Contracts Flashcards
1
Q
C offers to sell D a hat for $700. D responds buy stating I will buy it for $600. C says nothing. Can D accept for $700?
A
Counteroffer - rejected offer. Cannot accept.
2
Q
B borrows $5000 from A, fails to pay, and asks A to accept $4600. Agreement is?
A
Unenforceable - accord must be supported by consideration
3
Q
B borrows $5000 from A, fails to pay, and asks A to accept $4600. Is this a novation?
A
No. Novation is substitution of parties.
Agreement is unenforceable due to lack of consideration.
4
Q
A contracts with B to paint A’s tractor. A dies. Does this discharged B from performing?
A
No.
5
Q
A contracts with B to paint A’s tractor. Tractor is destroyed. Does this discharged B from performing?
A
Yes. Impossibility.
6
Q
A communicates with B to sell A’s land to B. nothing is said as to price. Can B accept?
A
No. Common law, need price and description of land to constitute an offer.
7
Q
A communicates with B to sell A’s car to B. nothing is said as to price. Can B accept?
A
Yes. Valid offer. Sale of goods, article ii applies. Court can supply reasonable price.
8
Q
A communicates with B to sell A’s car to B for a fair price. Can B accept?
A
No. Vague terms cannot be supplied. Article ii does not matter.
Look for fair, reasonable, appropriate price
9
Q
B offers to supply A with all its needs for shirts for five years. No quantity is specified. Valid offer?
A
Yes. Output contracts can be valid.
10
Q
B contracts with A to supply A with all its needs for shirts for five years. In the first two years A’s need are 1000. Year three then A needs 1020. What result?
A
Still valid contract, increase is not disproportionate.
11
Q
B contracts with A to supply A with all its needs for shirts for five years. In the first two years A’s need are 1000. Year three then A needs 10,000. What result?
A
Not a valid contract too disproportionate.
12
Q
A sends a note to sell computer to B. Can B accept five years from now?
A
No, lapse of time. Beyond a reasonable time.
13
Q
A sends an inquiry to B about buying a horse. B sends a price quotation. Did B make an offer?
A
Yes, exception to general rule that price quotation is not an offer.
14
Q
B offers to sale A a car. Next day B says at home, “I changed my mind.” Did B revoke?
A
No. Communication not made to A.
15
Q
Accord breached by debtor. What can the creditor sue on?
A
Original contract or accord agreement.
Not both.
16
Q
B offers to sale A a car. Next day B sells car to C. Did B revoke?
A
No, conduct was not communicated to A.
17
Q
How can performance be discharged once a party is under a duty to perform?
A
Full performance
Good faith tender of performance
Mere promise is insufficient
18
Q
B offers to sale A a car. Next day B sells car to C. A learns of sale and accepts. Did B revoke the offer?
A
Yes. Unambiguous conduct and offeree learns of conduct.
19
Q
B offers to sale A a car. Next day B offers to sell car to C. A learns of proposed offer to C. Did B revoke the offer to A?
A
No. Not revoked. Can make multiple offers.
20
Q
B offers to sale A a car. A pays B $10 to keep the offer open for a week. Can B revoke the offer to A?
A
No. Irrevocable because consideration is paid.
21
Q
B offers to sale A a car. A pays B $10 to keep the offer open for a week. A accepts eight days later. Can B revoke the offer to A?
A
Yes option expired, now it can be revoked.
A can accept if B did not revoke.
22
Q
B offers to sale A a car. A asks B to keep the offer open for a week because A’s mom is dying. Can B revoke the offer to A before the end of the week?
A
Yes. Still revocable. No option because no consideration.
23
Q
B a computer dealer offers to sell ink to A. The offer is oral and expressly keeps it open for a week. Can B revoke?
A
No. Not in writing and not signed by merchant.
24
Q
B a computer dealer offers to sell ink to A. The offer is signed and in writing to keep offer open. A pays nothing to B to keep the offer open. Can B revoke?
A
No. Firm offer rule because B is a merchant.
25
B a computer dealer offers to sell a monitor to A. The offer is signed and in writing to keep offer open. Can B revoke the offer after two months?
No. Firm offer rule, cannot revoke for up to three months.
26
B a computer dealer offers to sell a monitor to A. The offer is signed and in writing to keep offer open for five months. A accepts after four months. Can B revoke the offer?
Yes. Firm offer rule applies up to three months.
27
B a computer dealer offers to sell ink to A. The offer is signed and in writing. A pays nothing to B to keep the offer open. Can B revoke?
Yes. No expression to keep open.
28
B offers A to $200 to paint house and it can be accepted only by painting. A starts to paint. Can B revoke?
No. Unilateral contract - start of performance makes offers irrevocable.
29
B offers A to $200 to paint house and it can be accepted only by painting. A buys $80 of paint and rollers. Can B revoke?
Yes. Mere preparation is not performance.
30
B borrows $5000 from A, fails to pay, and asks A to accept $4600. Is this an accord and satisfaction?
No. Agreement is unenforceable due to lack of consideration.
31
Accord agreement breached by creditor by refusing accept payment. What can the debtor sue on?
Breach of accord agreement
Not entitled to punitive damages.
32
C offers to sell D land for $700. D pays $5 to keep open for a week. Next day, D responds buy stating I will buy it for $600. C says nothing. Can D accept for $700 two days later?
Yes, option exception to counteroffer.
33
C offers to sell D a hat for $700. D asks whether will take $690. C says no. Can D accept for $700?
Yes. Not a counteroffer, mere inquiry and bargaining.
34
C offers to sell D a land for $700. D accepts only if C removes the trash from the land. Valid contract?
No. Conditional acceptance is not valid and rejection of offer.
35
L offers to lease a room to T. T adds an arbitration clause and signs lease. Valid acceptance?
No. Counteroffer. T cannot accept.
36
P offers to sale a book to S. S adds an arbitration clause and signs the agreement. Valid acceptance?
Yes. UCC applies. New term is not a condition of acceptance. Response is express to require arbitration.
37
P offers to sale a book to S. S adds an arbitration clause and signs the agreement. Valid acceptance if both parties are merchant?
Yes. Merchant is irrelevant. UCC applies. Additional term is not conditioned on acceptance.
38
P offers to sale a book to S. S says "I accept, deliver it on Monday." P says nothing. Is there a contract with the additional term?
Yes there is an acceptance and contract formed.
Deliver date is not added as a term. Need to be merchants, term is not material, and not objected to by original offeror.
39
P offers to sale a book to S. S says "I accept, deliver it on Monday." P and S are merchants. P does not object. Is there a contract with the additional term?
Depends on whether deliver date is material. Fact question.
40
B offers A to $200 to paint house. A says nothing to B. A starts to paint. Did A accept the contract?
Yes, start of performance is acceptance.
41
B offers A to $200 to paint house and acceptance only by performance. A says nothing to B. A starts to paint. Did A accept the contract?
No. Start of performance is not acceptance in unilateral contracts.
42
B offers A to $200 to paint house and acceptance only by performance. A says nothing to B. A starts to paint, but C offers A to paint his house for $700. A leaves B's house and does not complete. Can B sue for breach?
No. Start of performance is not acceptance for unilateral contracts, no contract formed.
43
Y sends an offer to X on 1-2. X sends accepts on 1-5. X receives revocation by Y on 1-7. Valid contract?
