Contracts Exam III Flashcards
1
Q
Alexus and Kaitlyn orally agree to marry three years later. is the contract enforceable?
A
The contract is unenforceable because not to be performed within a year, even though it is excepted from the provision for contracts in considerations of marriage.
2
Q
In consideration of Alexus’s promise to marry Kaitlyn, Kaitlyn orally promises to marry Alexus and to settle Black acre upon Alexus.
A
Kaitlyn’s promise is within the SOF
3
Q
Kaitlyn offers to marry Alexus. To induce Alexus to accept the offer, Kaitlyn orally promises to settle property upon Alexus. Alexus accepts the offer.
A
Both promises to marry and Kaitlyn’s promise to make a settlement are within the SOF
4
Q
In consideration of Alexus’s promise to marry Kaitlyn, Kaitlyn orally promises to marry Alexus and to forego the rights which the law allows Kaitlyn with reference to Alexus’s property.
A
Kaitlyn’s promise is within the SOF.
5
Q
In consideration of Alexus’s marrying Kaitlyn, Anna orally promises Alexus a settlement.
A
Anna’s promise is within the SOF.
6
Q
Alexus and Kaitlyn mutually promise that each will settle 5,000 on Alexus’s daughter when she marries Kaitlyn’s son.
A
The promises are not within the SOF, since the marriage is a condition rather than consideration.
7
Q
Alexus and Kaitlyn are engaged to marry. In consideration of Alexus’s promise that when married they will live in a house owned by Alexus, Kaitlyn promises to settle 10,000 upon her.
A
The promises are NOT within the marriage provision of the SOF.
8
Q
• Alexus leases to Kaitlyn under a written lease terminable at the end of any year by written notice given by either party. During the third year of the lease, in consideration of a loan by Kaitlyn, Alexus orally promises to not terminate the lease before the end of the fourth year.
A
The oral agreement is not a lease or contract to lease but it is a contract not to be performed within a year and is within the one-year provision of a SOF enacted in the original English form.
9
Q
• Alexus promises Kaitlyn to transfer Black acre to Kaitlyn or to Anna for a price to be paid by Kaitlyn.
A
Alexus’s promise is within the SOF, whether or not Kaitlyn is committed to buy.
10
Q
Alexus owes Kaitlyn 1,000. In consideration of Kaitlyn’s promise to extend the time of payment three months, Alexus promises orally that he will sell his land and apply the proceeds as far as necessary to pay the debt.
A
Alexus’s promise to sell the land is within the SOF
11
Q
• Alexus and Kaitlyn orally promise Anna a share in a partnership of which Alexus and Kaitlyn are partners. Anna orally promises to contribute her services to the firm business. Alexus and Kaitlyn own land as part of the partnership assets
A
The promises are with the statute.
12
Q
• For consideration, Alexus promises Kaitlyn to devise Blackacre to Kaitlyn.
A
Alexus’s promise is within the Statute.
13
Q
• Alexus promises Kaitlyn, her daughter, that she will die intestate so that Kaitlyn will inherit a share in a parcel of land.
A
Alexus’s promise is not within the land contract provisions of the SOF. The contemplated transfer to Kaitlyn is a transfer by operation of law, not a transfer by virtue of the contract.
14
Q
• Alexus orally promises Kaitlyn to share with him whatever proceeds Alexus obtains from the sale of Blackacre.
A
Alexus’s promise is not within SOF.
15
Q
• Alexus promises to pay 5,000 to Kaitlyn for a conveyance of Blackacre either to Alexus or to a third person.
A
Alexus’s promise is within the SOF.
16
Q
• Alexus promises to support Kaitlyn during Kaitlyn’s life in consideration of Kaitlyn’s promise to convey Blackacre to Alexus.
A
Alexus’s promise is within the SOF.
17
Q
• Alexus and Kaitlyn make an oral contract for the sale of Blackacre by Kaitlyn for 10,000, and Alexus gives Kaitlyn a check for 1,000 as a down payment. Kaitlyn is ready and willing to perform, but Alexus stops payment of the check.
A
The SOF does not prevent enforcement of Alexus’s obligation on the check.
18
Q
• Alexus promises Kaitlyn to transfer Blackacre to Kaitlyn, in consideration of Kaitlyn’s promise to pay Alexus 5,000. Alexus tenders a deed of Blackacre to Kaitlyn and Kaitlyn accepts the deed.
