Business Law - Tradition Contract
A minor, unable to live at home, contracts to rent an apartment for one year at $600 per month. After living there for three months, he disaffirms the contract. The reasonable value of that apartment was only $500 per month. Assuming no rent has been paid, the minor must pay:
$1,500; the reasonable value for three months.
Offeror says, "I will sell you my dog for $100. You have a week to decide." Two days later she tells the offeree, "I've changed my mind. I'm keeping the dog." This last statement is:
An effective revocation
Lisa enters into a contract with Acme Groceries, Inc., in which she promises to purchase groceries "as she determines appropriate in the future" from Acme, and Acme promises to sell such groceries to Lisa. This is an example of:
An illusory promise by Lisa
Erin receives an offer in the mail from Susan on July 14 that says, "I will sell you my vacation home for $80,000. You may accept this offer by signing the bottom of this letter and placing it in the mail so that it is postmarked by July 31." Which is true?
Assuming Erin has not paid Susan for an option contract, Susan may revoke the offer at any time so long as she does so before Erin accepts
Mary is a bartender at a local pub. The state in which Mary works requires all bartenders to be licensed. No special education or experience is required, but one must pay $25 per year for the license. Mary was not aware of this, so she did not obtain a license. When her boss found out about this, he refused to pay Mary for the two weeks of work that she had done. Mary sues. What results?
Because this is a revenue raising statute, Mary can collect her wages.
In which of the following situations is there adequate consideration on the part of the promisor to support enforcement of a contract?
Bob, a police officer, promises to drive by your house and check on it during his off-duty time for $100.
Which of the following will not generally automatically terminate an open offer?
Changed economic circumstances.
Cheryl hired Golden Construction Co. to build a house for her. The plans for the house were complex, and expert workmanship was required. After the house was completed, Cheryl liked it so much that she promised to pay Golden a $4,000 bonus. Later, Golden demanded the money, but Cheryl refused to pay it. Golden sues. What is the most probable result?
Cheryl wins; the promise is based on past consideration.
Revocation of an offer may be done anytime prior to acceptance by the offeror.
False
You and Gary enter a contract where you will receive $1,000 if you tamper with a slot machine in the "Bye-Bye Bucks Casino" in Las Vegas so that Gary can make it pay out a jackpot whenever he wants it to. You perform your part of the contract, but Gary doesn't pay. In your breach of contract suit against Gary, the court will:
Ignore the contract and dismiss the case.
Which of the following would be a valid offer?
John tells Rhoda, "I'll give you $500 for your motorcycle."
Susan offered to sell her couch to Martin for $200. Martin said that $200 was too much, but that he would give her $125. Susan said no. Then, Martin said that he would pay Susan the entire $200.
Martin's statement that he would give Susan $125 was a rejection of Susan's original offer. Martin's statement that he would give Susan $125 was an offer by Martin.
The requirement that the terms of the acceptance be the same as those of the offer is the:
Mirror image rule
Frieda is at a Denver Broncos Football game, and she is being bothered by several extremely drunk spectators in nearby seats. She asks a security officer to do something, but the security officer refuses. She then offers the security officer $100 if he'll stop the problem. He agrees, then warns the drunk spectators, after which the problem stops. Frieda refuses to pay the security officer. Is there sufficient consideration in this agreement?
No, because one of the parties did not suffer legal detriment.
Julie buys an auto from John when she is 17. When she turns 21, Julie decides that she does not want the automobile. The age of majority in Julie's state is 18. Can Julie disaffirm this contract?
No; Julie had a "reasonable time" within which to disaffirm the contract, but a "reasonable time" has passed.
Ricky signs a 2-year contract to play basketball for the Jolters, for $100,000 per game. Right before a big game, Ricky goes to the owner and says that he will not play unless the owner pays him an additional $5,000 per game. The owner, being desperate, agrees. Now that the season is over, Ricky demands his additional compensation, but the owner refuses to pay. Ricky sues. Most likely:
Owner wins; Ricky was under a prior duty to play basketball, so Ricky's new promise is not supported by consideration.
At age 16, Phil bought a car from Acme Auto Co. for $2,500. Phil drove the car for about six months, and then he had an accident. The damage to the auto was $1,500. In addition, the value of the auto before the accident was only $2,000. The accident was not Phil's fault. Phil wishes to disaffirm the contract. Which of the following best describes this situation?
Phil can disaffirm the contract and recover the entire $2,500.
Mary promises to give her car to her friend. The friend sells his current car for a fairly low price because he is expecting to get a nearly new car from his rich and generous friend, Mary. Mary changes her mind and decides to keep the car. If the friend sues Mary, the court most likely will:
Require Mary to pay damages to the friend for any loss he incurred in connection with Mary not keeping her promise.
Marilyn decides to sell the diamond broach she inherited from her grandmother at an auction "with reserve." Can she withdraw the broach from sale?
She can withdraw the broach any time before the auction announces it has been sold.
Caterer agrees with Bride to cater Bride's wedding reception for $12 per plate. On the wedding day, Caterer calls Bride saying that some things have come up, and she will have to charge $16 a plate in order to do the catering. Bride agrees. Which is true?
The $16 is not enforceable because of a preexisting duty.
Anita offered to sell her condo to Bill. Before Bill could accept, one of the parties was killed in a car accident. The remaining party wishes to go through with the contract. Which of the following best describes this situation?
The death of either party terminated the offer.
Arthur had been adjudicated insane. During his period of insanity, Arthur sold some unimproved real estate to Katrina for $5,000, its fair value. Katrina did not know that Arthur was insane. In fact, he acted perfectly normal in every way. Arthur spends this $5,000. Arthur's guardian learns of this transaction and sues to void the contract and recover the land. What results?
The guardian can get the land back, but Arthur must pay Katrina the $5,000.
John offered to sell Jane his 1959 Thunderbird automobile. Before Jane could accept the offer, lightning struck the car, and it was totally destroyed. Which of the following is true?
The offer is terminated by operation of law.
If an offeree gives a rejection to the offeror, which of the following is true at this point?
The offeree has lost the ability to accept the original offer.
A preexisting duty can arise from a person's job or position, or it can arise out of an existing contract.
True
A rejection of an offer is generally not effective until it is received by the offeror.
True
An offer terminates upon the expiration of a stated time in the offer.
True
If no mode of acceptance is stated in the offer, then any mode which is reasonable in the circumstances may be used.
True
Offers made to the public may be revoked by communicating the revocation by the same means used to make the offer.
True
Worldwide Motor Company promised to buy all its needs, "taking into account tires purchased from other tire companies," for automobile tires from Good Tire Co., and Good promised to sell these tires. The contract also provided that Worldwide could cancel the contract at any time, without penalty, and could buy tires from other manufacturers if it so desired. This contract is:
Unenforceable, because Worldwide's promise is illusory and there is no mutuality of obligation.