Yes valid contract.
Generally acceptance effective when sent. Acceptance before revocation.
44
Y sends an offer to X on 1-2. X rejects and sends rejection on 1-4. X changes mind and sends acceptance on 1-6. Valid contract?
No. Rejection if arrived before acceptance.
45
Y sends an option contract to X To buy land by 1-2 at 5 pm. Y accepts at 4:30. Valid contract?
No. Option must be received before deadline. Cannot use mailbox rule.
46
Y orders red hats from Z. Z sends blue hats and sends explanation that Z is out of red hats. Valid contract? Breach by Z?
No contract. Accommodation.
No breach.
47
Y offers to sale a hat to Z for $700. Can Z assign offer to X?
No, offers cannot be assigned.
48
Y offers to sale a hat to Z for $700 with an option? Can Z assign option to X?
Yes. Options can be assigned, unless stated otherwise.
49
L rents T a room. Before lease expires, L sends a promise to keep rent at same rate. T paints the room. L changes rental rent. Can T sue L for breach by increasing rent?
No. No contract, no consideration.
Maybe promissory estoppel (reliance is reasonable and foreseeable; necessary to avoid injustice)
50
A contracts with B to paint A's tractor. B dies. Does this discharge the contract for impossibility?
No.
Only if B was necessary, special skills, to effectuate contract.
51
Y orders red hats from Z. Z sends blue hats. Valid contract?
Yes, valid contract. Breach of contract.
52
B asks A not to listen to music and will pay $50. A does not listen to music. B refuses to pay. Enforceable contract?
Yes. Legal detriment.
53
B saves A life. C is grateful and says he will pay B $4500. C changes his mind. Valid contract?
No. Past consideration is not consideration.
54
C sees A is in danger, and asks B to save B. C is grateful and says he will pay B $4500. C changes his mind. Valid contract?
Valid contract.
55
A contracts with B to perform for $800. B refuses to pay unless paid $900. A promises to pay $900. B performs. A pays $800. Is there consideration to pay the extra $100?
No. Pre-existing duty. Need separate consideration.
56
F owes D $600, debt is due and undisputed. F and D agree that F will pay $500 and D will not take action against F. Is there new consideration? Enforceable?
No. No.
When debt is due and undisputed, no new consideration for release.
57
B asks A, who is 10 years old, to walk a dog for $60. A walks the dog. B refuses to pay. Can A sue on the contract?
Yes, capacity of plaintiff is irrelevant. Voidable contract.
58
S sells P items on credit. S sues T for the credit alleging that T promised to pay. Does T have a defense?
Not within Statute of frauds, no defense.
59
S sells P items on credit. S sues T for the credit alleging that T promised to pay if P did not pay. Does T have a defense?
Yes, statute of frauds. Need a writing to satisfy statute of frauds.
60
S sells P items on credit to be used to perform services for T. S sues T for the credit alleging that T promised to pay if P did not pay. Does T have a defense?
No. Not within statute of frauds.
Main purpose - exception to suretyship.
61
P claims to have given a option to sell redacre to D. Is the option within the statute of frauds?
Yes.
62
P orally agrees to sell Redacre to D for $70,000. When P refuses to deed Redacre and D sues for a breach. D is in possession of land, but did not pay. Does S a have valid defense?
Yes. Part performance requires two of: 1) improvements, 2) payment and 3) possession.
Here only possession.
63
F owes D $600. Statute of limitations runs. F writes to D "I'll pay you $490." Valid consideration? Can D enforce the contract?
No consideration, but C can enforce contract.
64
P orally agrees to sell Redacre to D for $70,000. When P refuses to deed Redacre and D sues for a breach. D is in possession of land and made improvements. Does S a have valid defense?
No, part performance.
65
B agrees to work for D for three years. B works for 14 months and then D fires B. B sues D for breach? Does D have a valid defense?
Yes. Statute of fraud. Part performance does not apply for service agreements.
Look for recovery under quasi-contract.
No recovery under contract law.
66
B orally agrees to sell 3,450 items to A for $7,000. B delivers 450 items. B refuses to pay. B sues for breach for failure to pay? Does A have a valid defense?
No. Part performance on part of seller.
67
B orally agrees to sell 3,450 items to A for $7,000. B delivers 450 items. B refuses to pay. A sues for breach for failure to deliver remaining items. Does B have a valid defense?
Yes. Needs to be part performance on part of seller.
68
A writing states that "Law firm X agrees to hire A for three years at $70,000 per year." Signed by B on behalf of law firm X. Law firm X wrongfully dismisses A. A sues Law firm X. Can law firm X raise a valid defense?
Yes. Writing satisfies the statute of frauds.
69
B sues A for breach of alleged contract to buy flour for $700. Only writing is "I agree to buy 100 pounds of flour." Signed by A. Is there a valid defense for B?
No, writing satisfies the statute of frauds.
70
B, barrel distributor, receives letter from A, beer maker, "as we discussed, you will send me 100 barrels." B does not respond. B never sends the barrels. A sues for a breach, B asserts a statute of frauds. Who is successful?
A, because statute of frauds satisfied. Merchant to merchant. Failure to respond is sufficient. No defense for B.
71
L sues S for breach of a one year lease that B entered into claiming B is authorized to enter into agreement on behalf of S? Must there be a written agreement to evidence B's authority to act?
No. Equal dignity. One year lease not within statute of frauds. No writing required.
72
L sues S for breach of a three year lease that B entered into claiming B is authorized to enter into agreement on behalf of S? Must there be a written agreement to evidence B's authority to act?
Yes. Within statute of frauds. Equal dignity.
73
R hires S for eleven months. The sign an agreement, it provides all modification in writing. S claims that there is a new agreement for six months. R alleges that no agreement and sues. Is a written modification needed?
No. New agreement not within the statute of frauds. Ignore the contract provision.
74
B contracts to sale a car to A for $400. They sign a contract with a provision that all modifications in writing. B claims they later agreed to a price of $489. A refuses to pay. Does B need a writing of modification?
Yes. Under UCC, contract that require written modifications are effective unless waived.
75
B hires A to injure C. B and A make an contract. A buys a ticket to fly to C and carry out the injury. A fails to pay for the ticket. Can the airline sue for breach?
Yes. Subject matter is illegal, despite illegal purpose.
76
B tells A that house has no termites. B honestly believes there is no termites. A agrees to buy the house. House does have termites. Can A rescind agreement?
Yes. Misrepresentation: 1) before contract ; 2) by contracting party; 3) false and 4) induces contract.
Does not matter if honest.
77
B and A contracts to but items shipped by a vessel Peerless. A intends Peerless Super. B intends Peerless Superior. If shipped on Peerless Super. Neither A and B know there are not two boats with same ship. Can A enforce agreement?
No. Ambiguity.
78
S and A contract for sale of cow. Both were certain cow was barren. Cow was fertile and worth more. S refuses to deliver the cow. A sues. What result?
A wins. Mutual mistake is not enforced. Mistake was an assumed risk.
79
S has a written contract with A to sell 1000 chickens for 12 months. S delivers 1000 chicken, A sues claiming before the deal S would deliver as many chicken that A needs. A has a writing and would this be considered?
No. Purpose is to change or contradict. Not admissible because it changes contract.
