will have to pay him an additional $2,500. Hilda is very upset about this but doesn't want to delay the construction project past September 1. She agrees and enters into a signed written modification agreement with Bob in which she agrees to pay him an additional $2,500 if the construction is completed by September 1. Which of the following is true:

The second contract at the additional price of $2,500 is unenforceable because it is not supported by consideration.

Michael wants to sell his old house, which he already moved out of, and holds an open house. One visitor, David, loves the house and tells Michael on the spot that he will pay the asking price of $400,000, in cash. Michael and David shake hands, and Michael says "great, I'll cancel my next open house. Let's meet Monday morning and I'll sign over the title to you and collect the cash." Sunday night, David emails Michael and informs him that he bought another house that day and won't be buying Michael's house. Which of the following is true?

There was no enforceable contract because the statute of frauds requires a contract for an interest in land to be in writing

Larry the lawyer is planning to get a divorce from his wife Wanda. Wanda has been an alcoholic for the past five years and Larry has finally had enough. Larry prepares an agreement detailing the terms of their divorce. The agreement provides that Wanda will give up custody of their two children as well as the dog and the hamster. Larry will give Wanda one of their cars and a check for $2,500 and that is all she will get from Larry. Larry has signed the agreement and waits until Wanda is nearly passed out from drinking one night. He asks Wanda to sign the agreement, telling her that it is a tax form that needs to be filed with the IRS. Wanda signs it and then passes out. After filing for divorce, Larry presents this signed Agreement to the Court as a binding contract governing the terms of their divorce. Under these circumstances, what is the likely result:

Wanda will be able to rescind the contract because she was so intoxicated when she signed it that she was not able to understand the nature of the agreement she was signing.