Chapter 3: Other North Carolina Contract Distinctions

Question 1

Infancy

Answer 1

In NC anyone who has not reached 18 is an infant. However, some Ks are enforceable when the Superior Court specifically approves it:

Agrees to perform artistic or creative services

Agrees to sell, lease, license or otherwise dispose of literary, musical or dramatic works

Is employed or agrees to render services as a participant or player in a sport or

Renders services as an actor, extra, background performer, or in a similar capacity.

Court may require 15% of minor’s gross earnings to be held in trust until minor reaches 18.

Question 2

Warranties

Answer 2

Alternative A: A seller’s warranty, whether express or implied, extends to:

any natural person who is in the family or household of the buyer, or who is a guest in the buyer’s home;

if it is reasonable to expect that such a person may use, consume or be affected by the goods;

and the person sustains a personal injury as a result of the breach of warranty.

Seller MAY NOT contract to limit warranties extended to buyer alone.

Question 3

Third party beneficiaries

Answer 3

NC follows the Second Restatement. A third party beneficiary can recover if she is an intended beneficiary

Question 4

SOF

Answer 4

In NC, a lease of real property that will last more than 3 years from the date of the making must by supported by a signed writing.

A writing is required for the transfer of an interest in real property

NC does not recognize part performance as an exception to the SOF. If P has advanced all or part of the purchase price or made improvements to the property, the P may recover the advance payment or the value of the improvements.

No 1 year provision in NC

Commercial loans for more than 50K subject to SOF

A promise to pay a debt that was discharged in BK subject to SOF

Non-compete agreements sub to SOF

Leases of land for the purpose of mineral extraction must have a writing no matter how short the duration.

Question 5

Lost profits

Answer 5

Party must prove but for the breach, it would have made profits and the profits can be calculated w/ reasonable certainty.

Question 6

Mental Anguish

Answer 6

A P can recover for mental anguish when

the K is personal in nature;

The performance of the K is of a sensitive nature such that a breach would necessarily and reasonably result in mental anguish and

the parties should know from the nature of the K that mental anguish will result from it’s breach.

Question 7

Punitive damages

Answer 7

In NC punitive damges are never allowed for breach of K, except cases to marry (which is a tort) or accompanied by a tort that may give rise to punitive damages.