80
S has a written contract with A to sell 1000 chickens for 12 months. S delivers 1000 chicken, A sues claiming after the deal S would deliver as many chicken that A needs. A has a writing and would this be considered?
Yes no parol evidence rule.
81
S has a written contract with A to sell 1000 chickens for 12 months. Before contract, there is evidence that the deal was 1200 for 10 months. Can S use this evidence of a clerical error?
Yes.
82
S has a written contract with A to sell 1000 chickens for 12 months. Before the deal S tells A that he want supply A with has many chickens as needed. Can A rescind the contract.
Yes for the limited purpose of a defense of misrepresentation to the enforceability of the agreement?
83
S contracts with B to buy items. Contract is for to deliver items to B. what are S's obligation if shipment contract?
S must get items to a common carrier
S must make reasonable arrangements for delivery
S must notify the buyer
84
S contracts with B to buy items. Contract is for to deliver items to B. what are S's obligation if destination contract?
Seller does not complete delivery obligation until goods arrive at destination.
85
Accord agreement breached by creditor by suing on original contract. What can the debtor sue on?
1. Raise accord agreement as equitable defense
OR
2. Wait until creditor is successful then bring action for breach of accord.
86
S contracts with B to buy items. Contract is for to deliver items to B. what are S's obligation if FOB B's location?
Destination contract. Seller does not complete delivery.
87
S contracts with B to buy items. Contract is for to deliver items to B. what are S's obligation if FOB S's location?
Shipment contract.
88
B buys coffee from A. B is in Ohio and A New York. During shipment, coffee is damaged by rats. A was two weeks late in shipment. Deliver was, FOB, Ohio. Who bears the risk?
A, because there was a breach. Even if unrelated to the problem with the coffee.
89
B buys coffee from A. B is in Ohio and A New York. During shipment, coffee is damaged by rats. Coffee was shipped, FOB, New York. Who bears the risk?
B, buyer has risk of loss because seller completed the delivery obligations.
90
B buys coffee from A. B is in Ohio and A New York. During shipment, coffee is damaged by rats. Coffee was shipped, FOB, Michigan. Who bears the risk?
A, seller. Destination contract.
91
A tells a store owner that he needs a suit for a big meeting. A tells store owner that he needs a suit that fits well. Store owner shows A a suit and says it is top quality. A goes to the meeting and the other laugh at Him. Can A recover under a warranty theory? Which one?
Implied warranty of fitness for particular purpose.
92
D buys a TV "as is" from store. D gets home and TV blows up. Can D sue under an implied warranty of merchantability?
No. Disclaimer because of words "as is." That is disclaimer of implied warranty.
93
B buys a frig from store. Contract says all parts guaranteed for two years and liability limited to replacement parts. A defective part causes a fire and causes $590 damages. Can A sue for a breach of contract and recover $590?
No. remedy limited to replacement parts. Express warranty is limited.
94
B and A contract for 200 green pants. B delivers, FOB, A's city, 199 green pants and one red pair of pants. What can A do?
A can accept or reject goods. Buyer has option if not a perfect tender.
B failed to make perfect tender. Perfect tender is for sell of goods only. Complete compliance with contract terms.
95
B and A contract for 200 green pants. B delivers, FOB, A's city, 199 green pants and one red pair of pants. A rejects goods, but leaves pants out in the rain. Can B recover for damages?
Yes, buyer who rejects must use reasonable care once goods are rejected.
96
A and B contract to buy a canoe for $700. B pays for it by credit card. Once canoe arrives, B sees it is the wrong type of canoe and rejects. Is there acceptance?
No. No acceptance without opportunity for inspection. Payment does not matter.
97
A and B contract to buy a canoe for $700. B pays for it by credit card. B uses the canoe in fresh water. Three months after, B uses the canoe in the ocean and it leaks. Next day B sues A. Can B revoke the acceptance?
Yes, nonconformity substantially impairs, excusable grounds for revocation, and revocation within reasonable time of discovery.
98
A and B contract to buy a canoe for $700. B pays for it by credit card. B uses the canoe in fresh water. Three months after, B uses the canoe in the ocean and it leaks. One year later B sues A. Can B revoke the acceptance?
No, too long, not a reasonable time to revoke.
99
S contracts to buy a home from A. S needs the house because S is about to marry B who has three children. Needs home to get children into best school in the city. A breaches. Can S get specific performance to get A to sell home?
Yes. Each piece of land is unique, specific performance is available.
100
S contracts to buy a home from A. A breaches and sells it to B, bona fide purchaser. Can S get specific performance?
No.
101
L sells a TV to B on credit. When B receives TV, B is insolvent. L learns of insolvency. The next day, L files suit to get the TV by reclamation. B stills has TV. Who wins?
L, seller must give notice within ten days of receipt.
102
B hires A to paint B's house for $7,000 payable when A completes the work. B has to hire another painter who charges $7,850. What is the amount of damages B can recover from A?
Protect expectations of parties.
$850.
103
B hires A to paint B's house for $7,000 payable when A completes the work. A expects to make a profit of $700. B breaches after A used $100 expenses. What is the measure of B damages?
$800, expected profits plus expenses
104
B sells a car to A. A pays $7000. B delivers the car. Car has problem, A keeps car and sues for damage. When deliver car was worth $6000, should have been worth $7500. What is the maximum recovery?
Seller breached.
Fair market if perfect minus fair market as delivered.
$1500 is the most.
105
B sells a car to A. A pays $7000. B never delivers the car. At time of breach, market price is $8000. A finds a replacement for $8500. What is the maximum recovery?
$1500.
106
B sells a car to A. A pays $7000. B never delivers the car. At time of breach, market price is $7600. A finds a replacement for $7200. What is the maximum recovery?
$600
Seller breached.
107
B sells a car to A for $7000. A receives the car and never pays. At time of breach, market price is $8000. What is the maximum recovery for B?
$7000
Buyer breaches and has item. Contract price.
108
B sells a car to A for $7000. A never pays. At time of breach, market price is $8000. B resells for $6400. What is the maximum recovery for B?
$600
Contract minus the resale
109
B contracts to sale clothing to A for $700. The goods are part of the regular inventory. A breaches. B resells the same item to C for $700. Can B recover any money damages from A?
Provable lost profits.
Lost profits for lost volume sale.
B would have made two sales and two profit.
110
B contracts to a painting to A for $700. A breaches. What does B have to prove to recover $700.
Expectation of contract. If A had not breached, then B was have money and no painting.
If painting has a resell of zero to recover $700.
Contract minus resale.
111
B contracts to a painting to A for $700. A breaches. B spends $50 to find a replacement buyer and storing the painting. What can B recover?
Contract minus resale plus incidental damages.
112
D contracts with C to transport items for $700. C breaches by nonperformance. D is unable to find another person to transport for less than $800. What is the measure of damages? Are there consequential damages to be recovered?
$50. General damages . These are not consequential damages.
113
D contracts with C to transport items for $700. C breaches by nonperformance. D is unable to find another person to transport for less than $800. D cannot get deliver for five days and due to nondelivery the plant was closed and lost $600 in profits. What is the measure of damages? Are there consequential damages to be recovered?
$100 general damages are recoverable.
$600 special damages are not recoverable.
Consequential damages not recoverable unless defendant knew. Needs to be foreseeable.