A
Kaitlyn’s promise is no longer within the land contract provision of SOF.
19
Q
• Alexus owes Kaitlyn 10,000. Alexus promises to convey Blackacre to Kaitlyn in full settlement of the debt, and Kaitlyn promises to accept the conveyance in full settlement. Alexus tenders to Kaitlyn a deed to Blackacre and Kaitlyn accepts the deed.
A
The SOF does not prevent enforcement of Kaitlyn’s promise.
20
Q
• Alexus owes Kaitlyn 1,000. In consideration of Kaitlyn’s promise to extend the time of payments three months, Alexus promises orally that he will sell a parcel of land and apply the proceeds as far as necessary to pay the debt. Alexus sells the parcel.
A
Alexus’s promise is no longer within the land contract provision of SOF.
21
Q
• Alexus makes an oral contract with Kaitlyn to devise Blackacre to Kaitlyn and executes a will containing the devise and a recital of the contract. The will is revoked by a later will.
A
The revoked will is a sufficient memorandum to charge Alexus’s estate.
22
Q
• Alexus publishes in a newspaper an offer to buy certain goods, stating the terms of her proposal, and her name is printed under the advertisement. Kaitlyn accepts offer.
A
The advertisement is a sufficient memorandum to charge Alexus.
23
Q
• Alexus writes and signs in pencil a receipt for 1,000 which recites that the money is received from Kaitlyn as part payment of the price 5,000 for a parcel of land.
A
The advertisement is a sufficient memorandum to charge Alexus on the agreement recited.
24
Q
• Alexus company executes a written contract with Kaitlyn by which Kaitlyn purchases certain accounts owned by Alexus company. As part of the same transaction, Anna, the president of Alexus Company, signs a contract of guaranty printed at the foot of the same paper: “In order to induce Kaitlyn to enter into an agreement dated ___ with ___ (hereinafter referred to as the client), the undersigned agrees to be liable for due performance of all the client’s agreement with Kaitlyn.” The blanks are not filled in.
A
The quoted words are sufficient to identify the obligation guaranteed.
25
• Alexus and Kaitlyn make an oral contract for the sale of goods and sign the following memorandum: Sept. 19th 12mos. 300 bales S.F drills… 7 ¼ and 100 cases blue do….8 3/4/ Credit to commence when ships sails; not after Dec. 1- delivered free of charge for the truckage (signed)”
If persons acquired with the usage of the business would understand its meaning, the memorandum is sufficient.
26
• Alexus and Kaitlyn enter into an oral contract by which Alexus promises to sell and Kaitlyn to buy such of Kaitlyn’s iron in his mill year as he may decide to sell. Alexus memorandum describes the subject matter of the contract as “all Alexus’s iron which he may decide to sell”
the description is sufficient.
27
• Alexus and Kaitlyn enter into a contract by which Alexus promises to sell and Kaitlyn to buy a certain lot of hops belonging to Alexus. Alexus telegram from Kaitlyn refers to subject matter as number 13. This refers to a sample submitted by Alexus to Kaitlyn by mail with a numbered tag attached and referring by trade usage to a specific lot.
The description is sufficient.
28
• Alexus and Kaitlyn enter into a written contract for the employment of Kaitlyn as Alexus’s sales manager for a term of two years. At the end of the two years, Alexus and Kaitlyn orally agree to extend the employment for three more years at an increased salary. A year later Alexus signs the following memorandum: “It is understood that the arrangements made for employment of Kaitlyn in our business on Jan. 1, 1977, for period of three years from that date at a salary of 30,00 per year, continues in forces until Jan. 1, 1980”
The memorandum sufficiently identifies the nature of Kaitlyn’s employment.
29
• Alexus and Kaitlyn are negotiating for the sale of Alexus’s restaurant to Kaitlyn. Kaitlyn gives Alexus a check for 500 bearing the notation “tentative deposit on tentative purchases of 1415 City Line Ave., Phila. Restaurant, Fixtures, Equipment, Good Will” Later Alexus and Kaitlyn orally agree on terms of sale.
The quotes memorandum is not sufficient to indicate that on contract for sale has been made.