114
D tells C that plant is closed and needs item. D contracts with C to transport items for $700. C breaches by nonperformance. D is unable to find another person to transport for less than $800. D cannot get deliver for five days and loss $600. What is the measure of damages? Are there consequential damages to be recovered?
$100 general
| $600 special are recoverable because they are foreseeable.
115
B hires A to paint B's house for $7,000 payable when A completes the work. A expects to make a profit of $700. B breaches after A used $100 expenses. Notwithstanding the breach, A continues and incurs $5000 of expenses. What is the measure of B damages?
$800. Cannot recover damages that can be avoidable.
116
B hires A to paint B's house for $7,000 payable when A completes the work. A expects to make a profit of $700. B breaches after A used $100 expenses. Notwithstanding the breach, A continues and incurs $5000 of expenses. A sues. Who must plead and prove avoidable damages?
Defendant must plead and prove as defense to amount to be recovered.
117
B contracts to build a home for A. Contract fixes damages for delay to be $70,000. B breaches. Can A enforce contract and recover $70,000?
No. Penalty, not a reasonable forecast.
118
B contracts to build a home for A. Contract fixes damages for delay to be $250 a day. B breaches and the building is delayed by 4 days. Can A enforce contract and recover liquidated damages?
Yes. Reasonable forecast of damages that are difficult to estimate.
119
D contracts to paint C's house with payments to be made on 1-5. In December, C tells D that they are doing great but that C will not pay. Does D have an excuse for nonperformance?
Yes. Anticipatory repudiation. Non-breaching party is excused from performance.
120
D contracts to paint C's house with payments to be made on 1-5. In December, C tells D that they are doing great but that C will not pay. When can D recover damages in Dec or Jan?
December due to anticipatory repudiation. Sue immediately.
121
D contracts to paint C's house with payments to be made on 1-5. D finishes in Nov. In December, C tells D that they are doing great but that C will not pay. When can D recover damages in Nov, Dec, or Jan?
January. Must wait if performance is completed by non-breaching party.
122
D contracts to paint C's house with payments to be made on 1-5. In December, C tells D that they are doing great but that C will not pay. Next day C changes mind and says that they have the money in escrow. is D excused from performance?
No. Rue traction of anticipatory repudiation.
Timely made
No material change.
123
B hires A to paint a wall white for $7,000 payable when completed. A paints the wall yellow. B does not pay. B spends $7600 to repaint. B sues and A counterclaims for payment. Who can recover?
A is a material breach. B is excused from performance. B can recover money damages.
124
B hires A to clean six apartments for $600. A breaches after cleaning one apartment. B sues. Does B have to pay A under contract law?
No. Material breach excuses performance on non-breaching party.
Look for recovery for quasi contract recovery.
125
B hires A to clean six apartments for $600 per apartment. A breaches after cleaning one apartment. B sues. A counterclaims for $1200. Can A recover under contract law?
Yes. Divisible contract and P has to pay for divisible amount.
126
B offer to sale a house to C for $70,000. C accepts on condition that C can find a mortgage at 6% or less. Can C enforce contract is she gets a mortgage at 5.8%?
No, no contract. Condition in the acceptance.
127
B offer to sale a house to C for $70,000 and agreement states on condition that C can find a mortgage at 6% or less. Can C enforce contract is she gets a mortgage at 5.8%?
Yes. Valid contract. Express condition.
128
B offer to sale a house to C for $70,000 and agreement states on condition that C can find a mortgage at 6% or less. Can B enforce contract if C gets a mortgage at 6.18%?
No. Express condition must be strictly complied with.
129
B contracts with A to buy a house. Agreement states that A will install XYZ brand shades. A installs ABC brand shades. Does B have to pay on the contract?
No. Express condition. Strict compliance.
130
B offer to sale a house to C for $70,000 and agreement states on condition that C can find a mortgage at 6% or less. C gets a mortgage at 6.18%. Can C enforce the contract, even if B refuses?
Yes. C waived express condition.
131
D borrows $7000 from C with interest. Later, D and C agree that if D gives C a car by end of month then debt will be excused. D does not deliver the car. Can C recover on original contract?
Yes, either the accord agreement or original contract.
132
D borrows $7000 from C with interest. Later, D and C agree that D will give C a car by end of month to excuse debt. D does not deliver the car. Can C recover on original contract?
No. Modification is a substitution and only recovery on modification.
133
L contracts with D to wash windows on a house. D starts to wash windows, but house burns down. Is D excused from performance on contract?
Yes. Impossible excuses contract.
134
L contracts with B to build a house. While building the house is destroyed by a tornado. Can L enforce the contract on B to build house?
Yes. Impossibility is not an excuse.
135
A contracts with B to paint A's tractor. B dies. A find a replacement for $6000. Can A sue b's estate for the difference?
Yes. Death does not excuse, still can recover.
136
B and A enter into agreement for $700 for A to delivery items to C. C does know of the contract. Can B cancel the contract before payment and delivery?
Yes. Cancel of agreement is ok if third party does not know and has not relied.
137
B and A enter into agreement for $700 for A to delivery items to C. C never receives the items. C sues B for breach. B files a motion to dismiss. Should it be granted?
Yes. Beneficiary party cannot sue promisee.
Third party beneficiary has contract rights against promisor.
138
B and A enter into agreement for $700 for A to delivery items to C. C never receives the items. B owes C $700. C sues B for breach. B files a motion to dismiss. Should it be granted?
No. C can recover on preexisting debt.
139
B and C enter into a service agreement that says all assignments are not assignable. B decides to assign to A. Can A enforce agreement against C?
Yes, assignee did not know. Assignor may also be liable to obligor.
140
A contracts with B for services for $50,000. A assigns rights to C for $10. A decides that he wants to be paid from B. Can B revoke?
No. Consideration makes assignment irrevocable.
141
X signs a contract with Y to promise to pay $700. Y assigns the debt to Z for $500. X was an infant when contract was made. Z sues Y, can Z recovery?
Yes under an implied warranty due to consideration paid by assignee.
142
X signs a contract with Y to promise to pay $500. X assigns rights to contract to A as a gift. Then X assigns rights to contract to B as a gift. Who can collect?
B gifts then last in time.
143
A player visited a sick boy and promised to hit a home run for the boy's courage. The boy's father told the player that he would pay him $5,000 if he hit a home run. The player hits a home run and seeks to collect. The father refuses. Who is successful under the prevailing modern rule?
Player - promise to perform a duty is a valid consideration as long as the duty of performance is not already owed to promisee. Thus, the duty is owed to a third party a promise to perform is given to another is valid consideration.
144
A player visited a sick boy and promised to hit a home run for the boy's courage. The boy's father told the player that he would pay him $5,000 if he hit a home run. The player hits a home run and seeks to collect. The father refuses. Who is successful under the common law?
Father.
145
B borrowed $5000 from A. B fails to pay. Statute of limitation runs. A tells him if you pay me $4000 I will forget about the debt. B agrees by signing a written document and fails to pay. A is entitled to:
$4000. B's moral obligation is sufficient.
146
B agrees to be exclusive producer of an item for A and A agrees to only sell that item. Written contract states that "either party may cancel agreement with 2 months notice." After 5 years, B tells A that they cannot continue and would stop production in 60 days. A sues B for breach. Result.
B, because there was a good faith reason for stopping production. Right to cancel is valid because it is restricted.
147
B agrees to be exclusive producer of an item for A and A agrees to only sell that item. Written contract states that "either party may cancel agreement at any time." After 5 years, B tells A that they cannot continue and would stop production in 15 days. A sues B for breach. Result.
Contract is illusory because of unqualified right to cancel contract.
148
General contractor solicits bids from subcontractor. B provided the lowest bid and general contractor used bid to proposal for the construction. General contractor was awarded the work but then decided to use C who previously submitted a higher bid. B sues the general contractor. Result?
General contractor will prevail. No agreement because general contract never communicated an acceptance of B's bid. Bids are offers.
General contractor is not bound to accept (no implied acceptance by using it)
149
B and A entered into an written agreement where A will use the services of C. C, who is not a party to the agreement, relies on the work from A and turns down work from D. B breaches the contract with A. A refuses to use C's services. C sues A for breach. Result?
C is intended third party beneficiary, but A can raise any defense that they would have against the other party to the contract.
150
B and A entered into an written agreement where A will use the services of C. Before C learns of contract, B and A modify the agreement so that A does not have to use C's services. C sues A for breach. Result?
promisor and promisee have right to modify agreement before the third party rights vest. Vesting occurs when the beneficiary:
1) manifests assent; 2) brings suit; or 3) relies.
151
Store orders 100 items at $10 each from manufacturer. Manufacturer delivers 40 items in response to order and says that they cannot supply the rest. Store sells 40 items and obtains the remaining 60 items from another party at $11 each. Store refuses to pay. Manufacturer sues. What is the maximum recovery?
$340. Contract price ($400) less the cover damages ($60)
Shipment of nonconforming goods is acceptance and breach, unless there is accommodation (counteroffer).
If buyer accepts goods then it must pay at contract rate - minus damages.
152
Manufacturer sends an offer to wholesaler for standard lot of items at $40,000. Wholesaler sends back an acceptance and adds in writing "Our liability is limited by $200." No further communications. What terms are included in contract?
UCC applies - both merchant. Knock-rule for battle of forms. Material terms effect money or liability. Offeror's terms govern and offeree's terms that were not assent to are knocked out. There is a binding contract with offeror's terms.
153
Can one party rescind a contract when there is a unilateral contract?
No unless the other party knew or should have known of the mistake
154
Store asks a producer sends a written request for a specific item. Producer responds by sending a catalog listing the price and terms. Store sent a check to buy the item for $4000. Upon receiving the check, the producer noticed that the price was a mistake. Can the producer prevail in a suit to recover the difference?
No. Exception to rule that advertisements are not offers. A specific request was made for the item and a catalog with the specific price and terms was sent in reply. This constitutes an offer that was accepted. Unilateral mistake will not rescind contract.
155
When a buyer breaches a contract by repudiating the offer, what can the seller recover?
Contract price - minus resale price + incidental damages.
156
Homeowner and buyer contract to sale house for $480,000 and closing to be 7-1. On 5-1, buyer sends a written note expressing doubts about the sale and says "won't pay unless the home is repainted." When can the homeowner sue the buyer?
Immediately. Anticipatory breach. Nonbreaching has option to treat contract as breached and sue immediately.
Does not have to wait until the closing.
157
A buyer, 2 months shy of his 18th birthday, buys a car with $500 down and reminder price being financed at monthly terms. 8 months later, the buyer's license is revoked. The buyer had been making regular payments. Can the buyer seek void the contract?
No. Minor can affirm contracts once they are of majority. Affirmation may be express or implied. Failing to discharge after a reasonable time after turning 18 is affirmation.
158
On 4-1, B sends C an offer to buy a farm and states offer expires on 6-1 if acceptance by C has not been received on or before that date." On 6-1 C decides to buy and sends a letter by regular mail to B who receives it a few days later. On 6-5 B sells the farm to D. C sues B for breach. Result?
For B. - No contract is formed between the parties. No mailbox rule when the offer states that acceptance will not be effective until received.
159
A builder contracts with couple to build a house and payment would be received when the house is fully build. After completing 65%, the house is destroyed. What can the builder recover under the contract?
Nothing. Builder's completion of the house was a condition precedent to couple's promise to pay. It is not impossible to complete the construction.
160
A builder contracts with couple to build a house and payment would be received when the house is fully build. After completing 65%, the house is destroyed. Would a court excuse the binder from timely performance?
Yes, because is not the builder's fault.
161
Store offers to sale rare item to purchaser for $400. Purchaser sends a note "I have decided to purchase the item and enclose a check for $400. Leaving the country for six-months, please store item and I will pay you for expense." What are the terms of the agreement?
There is valid acceptance. Under UCC when one party is not a merchant and new terms are added, the terms are those of the offer.
162
On 6-1, rancher offers farm to buy land for $150,000 and farmer paid a $300 option to keep open for 30 days. On 6-7, farmer wrote a note to rancher saying that he could only paid $135,000. On 6-30, the farmer changed his mind and sent an acceptance by mail. On 7-6, rancher sold land to another buyer before receiving acceptance. Has contract been breached?
No. acceptance was not received within 30 days. Mailbox rule does not apply to option contracts.
163
B contracts with A for plumbing services. After the contract is signed, A tells B to send the payment to A's daughter. A's daughter learns of the payment and plans to use it for an upcoming wedding. After completing the services, A changes mind and tells B to pay him. Best theory for recovery for daughter?
Detrimental reliance on the contract which nullifies revocation.
164
B contracts with A for plumbing services. After the contract is signed, A tells B to send the payment to A's daughter. A's daughter learns of the payment and plans to use it for an upcoming wedding. After completing the services, A changes mind and tells B to pay him. Will the daughter been successful to receive payment from B?
No. Not an intended third beneficiary. Must be intended at time of contract. This is an assignment made without consideration so it was freely revocable by assignor.
Daughter may have a claim under detrimental reliance.
165
Student gives landlord an option to rent an apartment. Before student exercises the option, the landlord rents the apartment to a third party who is unaware of the agreement. The landlord refuses to rent to student. Can student seek specific performance?
No. The rent to a third party (bona fide purchaser) cuts off specific performance.
166
A person walks into a barber shop and sit down in a chair. Without saying a word the barber cuts his hair. What type of contract?
implied-in-fact contract - assent is manifest by conduct.
167
Two parties have discussion about an exclusive distributorship. After the first stage of oral agreements, the parties have agreed to all major terms. The distributor is anxious to get start and purchases a fleet of new trucks and hires more drivers. A week later the other party informed the distributor that the exclusive distributorship would be given to a different contractor. What is the distributor best grounds for prevailing in a suit?
Detrimental reliance on a theory of promissory estoppel. Promise that promisor should reasonable expect would induce action or forbearance on the part of the promisee.
168
Two parties have discussion about an exclusive distributorship. After the first stage of oral agreements, the parties have agreed to all major terms. The distributor is anxious to get start and purchases a fleet of new trucks and hires more drivers. A week later the other party informed the distributor that the exclusive distributorship would be given to a different contractor. Will the distributor prevail on a theory of unjust enrichment?
No. Quasi-contracts are used to provide restitution where there is unjust enrichment. The expenses of the distributor do not benefit the other party.
Better grounds of recovery is promissory estoppel.