30
• Anna and Barbara make an oral contract for the sale of Blackacre and sign the following memorandum: “Anna agrees to sell and Barbara agrees to buy Blackacre for 10,000.” Anna is agent for Alexus, Barbara is agent for Kaitlyn, and each is acting on behalf of his principle.
The memorandum is sufficient to charge Anna.
31
• An otherwise sufficient memorandum of an oral contract for the sale of Blackacre states that “the owner of Blackacre” promises to sell it. The memorandum is signed by Kaitlyn, and Kaitlyn is agent of Alexus, the owner of Blackacre, acting on Alexus’s behalf.
The memorandum is sufficient to charge Alexus.
32
• Alexus, president, and principal stockholder of Alexus company gives Kaitlyn her personal check for 10,000 and a written offer to buy Blackacre from Kaitlyn on stated terms. The offer, signed by Alexus, states that “the offer to purchase is from a company owned by Alexus” Kaitlyn accepts the offer by a signed writing. Neither the offer nor the acceptance identifies the purchase except by the quoted language.
The identification is sufficient.
33
• Alexus and Kaitlyn make oral agreement for the sale of a parcel of land by Alexus to Kaitlyn. Kaitlyn pays Alexus 50 and Alexus signs and delivers to Kaitlyn a receipt which identifies the parcel and accurately states the terms of payment but does not name or describe Kaitlyn or her agent. In Kaitlyn’s suit for specific performance, Alexus defends on the ground of Kaitlyn’s inequitable conduct in the negotiations.
Kaitlyn is sufficiently identified by her possession of the memorandum.
34
• Alexus and Kaitlyn enter into an oral contract for the sale of Blackacre by Alexus and Kaitlyn. A memorandum is made an signed which states sufficiently the parties, subject matter and terms of oral bargain except that, though the parties in fact orally agreed that the price should be payable on delivery of a deed, the memorandum contains no statement as to when the price is payable.
The memorandum is sufficient
35
• Alexus and Kaitlyn enter into an oral contract for the sale of Blackacre by Alexus to Kaitlyn, and both sign a memorandum providing for a “purchase money mortgage in the amount of 18,000 payable for 15 years at 5%. Kaitlyn claims a right to pay 142 per month; Alexus claims a payment of 100 a month plus monthly interest at 5%. No usage is shown.
The memorandum is not sufficient to support an action by Kaitlyn for specific performance on her terms.
36
• Alexus lends 1,000 to Kaitlyn, and as part of the transaction Anna orally agrees to guarantee repayment. To evidence the guaranty, Anna signs a written promise to pay Alexus 1,000.
The written promise is a sufficient memorandum without any statement of consideration
37
• Alexus agrees not to sue Kaitlyn Company on a debt for goods sold and delivered, in consideration of Anna’s guaranty of payment for past and future deliveries to Kaitlyn up to 3,000. Anna signs the following guaranty: “I, Anna, do hereby guarantee to Alexus the payment of any sums due or that may become due up to sum of 3,000 on such goods as Kaitlyn may have bought or shall buy from Alexus. (signed)” Alexus makes no further deliveries.
The memorandum is not sufficient to charge Anna, since it omits any mention of Alexus’s return promise.
38
• Alexus and Kaitlyn orally agree on the sale of a farm by Kaitlyn to Alexus for 135 an acre. Alexus dates and signs the following memorandum: “received from Kaitlyn 100 as payment on 84 acres farm, (at 135 an acre) balance to be paid when deed and abstract are presented”
The memorandum is sufficient to charge Alexus if the bracketed words are included but not if they are omitted.
39
• Alexus signs and sends to Kaitlyn a letter stating that she is interested in leasing a parcel of land from Kaitlyn. After six months of negotiations Alexus and Kaitlyn orally agree on an eight-year lease of the parcel with an option to purchase, and both sign a memorandum which is sufficient except that it does not identify the land.
The two documents together constitute a sufficient memorandum to charge Alexus.
40
• Alexus and Kaitlyn make an oral contract within the Statute. Alexus writes and signs a letter to Kaitlyn which is a sufficient memorandum except that it does not identify Kaitlyn.
The deficiency may be supplied by the name and address of the envelope in which the letter arrives.
41
• Alexus and Kaitlyn make an oral contract within the Statute. A memorandum of the contract is made on two sheets of paper which are not connected physically, and Alexus signs one of the sheets.