169
A man was hired by a store, which had a posted sign that said "$50 paycheck deduction for tardiness." One first day the manager pointed to the sign. Later that week, the man was 5 minutes late, but nothing was said. When we received his paycheck, it was $50 less. Man sues. Result?
Paycheck deduction is a penalty and not a reasonable liquidated damages provision.
170
Father told girlfriend that if she married his son, he would send the son to college. Son and girlfriend married, but father refuses to pay for college. Father will prevail because?
contract was oral. statute of frauds.
| Contracts in consideration of marriage must be evidence by a writing
171
What can a buyer do if they receive nonconforming goods and has to use some of part temporarily for another customer? The buyer intends to replace the goods once the nonconforming goods.
He has accepted the nonconforming goods, but may reject the rest.
Does not waive right to collect for damages (difference between market price of conforming goods and nonconforming goods actual value)
172
Store purchased 20 HDTVs from a manufacturer. When items arrived, the store inspected them and none of them were HDTVs but regular TVs. Store notify manufacturer that they were rejecting the items, but manufacturer did not want them back. Store may recover what?
Money under contract paid for TVs but it is offset by what the TVs are resold for. Buyer must mitigate. Cannot keep TVs and obtain refund of money.
173
Owner read an ad for 40 items at $50 each on 2-1 and send an order request. 2-2 owner received a direct mailing with same offer. 2-3 manufacturer received order. 2-4 manufacturer shipped items. When did an enforceable contract arise?
2-4 - when manufacturer shipped goods. That was acceptance of the offer on 2-1 in the order request.
174
Supplier had a written contract with company to delivery manufacturing equipment. Company needed equipment to start production in 45 days. Two weeks later, supplier's workers went on strike. Company told the supplier's management that they would pay them a bonus to delivery the equipment. Company refused to paid, what is the supplier's strongest argument to recover?
Supplier had no pre-existing duty and completion was sufficient consideration to pay the bonus.
No pre-existing duty when owned to someone other than the promisor.
175
Buyer purchased items from seller and delivery was FOB seller's place of business. After delivering items to shipping company but before buyer receives them, seller learns that buyer is insolvent. What can seller do?
Demand immediate payment in cash for item because buyer is insolvent. Otherwise seller can refuse to deliver.
Seller can stop goods even when goods are tendered.
176
Owner of old car orally offers to sale car for $400 to buyer. Before buyer tenders cash, owner tells him that he just replaced the tires and needs another $50 to cover the cost. Buyer agrees to new price. If the buyer legally bound to pay the owner $450?
yes, because the contract as modified is less than $500 (which is trigger for a statute of frauds)
177
Buyer sent an order to retailer for 100-units for a game that must be compatible with a gaming system. Retailer made no warranties. Both reasonably believed that games were compatible, but they were not. Buyer rejects as non-conforming. Is buyer entitled to specific performance?
Not a remedy unless goods were unique or custom made.
178
Buyer sent an order to retailer for 100-units for a game that must be compatible with a gaming system. Retailer made no warranties. Both reasonably believed that games were compatible, but they were not. Buyer rejects as non-conforming. Is buyer entitled to recision of contract?
Yes, can rescind because parties had a mutual mistake that games were compatible.
179
Buyer sent an order to retailer for 100-units for a game that must be compatible with a gaming system. Retailer made no warranties. Both reasonably believed that games were compatible, but they were not. Buyer rejects as non-conforming. Is buyer entitled to restitution?
Only if buyer is entitled to rescission and already paid money. Restitution would be for the contract price.
180
Store and contractor agree in writing that contractor will service store for $4000 per month. 4 months ago, contractor in good faith needed a $1000 increase and told store to pay the increase to bank. Store orally agreed. After 3 months, bank did not receive payment and sues store. What result?
For store, because there was no consideration to support the modification of the agreement. (pre-existing duty)
This is not a third-party beneficiary.
181
Modification in writing of a prior contract requires what?
common - consideration; performance of an existing legal duty is not consideration
UCC - no consideration is required for the sale of goods
182
Art dealer agrees to buy the first painting of artist that wins a prize. They sign a written agreement, but price is not mentioned. Upon winning a prize, artist demands $15,000. Dealer offers $3,000. Who decides what the price term should be?
Court will fix a reasonable price at the time of the delivery of the goods under the contract.
183
Decorator asks woodworker to build a desk and signs a written contract for $5,000. Upon receiving desk, decorator is dissatisfied because it is not the same quality. Decorator sends check for $3,000 marked "payment in full." Woodworker cashed the check and sues decorator for the rest. Result?
Decorator's duties are discharged, because this is an accord and satisfaction. Check marked "payment in full" when there is a dispute is an accord and cashing it is satisfaction.
184
Breeder and owner sign a written agreement that owner has the option to purchase the colts foaled on breeder's farm. Nothing is said to price. After the first colt was born, owner tendered a check for $25,000. Breeder demanded $100,000. Is there an enforceable contract?
Yes. Written agreement was a offer to sale, not a contract. It become a contract once owner tendered $25,000. There may be a dispute as to the price and a court will determine a reasonable price.
185
Owner and contractor agree that contract will build a house and upon completion owner will pay $150,000. At the end of the construction, contractor telephones owner to ask if he can omit a pond because costs are too high. Owner reduces contract price to $149,500. Is the oral agreement enforcable?
Yes. Each party gave new consideration in the modification. Only needs to be in writing if the modification would come under the statute of limitations. In this case it does not apply.
186
Promisor of a contract with an intended third party beneficiary assigns their contract to a later party. If the later party breaches, who can the intended third party beneficiary sue?
Both promisor and assignee (later party)
187
Jeweler sent e-mail to dealer offering to sell 100 ounces of gold for $900 per ounce. Dealer responds "What are your terms?" Jeweler replies "FOB, jeweler place of business." Dealer replies with acceptance. Who must pay for delivery?
Dealer because of the FOB term. FOB obligates seller to get the goods to the location indicated after the term.
188
Buyer contracts with dealer to purchaser 500 shoes at $10 each. Dealer had an outstanding debt to a shipper. Dealer assigns all proceed under the contract to the shipper. Dealer notified the buyer. Upon receipt of the good, only 90% were conforming and dealer tender partial payment to dealer. Dealer does not pay shipper and is never heard from again. Shipper sues buyer. Result?
Shipper will prevail because Buyer has notice of the contract which had been assigned.
189
Store had a contract with supplier to purchase 500 items at $10 each. Upon receiving the items, the store discovered 20% were defective. The store sent a partial payment. Was this an effective rejection?
No. Must give notice to the seller because buyer accepted part of the items. Buyer must give seller notice to seasonable correct defects.
190
Owner advertised land for sell of 40 acres for $10,000 per acre. Rancher was interested and visited land and orally agreed to purchase all of the land for $400,000. A written contract was made, but the price was not included. Later, rancher changed his mind. Can owner hold rancher in breach of contract?
No. Statute of Frauds will prevent recovery. Price is an essential element of land contracts and must be included to avoid the statute of frauds.
191
Owner advertised land for sell of 40 acres for $10,000 per acre. Rancher was interested and visited land and orally agreed to purchase all of the land for $400,000. A written contract was made, but the price was not included. Later, rancher changed his mind. Can the oral testimony of price be admitted under the parol evidence rule?