The two sheets may be read together as a memorandum to charge Alexis if an incomplete sentence on one is completed on the other, if the contract partially disclosed by one is clearly the same contract partially disclosed by the other, or if the fact that one is a continuation of the other is otherwise shown by clear and convincing evidence.
42
• Alexus and Kaitlyn enter an oral contract within the Statute. A memorandum of the contract is made on the two sheets of paper. The contents of the sheets do not show that they belong together, by Alexus signs one and then fastens the sheets together with a clip.
Even though the clip is later removed, the fastening is a sufficient adoption of Alexus’s signature with reference to both sheets to charge Alexus, but only if the evidence of the fastening is clear and convincing.
43
• Alexus agrees orally to employ Kaitlyn for two years. An unsigned memorandum of the contract, stating its terms, is prepared at Alexus’s direction. Later Kaitlyn begins work and pay rill cards are made and initialed by Alexus which state some of the terms but not the duration of the employment
If it is clear that the unsigned memorandum and the payroll cards refer to the same agreement, they may be read together as a sufficient memorandum to charge Alexus.
44
• Alexus and Kaitlyn enter into a contract within the Statute and sign a memorandum, otherwise sufficient, stating that the price to be paid shall be the same as the price agreed upon by Anna and Barbara in a similar contract expected to be made on the following day.
The memorandum is sufficient if it accurately states the entire agreement between Alexus and Kaitlyn. The contract made by Anna and Barbara is an event of independent significance and may be referred to for the price whether or not there is a memorandum signed by Anna or Barbara.
45
• Alexus and Kaitlyn enter into a oral contract for the purchase and sale of a tract of land and sign a memorandum, otherwise sufficient, stating that the contract is “contingent upon Alexus’s ability to arrange 7,000 purchase money mortgage” Alexus subsequently applies in writing to a financial institution for such a mortgage loan on specific terms as to duration interest rate and payment.
The mortgage loan application may be read with the memorandum to satisfy the Statute against either party.
46
• Alexus and Kaitlyn enter an oral contract for the sale of Blackacre. Alexus writes and signs a letter to her friend Anna containing an accurate statement of the contract
The letter is sufficient memorandum to charge Alexus even though it is never mailed.
47
• Alexus writes to Kaitlyn following letter: “Dear Kaitlyn, I will employ you as superintendent of my mill for a term of three years from date, at a salary of 28,000 a year. Let me know if you wish to accept this offer (signed)” Kaitlyn accepts the offer orally.
The letter is a sufficient memorandum to charge Alexus.
48
• Alexus writes and signs a letter to her agent Anna authorizing Anna to make the offer stated in above (“Dear Kaitlyn, I will employ you as superintendent of my mill for a term of three years from date, at a salary of 28,000 a year. Let me know if you wish to accept this offer (signed)” ). Anna orally agrees makes the offer, and Kaitlyn orally accepts it.
Alexus’s letter is not a sufficient memo to charge her.
49
• Alexus and Kaitlyn enter into a oral contract by which Alexus promises to sell and Kaitlyn promises t buy Blackacre for 5,000. Alexus writes and signs a letter to Kaitlyn in which she states accurately the terms of the bargain, but adds, “Our agreement was oral. It, therefore, is not binding upon me, and I shall not carry it out”
the letter is a sufficient memorandum to charge Alexus.
50
• Alexus and Kaitlyn make an oral contract within the Statute. Alexus writes a memorandum stating the terms on a form beaing Alexus’s name as a printed heading. At the foot of the form is the word Accepted followed by a blank space for a signature, which is not filled in.
In the absence of other evidence of intention, the form is not signed by Alexus.
51
• Alexus and Kaitlyn make an oral contract within the Statute. Alexus writes a memorandum stating the terms which begins, “I, Alexus, make the following contract with Kaitlyn” Alexus delivers the memorandum to Kaitlyn.
This is Alexus’s signature if the trier of fact infers Alexus’s intent to authenticate the writing.
52
• Alexus and Kaitlyn make an oral contract within the Statute. A clerk makes a written statement of the contract, and Alexus writes at the top thereof “OK” followed by Alexus’s initials.
This is a signature by Alexus.
53
• Alexus has a number of forms of letters printed ending with the words, “yours very truly, Alexus” With Alexus authority a clerk fills in one of the forms with the terms of an offer to Kaitlyn and sends it to Kaitlyn. Kaitlyn accepts orally.
Alexus’s printed name is her signature.
54
• Alexus and Kaitlyn agree by an unsigned writing that Alexus will sell Blackacre to Kaitlyn for 5000. Kaitlyn pays the price to Alexus as agreed, and Alexus accepts the payment but refuses to transfer the land as agreed.
Kaitlyn is not entitled to specific performance but can recover the amount of the payment.
55
• Alexus orally leases Alexus’s farm to Kaitlyn for five years, agreeing that Kaitlyn will repair the premises at prevailing wages to be credited on the rent. Kaitlyn takes possess of the farm and does 1,000 worth of repair work, using material furnished by Alexus. Alexus then seeks to evict Kaitlyn.
Kaitlyn is entitled to 1,00 less the fair rental of the farm for the period of her occupancy but is not entitled to specific performance or damages.
56
• Alexus and Kaitlyn make an oral agreement for the sale of black acre by Alexus to Kaitlyn. With Alexus’s consent Kaitlyn takes possession of the land, pays part of the price, builds a dwelling house on the land and occupies it. Two years later, as a result of a dispute over the amount still to be paid, Alexus repudiates the agreement.
Kaitlyn may obtain a decree of specific performance.
57
• Alexus orally promises to make a gift of black acre to her daughter Kaitlyn and puts Kaitlyn in possession. With Alexus’s consent Kaitlyn builds a dwelling house on the land and lives in it for twenty years until Alexus dies, paying all taxes on the land.
Kaitlyn may obtain a decrees of specified performance against Alexus’s heir or personal representative
58
• Alexus owns an unsightly vacant lot adjoining Kaitlyn’s home in a residential suburb. Alexus’s agent and Kaitlyn orally agree that Alexus will sell the lot for 1,500. Kaitlyn, a lawyer aware of the doctrine of part performance, expends 1,000 in grading and planting on the lot, but makes no payments and does not communicate with Alexus for two years. Alexus observes the grading and planting, but later denies concluding a contract or knowing that Kaitlyn claimed under a contract.
Kaitlyn is not entitled to a specific performance, since her action are not unequivocally referable to a contract for sale and recovery of the value of the improvements is an adequate remedy.
59
• Alexus leases a residence to Kaitlyn for 9 per month. After four mothes Alexus and Kaitlyn agree to a written contact for sale of the premises for 1,000 in monthly installments of 12.89, but the contract is not signed. Kaitlyn pays 12.89 each month for thirteen months and pays for taxes and insurance. Then the land increases in value because an air base is located nearby, and Alexus repudiates the contract.
Kaitlyn is entitled to specific performance.
60
• Alexus orally agrees to lease shop space in a new hotel to Kaitlyn for five years and to give Kaitlyn an option to renew the lease for another five years. At Alexus’s request Kaitlyn moves in before formal execution of a lease, deposits 5,000 with Alexus, and expends 50,000 on fixtures and improvements. Later Alexus and Kaitlyn agree on pencil corrections to a written lease and return it to Alexus’s attorney for redrafting, but no redrafted lease is submitted or executed. Kaitlyn occupies the premises and pays rent for five years, and notifies Alexus of Kaitlyn’s election to renew, but Alexus denies the existence of an option to renew.
Kaitlyn is entitled to specific performance
61
• Alexus leave 1,00 acres of land to her cousin Kaitlyn by will. Alexus’s heirs contest the will, and Kaitlyn retains her aunts Anna, an attorney, agreeing orally that Anna is to receive her fee, contingent upon success, a specific 180 acres of the land. Anna successfully defends the will, But Kaitlyn refuses to convey the land as agreed. In Anna’s uit for specific performance, Kaitlyn admits the making of the contract, but defends under the SOF.
Specific performance is granted.
62
• Alexus promises to give Anna, an adjoin landowner, first refusal in the event that Alexus sells a tract of lant. Later Kaitlyn and Anna agree orally that Anna will consent to a sale by Alexus to Kaitlyn and that Kaitlyn will then convey to Anna a fifteen-foot strip adjoining Anna’s land. Anna paying a proportionate part of the price. Anna notifies Alexus that Anna consents, and Alexus conveys the tract to Kaitlyn, but Kaitlyn repudiate her promise to convey the strip to Anna
Anna is entitled to a decrees of specific performance against Kaitlyn.