Yes evidence will not be barred by parol evidence.
| However, no recovery because Statute of Frauds requires price, as an essential element, in land sale contracts.
192
A store needs more jackets. On 5-1, store phones manufacturer to order 500 jackets at $35, the price listed in the manufacturer's catalog. On 5-3, the manufacturer mails a letter stating that the jackets are now $37 and delivery is on 5-20. On 5-5, store receives the letter and does not respond. On 5-19, items are received. When was the contract formed?
5-3 date of the contact.
| An offer to buy goods for shipment is construed as inviting acceptance by either a promise to ship or shipment.
193
A store needs more jackets. On 5-1, store phones manufacturer to order 500 jackets at $35, the price listed in the manufacturer's catalog. On 5-3, the manufacturer mails a letter stating that the jackets are now $37 and delivery is on 5-16. On 5-5, store receives the letter and does not respond. On 5-14, store receives a better offer from a different contractor and calls manufacturer to cancel. On 5-16, items are received. Who prevails?
Manufacturer because letter on 5-3 was acceptance (promise to ship) and enforceable contract.
Buyer has 10 days to object to a written confirmation of an oral contract.
194
School sends a form with term stating that the offers to supply chairs for the high school must be held open for 4 months. A contract upon receiving the form call the school and told them that he would supply the chairs within 1 month for $20 each. 1 month later, contractor sent a letter revoking the offer. Result?
No contract, because offer was revoked.
The UCC firm offer rule only applies when the offeror signs a writing agreeing to hold the offer open (UCC provides up to 3 months). The offeree and not offeror signed the writing. No firm offer and can be revoked.
195
If writing by merchant agrees to keep the offer open for five months, what is the effect under the UCC?
Time period that extends beyond three months does not invalidate firm offer. Firm offer will stand for three-month maximum.
No consideration required under UCC.
196
Owner of a car told neighbor that he was interest in selling car but did not know what price to ask. Neighbor said that he was pay $5,000 if he could get financing. Neighbor suggested that the owner give him 10 days to get financing. The parties reduced the agreement to writing. What type of contract?
Unilateral contract. Acceptance by completion.
197
Owner of a car told neighbor that he was interest in selling car but did not know what price to ask. Neighbor said that he was pay $5,000 if he could get financing. Neighbor suggested that the owner give him 10 days to get financing. The parties reduced the agreement to writing. Is this a promissory estoppel situation?
No. Promissory estoppel requires that a promisee detrimentally relies on promise that promisor should have reasonable foreseen will cause such reliance.
This is a unilateral contract.
198
A friend of an artisan told the artisan that for 7% the friend would find a buyer who would pay at least $40,000 for the latest piece of art work. Artisan said nothing. A week later, the friend told the artisan that she found a prospective buyer. The artisan asked for the buyer's phone number and arranged a sale. The friend demanded the commission and the artisan refused to pay. Result?
Friend will prevail because there was a contract and acceptance of the offer by conduct (asking for the buyer's phone number)
- acceptance tested by an objective standard.
199
Retailer sends supplier an order form for 400 items at a total price of $30,000. Supplier sends a purchase order form back that contains the same terms as retailer's order form, but includes an arbitration clause. Is there valid acceptance? Does the arbitration clause become part of the contract?
Yes valid acceptance, but the arbitration clause is not part of the agreement. Items that materially alter original terms (change a party's risk or remedies available) are not part of the contract.
UCC rejects the mirror image rule.
200
In response to an order for 100 items at $10 each, supplier sent 90 items and 10 non-conforming goods. What are the buyer's remedies?
1) accept the conforming part of the shipment and reject the rest, but would need to pay $900 minus any damages
2) reject entire shipment and recover against supplier for breach of contract
201
Shipment of nonconforming goods under the UCC is?
Acceptance of contract and breach of contract
exception is whether there seller seasonably notifies buyer of nonconforming goods and this is a counteroffer that can be accepted or rejected by buyer.
202
Under the UCC what is a shipment of nonconforming goods with a seasonably notice that shipment is an accommodation?
Counteroffer that buyer and accept or reject
| - if accepted, then pay full contract price
203
In response to an order for 100 items at $10 each, supplier sent 90 items and 10 non-conforming items with a note that there is not enough inventory and that supplier would make up the shipment. What are the buyer's remedies?
1) accept the shipment and pay full contract price
2) reject entire shipment and have no further recovery
This is an accommodation notice.
204
B offers $500 for A for services. A replies and says no less than $600. Later A sends a note to perform services for $500. B says nothing. A completes the services. If A brings an action solely for breach of contract, what result?
No contract. Counteroffer destroyed original offer and second offer never accepted. Second offer is not acceptance of first offer.
205
Buyer sends order form to seller. Seller replies with a purchase order with an additional term that is not a material change, i.e. delivery date. Buyer objects to the additional terms. Buyer and seller are merchants. Is there a contract?
Yes there is a contract, but new terms are not included.
If Buyer does not object, then additional term is included.
206
Buyer sends order form to seller stating that acceptance is expressly limited to the terms of the offer. Seller replies with a purchase order with an additional term. Is there a contract?
No. Acceptance is limited to original offer.
207
One brother told a younger sister that he would pay her $10,000 if she showed up to work, sober and by 9 am, for the next 10 months. Nine months later, brother dies. After 10 months, is sister entitled to payment from Brother's estate?
Yes it is a valid contract. Death does not extinguish this type of obligation.
- estoppel is not need because there is a valid contract
208
Promise to answer for debts of another must be in ______ to be enforced
writing
| Statute of Frauds for suretyship
209
One brother told a younger sister that he would pay her $10,000 if she stopped using illegal drugs for the next 10 months. After 10 months, is sister entitled to payment from Brother?
No. Lack of consideration because not giving up anything that sister can legally do.
210
What is an exception to the Statute of Frauds for suretyship guarantee?
Main purpose is to benefit the guarantor and then there is no writing requirement.
211
Homeowner receives several bids ranging from $5,200 to $6,200 for new driveway and one bid from contractor for $4,400. Homeowner accepted contractor, but contractor realizes that it a clerical error and it should be $5,400. Can homeowner enforce agreement for $4,400?
Yes, unless the homeowner had reason to know of the unilateral mistake.
212
Homeowner receives several bids ranging from $5,200 to $6,200 for new driveway and one bid from contractor for $440. Homeowner accepted contractor, but contractor realizes that it a clerical error and it should be $5,400. Can homeowner enforce agreement for $440?
No, because homeowner should have know that it was an error. Unilateral mistake cannot be taken advantage of.
213
Original contract was for $8000 to build a shed for homeowner. After builder began, he needed another $750 to complete shed and homeowner agreed to the extra amount. After shed is built, the homeowner only paid $8000. Builder sued. Result?
Homeowner, no consideration for modification. Builder already under a preexisting duty to build the shed.
No enforcement of modification.
214
Contract between merchants and one party sends a written confirmation of oral agreement. Can this satisfy the Statute of Frauds?
Yes, if other party does not object within 10 days after written confirmation is received.
215
In Aug. stadium enters into written agreement with baker for 500 pretzels to be delivered on three days in Sept. Payment to be made to creditor of baker. Prior to the end of Aug., baker wanted to avoid obligation, what must baker do?
Baker cannot rescind a valid contract unilaterally.