63
• Alexus, aged 55, orally promises Kaitlyn, her adopted daughter, that if Kaitlyn will quit school, live with Alexus and her sick husband and refrain from marrying until Kaitlyn is 25, help Alexus run her farm, and take care of the husband until the husband dies, Alexus will leave Kaitlyn all her property by will. Kaitlyn performs as requested until the husband dies 12 years later, except for an 8-month trip with Alexus consent. After the husband’s death, Kaitlyn at age 28 married a man of whom Alexus disapproves; Alexus thereafter refuses to have anything to do with Kaitlyn, revokes a will carrying out her promises, and makes a new will leave her property to other. Four years after the marriage Alexus dies.
Kaitlyn is entitled to specific performance.
64
• Alexus and Kaitlyn orally agree that Alexus will sell a house and lot to Kaitlyn for 10,000. Alexus signs a memorandum of the contract, but Kaitlyn does not; Kaitlyn pays 1,000 on account of the price. Alexus prepared a conveyance and delivers it in escrow to await payment, delivers possession of the land to Kaitlyn, and sells her the furniture in the house. Kaitlyn lives in the house for 6-months and plants a substantial garden but refuses to pay the balance of the price because of defects in Alexus’s title, and finally repudiates the contract shortly after the defects are cured.
Whether or not Kaitlyn would have been entitled to specific performance, Alexus is not.
65
• Alexus orally leases a storeroom to Kaitlyn for 6 years at a rental of 400 per month. In accordance with the agreement Alexus builds a balcony at a cost of 1500 which does not add to the value of the premises. Kaitlyn takes possession and pays rent for three years, and then repudiates the lease at a time when tenants have become scarce.
Alexus is entitled to specific performance.
66
• Alexus, an insurance company, orally promises to insure Kaitlyn’s house against fire for five years, Kaitlyn promising to pay the premium therefor within the week.
The contract is not within the SOF, since if the house burns and the insurer pays within a year the contract will be fully performed.
67
• Alexus orally promises to work for Kaitlyn, and Kaitlyn promises to employ Alexus during Alexus’s life at a stated salary.
The promises are not within the one-year provision of the Statute since Alexus’s life may terminate within a year.
68
• Alexus and Kaitlyn, a railway, agree that Alexus will provide grading and ties and Kaitlyn will contract a switch and maintain it as long as Alexus needs it for shipping purpose. Alexus plans to use it for shipping lumber from adjoining land which contains enough lumber to run a mill for 30 years and uses the switch for 15 years.
The contract is not within the one-year provision of the Statute.
69
• Alexus orally promises Kaitlyn to sell her five crops of potatoes to be grown on a specified farm in Minnesota, and Kaitlyn promises to pay a stated price on delivery.
The contract is within the SOF. It is impossible in Minnesota for five crops of potatoes to mature in one year.
70
• Alexus orally promises to work for Kaitlyn, and Kaitlyn promises to employ Alexus for five years at a stated salary.
The promises are with the SOF. Though the duties of both parties will be discharged if Alexus dies within a year, the duties cannot be performed within a year. The conclusion is not affected by a term in the oral agreement that the employment shall terminate on Alexus’s death
71
• Alexus orally promises to work for Kaitlyn, and Kaitlyn promises to employ Alexus for five years at a stated salary. the agreement provides that either party may terminate the contract by giving 30 day notice at any time.
The agreement is one of uncertain duration and is not within the one-year provision.
72
Alexus orally promises to work for Kaitlyn, and Kaitlyn promises to employ Alexus for five years at a stated salary.the agreement provides that Alexus may quit at any time.
The agreement is within the SOF.
73
• A, the maternal grandmother of new-born illegitimate child, agrees with Kaitlyn, the mother, that Alexus will care for the child and Kaitlyn will make support payments until the child becomes 21.
The agreement is not within the one-year provision. If the child dies within a year, the primary object of furnishing necessaries to the child will be filly performed.
74
• Alexus sells her grocery business to Kaitlyn, who pays part of the price and promises to pay the balance in a month, Alexus agreeing orally not to engage in the grocery business in the same town for five years.
The contract is not within the one-year provision of the Statute since Alexus’s death within one year will give Kaitlyn the equivalent of the full performance.
75
• Without consideration Alexus promises Kaitlyn that, so long as Kaitlyn buys through Alexus Kaitlyn’s requirements for gasoline and Alexus accepts Kaitlyn’s orders, Alexus will pay Kaitlyn an amount equal to the discount other distributors would allow Kaitlyn. For several years Alexus accepts orders from Kaitlyn.
Alexus’s promise is not within the one-year provision, since a separate contract is made each time Alexus accepts an order
76
• On December 1, 1966, Alexus and Kaitlyn contract orally for Alexus’s employment by Kaitlyn at a stated salary for a year beginning the following day.
The contract is not within the one-year provision, since the promised performance will be fully rendered before midnight on Dec. 1, 1967.
77
• On Dec. 1, 1966, Alexus and Kaitlyn enter into an oral contract for the employment of Alexus at a stated salary for the calendar year of 1967. One the first working day in 1967, Alexus presents herself for work, says “I understand these are the terms on which I am employed,” and restates the terms. Kaitlyn replies, “that is right’
though the original contract was within the SOF, the subsequent restatement makes a new contract performable within a year.
78
• Alexus sells and delivers goods to Kaitlyn in return for Kaitlyn’s promise to pay 1,000 in six months, 1,000 in a year and 1,000 in 18 months.
Kaitlyn’s promises are not within the one-year provision of the Statute
79
• Alexus promises to pay Kaitlyn 5,000 in town years in return for Kaitlyn’s promise to render a stated performance for five years. Alexus pays the 5,000 as agreed. Kaitlyn then refuses further performance
The contract is withdrawn from the operation of the Statute.
80
• Alexus and Kaitlyn contract orally for Alexus’s employment by Kaitlyn at a stated salary for the ensuing two years. Alexus works under the contract for 15 months when Kaitlyn discharges her without cause.
The contract is not withdrawn from the operation of the Statute, and Alexus may not recover damages from wrongful discharge. But Alexus may recover any unpaid salary.
81
• Alexus and Kaitlyn agree on the sale of the output of Alexus’s creamery to Kaitlyn for five years at a stated price. After four years Kaitlyn refuses further deliveries.
The contract is not withdrawn from the operation of the Statute, but Alexus may recover the contract price of the goods delivered and accepted.
82
• Alexus is lessee of a building for five years at 75 per month and has sublet it for three years at 100 per month. Alexus seeks to induce Kaitlyn to purchase the building, and to that end orally promise to assign to Kaitlyn the lease and sublease and to execute a written assignment as soon as Kaitlyn obtains a deed. Kaitlyn purchases the building in reliance on the promise
Kaitlyn is entitled to the rentals from the sublease
83
• Alexus is a pilot with an established airline having rights to continued employment and could take up to six months leave without prejudice to those rights. She takes such leave to become general manager of Kaitlyn, a small airline which hopes to explain if a certificate to operate over an important route is granted. When her six-month leave is about to expire, Alexus demands definite employment because of the fact, and Kaitlyn orally agrees to employ Alexus for two years and on the getting of the certificate to give Alexus an increase in salary and a written contract. In reliance on this agreement Alexus lets her right to return to her proper employer expire. The certificate is soon granted, but Alexus is discharged in breach of the agreement.
The SOF does not prevent recovery of damages by Alexus.
84
• Alexus orally promises to pay Kaitlyn a commission for services in negotiating the sale of a business opportunity, and Kaitlyn finds a purchaser to whom Alexus sells the business opportunity.
Alexus statute extends SOF to such promises and is interpreted to preclude recovery of the reasonable value of such services. The promise is not made enforceable by Kaitlyn’s reliance on it.
85
• Alexus renders services to Kaitlyn under an oral contract within the statute by which Kaitlyn promises to pay for the services.
On discharge without cause in breach of the contract, Alexus is entitled to the reasonable value of the services, but in the absence of additional circumstances is not entitled to damages for wrongful discharge.