Both parties make agree to rescind contract so long as duties are executory on both sides. Stadium must assent to rescission with baker since neither performed.
216
In Aug. stadium enters into written agreement with baker for 500 pretzels to be delivered on three days in Sept. Payment to be made to creditor of baker. Prior to the end of Aug., baker wanted to avoid obligation, must baker get the consent of the creditor to rescind contract?
No - creditor's rights have not vested. Only need consent of stadium to rescind since duties are executory.
217
An intended third party beneficiary rights can vest when?
1) third party manifests assent to promise in a manner invited by parties
2) third party brings suit to enforce the promise
3) third party changes his position in justifiable reliance on the promise
218
When can the original parties modify or change the agreement involving an intended third-party beneficiary?
Up until the third party beneficiary party vests.
219
Third party beneficiary sues promisor on contract, what defenses may be raised by promisor?
Promisor can raise any defense against promisee.
220
Third party beneficiary sues promisor on contract, can promisor use a defense of the promisee against third party?
No. Not a defense.
221
Does vesting occur when the third party beneficiary learns of the contract?
No. Merely being aware or notified is not sufficient for vesting.
222
In a contract for good, seller has the risk of loss until the goods make it to the FOB _______, thereafter buyer the risk?
destination. Seller bears risks, including whether the goods are stolen.
223
Baker in Ga contracts with grower in ND to purchase wheat. Written contract states that grower will deliver wheat FOB Louisville. Grower assigns all rights to distributor under contractor. When wheat is in route to Louisville it is destroyed. Baker breaches suit against grower. Result?
Baker will prevail and will recover the amount necessary to replace wheat over the contract price.
224
Baker in Ga contracts with grower in ND to purchase wheat. Written contract states that grower will deliver wheat FOB Louisville. Grower assigns all rights to distributor under contractor. When wheat is in route to Louisville it is destroyed. Baker breaches suit against grower. Can Baker recover full contract price?
No, unless the full contract price is already paid and Baker wishes to cancel contract.
225
Debtor owes creditor $1800. Creditor assigns right to payment to bank. Creditor tells bank. Debtor pays the creditor, but creditor does not pay bank. Bank seeks to collected from debtor. Result?
Assignment is revoked by creditor by collecting money from debtor. No consideration given for assignment (gratuitous assignment is effective).
226
Can an assignment that is given with consideration be revoked?
No.
227
Can expression of doubt be sufficient grounds to bring an action for anticipatory repudiation of contract?
No. need unequivocal indication that cannot or will not perform.
Repudiation does not need to be in writing.
228
Can a performance contract for a year be cancelled by manager if performer is late 10 in showing up for performance?
No - minor breach, with little damage. Cannot cancel entire contract.
229
Is a delay in starting to build an add-on to a restaurant a breach of the contract?
No, not a breach of a contract.
230
Is a delay in starting to build an add-on to a restaurant a breach of the contract in a nonmaterial matter?
No - not a breach of the contract.
231
What is the measure of damages for buyer that backs out of the deal from a volume seller of goods?
Difference between wholesale price and contract price = lost profits - any deposit
232
In a requirement contract, the supplier after three months tells buyer that it can no longer supply the item unless the price is increased by $50 per item. What is the measure of the buyer's damages?
The cost to cover items from a different supplies plus any consequential damages such as lost profits from the sale of those items.
233
When the seller of goods is a merchant, when does the risk of loss pass to the buyer?
Risk of loss does not pass to buyer until buyer has possession.
234
Can a buyer reject non-conforming goods is the buyer discovers a minor breach after acceptance?
No. Acceptance generally terminates right to reject, except for material breaches that could not be discovered when accepted.
235
Store and supplier had a written 5-year requirement contract for goods that contained a non-assignment clause. Shortly after the contract was assigned, the supplies assigned the contract to a creditor as security. The store continue to order and pay the supplier. What is the effect of the non-assignment clause?
Assignment clause is not breached and assignment is effective.
Under UCC a prohibition of assignment is construed as only barring the delegation to the assignee of assignor's performance.
236
Retailer and supplier enter into a supply agreement and supplier assigns the contract to a wholeseller for consideration. Retailer, unaware of assignment, sends payment to supplier. Who is liable to wholeseller?
Supplier (assignor) is liable for full amount to wholeseller
237
Woman owed her auto mechanic $2,000. Debt was unpaid and became barred by statute of limitations. Woman agreed in writing to pay the mechanic $1,500, but failed to pay. If the mechanic sues the woman, what result?
For mechanic because there was a writing.
238
If there is an unilateral contract and a party starts performing and then discovers the contract is revoked by the offeree, can the party continue performing and demand enforceable of contract?
Yes, unilateral contracts become irrevocable as to that person, despite notice.
239
If there is an ambiguity in a contract and one party knew of ambiguity, how will the contract be enforced?
Enforced according to intent of party who was unaware of ambiguity.
240
If a manufacturer ships conforming goods and non-conforming goods with a note regarding the accommodation, is the shipment a breach of the contract under the perfect tender rule?
No. Only a breach of contract under the perfect tender doctrine if there is no note of accommodation.
241
If a manufacturer ships conforming goods and non-conforming goods with a note regarding the accommodation, is the shipment a counteroffer?
Yes. Buyer can accept or reject the shipment.
242
Farmer orally agreed to lease tractor to worker for $500. When reducing the agreement to a writing, there was a clerical error and the price was $300 and neither party noticed the mistake before signing it. When payment was due, the worker refused to pay more than $300. Best argument for farmer?
parties made a mistake in integration
243
Can a partial integration be contradicted?
No, only supplemented by proving up consistent additional terms.
244
A builder contracted with a homeowner to build a house. While constructing the home, a rain storm eroded the law and prevented the builder from completing the construction of the house. If the owner brings an action must be builder perform?
No, discharged due to impracticability of performance.
| Defense to breach of contract for nonperformance.
245
A builder contracted with a homeowner to build a house. While constructing the home, a rain storm eroded the law and prevented the builder from completing the construction of the house. Is it relevant that completing the house would cause the builder to become bankrupt?
No, not relevant.
| Builder would have a defense of impracticability
246
Can there be an accommodation by shipping non-conforming goods on a contract?
Accommodation only applies to where there is no contract and seller is accepting by a counteroffer known as an accommodation.
247
In a requirements contract, what is required of the buyer?
exclusivity to make all purchases from seller, otherwise the consideration is illusory
Seller can sale to anyone.
248
A contract is executory on both sides and one party unequivocally notifies the other party that they will not perform, what can the non-breaching party do?
Sue immediate due to the anticipatory repudiation.
Non-breaching party does not need to provide notice.
249
One party executes document to bank stating that "bank is entitled to collect debt from my share of the contract with other party." What is strongest argument that the other party does not need to make an accounting to the bank?
Bank is not an assignee of the rights under the contract.
250
Can a contractual duty be delegated if performance by the delegate will materially change the obligee's expectancy under the contract?
No. Cannot substitute if there is a material change.
251
Does supervening illegality revoke an offer?
Yes can revoke an offer before acceptance.
If supervening illegality arises after contract, then it discharges the parties.
252
Does supervening illegality revoke an offer that has an option and acceptance is made prior to the end of the option?
Yes. If illegal prior to acceptance then offer is deemed revoked.