86
• Alexus, an individual, contracts in June to sell at all fixed price per ton to Kaitlyn, a large soup manufacturer, the carrots to be grown on Alexus’s farm. The contract, written on Kaitlyn’s standard printed form, is obviously drawn to protect Kaitlyn’s interest and not Alexus’s; it contains numerous provisions to protect Kaitlyn against various contingencies and none giving analogous protection to Alexus. Each of the clauses can be read restrictively so that it is not unconscionable, but several can be read literally to give unrestricted discretion to Kaitlyn. In Jan, when the market price has risen above the contract price, Alexus repudiates the contract, and Kaitlyn seeks specific performance.
In the absence of justification by evidence of commercial setting, purpose, or effect, the court may determine that the contract as a whole was unconscionable when made and may then deny specific performance.
87
• Alexus, a homeowner executes a standard printed form used by Kaitlyn, a merchant, agreeing to pay 1,700 for specified application asking for payment in 60 monthly installments but specifying no rate. Four days later Alexus is informed that the credit application has been approved and is given a payment schedule calling for finance and insurance changes amounting to 800 in addition to the 1,700. Before Kaitlyn does any of the work, Alexus repudiates the agreement, and Kaitlyn sues Alexus for 800 damages, claiming that a commission of 800 was paid to Kaitlyn’s salesman in reliance on the agreement.
The court may determine that the agreement was unconscionable when made and may then dismiss the claim.
88
• Alexus, literate only in Spanish, is visited in her home by a salesman of refrigerator-freezers for Kaitlyn. They negotiate in Spanish; Alexus tells the salesman she cannot afford to buy the appliance because her job will end in one week, and the salesman tells Alexus that Alexus will be paid numerous 25 commissions on the sales to her friends. Alexus signs a complex installment contract printed in English. The contract provides for a cash price of 900 plus a finance charge of 250. Alexus defaults after paying 32, and Kaitlyn sues for the balance plus late charges and a 20% attorney’s fee authorized by the contract. The appliance cost Kaitlyn 350.
The court may determine that the contract was unconscionable when made, and may then limit Kaitlyn’s recovery to a reasonable sum.
89
• Alexus, a packer, sells and ships 300 cases of canned catsup to Kaitlyn, a wholesale grocer. The contract provides, “all claims other than swells must be made within ten says from receipt of goods. Six months later a government inspector, upon microscopic examination of samples, finds excessive mold in the cans and obtains a court order for destruction of the 270 remaining cases in Kaitlyn’s warehouse.
In the absence of justifying evidence, the court may determine that quoted clause is unconscionable applied to latent defects and does not bar a claim for damages for breach of warranty by Kaitlyn against Alexus.
90
• Alexus, a retail furniture store, sells furniture on installment credit to Kaitlyn, retaining a security interest. As Alexus knows, Kaitlyn is a woman of limited education, separated from her husband, maintaining herself and seven children by means of 218 per month public assistance. After 13 purchases over a period of five years for a total of 1,200, Kaitlyn owes Alexus 164. Kaitlyn then buys a stereo set for 514. Each contract contains a paragraph of some 800 words in extremely fine print, in the middle of which are the words, “all payments..shall be credited pro rata on all outstanding..accounts” The effect of this language is to keep a balance due on each item until all are paid for. On Kaitlyn’s default, Alexus sies for possession of all the items sold.
It may be determined that either the quoted clause or the contract as a whole was unconscionable when made.
91
• Alexus, a corporation with its principal office in state X, contracts with Kaitlyn, a resident of state X. The contract is made on Alexus’s standard printed form, which contains a clause by which the parties submit to the jurisdiction of a court in State Y, 200 miles away.
No reason for the clause appears except to make litigation inconvenient and expensive for Kaitlyn. The clause is unconscionable
92
• Alexus, a finance company, lends money to Kaitlyn, a manufacturing company, on the security of an assignment by Kaitlyn of its accounts receivable. The agreement provides for loans of 75% of the value of assigned accounts acceptable to Alexus and forbids Kaitlyn to dispose of or hypothecate any assets without Alexus’s written consent. The agreed interest rate of 18 would usurious but for a statute precluding a corporation from raising the defense of usury. Substantial advances are made, and the balance owned is 14000 when Kaitlyn becomes bankrupt, three months after the first advance, Alexus determination that the agreement is unconscionable on its face, without regard to context, is error.
The agreement is unconscionable only if it is not a reasonable commercial device in the light of all the circumstance when it was made.
