Term
Contract Question 01
Mark Fuhrman contracts to buy Whiteacre. Does Article 2 apply? |
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Definition
Contract Answer 001
No. Real property is not covered. |
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Contract Question 02
Mrs. Brady hires Michael Jackson to babysit the "bunch." Does Article 2 apply? |
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Definition
Contract Answer 002
No. Service contracts not covered. |
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Contract Question 03
Delta Airlines agrees to sell 4 DC-9's to United Airlines for $60 million. Does Article 2 apply? |
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Definition
Contract Answer 003
Yes. Aircraft are movable personal property, i.e. goods. |
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Contract Question 04
Ted Koppel agrees to sell his toupee to Kojak for $10. Does Article 2 apply? |
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Definition
Contract Answer 004
Yes. A toupe is movable personal property. Art 2 covers every sale of goods, no matter the value, no matter the parties. |
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Contract Question 05
Citibank agrees to lend United $60 million to buy the DC-9's from Delta. |
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Definition
Contract Answer 005
Subject matter is a loan. Loans and credit arrangements are governed by common law. The purpose for the loan is irrelevant;apply common law. |
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Contract Question 06
Ken Lay buys the "Guide to Accounting," which includes a free class. Does Article 2 apply? |
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Definition
Contract Answer 006
This is a mixed contract - a contract for goods and services. Pick which law governs by determining which item is more important. The book is the main point of the contract, the class is an add-on, an incentive. Apply Art 2. |
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Contract Question 07
I hire Art Deko to paint my house for $3,000, including the paint provided by Art. Does Article 2 apply? |
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Definition
Contract Answer 007
Mixed contract. Services (painting) and goods (the paint). Primarily about services so apply the common law. |
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Contract Question 08
Delta Airlines agrees to lease a DC-9 to United Airlines. Does article 2 apply? |
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Definition
Contract Answer 008
If in NY it's Art 2A. Lease of goods (airplane). |
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Contract Question 09
You lease a car from Avis Rent-a-Car. Does article 2 apply? |
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Definition
Contract Answer 009
If in NY it's Art 2A. Art2A applies to every lease of goods, whether by business or an individual, i.e. "a consumer" |
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Contract Question 10
You agree to lease an apartment from Helmsley Realty. Does article 2 apply? |
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Definition
Contract Answer 010
No. Not Art 2A either, because not a lease of goods. It's a lease of real property. |
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Term
| Contract Question 11;;What is a contract? |
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Definition
| Contract Answer 011;;Contract is a legally enforceable agreement. |
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Term
| Contract Question 12;;What is a quasi-contract? |
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Definition
| Contract Answer 012;;Quasi-contract is an equitable remedy that applies whenever the application of contract law yields an unfair or inequitable result. Quasi-contract is not limited by contract rules, but is governed by equitable concepts. It protects against unjust enrichment. It |
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Term
| Contract Question 13;;Ben Affleck orally agreed to work for WB for 5 years for $20M per film. After "Gigli" bombed, WB refused to pay Ben for the film. The Statute of Frauds bars Ben from enforcing the contract. Can Ben recover from WB in quasi-contract? |
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Definition
| Contract Answer 013;;Yes. Not "fair" if Ben can't recover because WB would get his services for free. If the result is unfair or inequitable, discuss that in your essay. Ben can recover the reasonable value of the benefit conferred, NOT the contract price. The value is usually less than the contract price. |
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Term
| Contract Question 14;;How is a unilateral contract accepted? |
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Definition
| Contract Answer 014;;A unilateral contract offer can only be accepted by performance. |
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| Contract Question 15;;IHOP advertises in the Post: "Incredible offer! Breakfast special for $2.49." Offer? |
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Definition
| Contract Answer 015;;No. Despite the wording ads aren't offers because no quantity term. If it was an offer, unlimited numbers of people could accept. This idea might be tested on the bar. |
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Term
| Contract Question 16;;Gap's ad reads: "1 blue dress just like Monica's, only $1! First come, first served." |
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Definition
| Contract Answer 016;;This is an offer because it specifies 1. the quantity and 2. the person who can accept (the first one to arrive). |
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| Contract Question 17;;Seller agrees to sell buyer a car for a reasonable price. Offer? |
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Definition
| Contract Answer 017;;No. Too vague. |
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Term
| Contract Question 18;;Flatus CafŽ offers to buy all its requirements of beans for the next 5 years for $1 per can. Offer? |
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Definition
| Contract Answer 018;;Quantity measured by buyer's needs. "All," "Only," and "Solely" likely means an offer to enter into a requirements contract. That is an offer because it is a commitment to exclusivity. |
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| Contract Question 19;;Seller accepts the CafŽ's offer. For the last 3 years, the CafŽ has ordered 1,000 cans a year. Can the CafŽ require seller to deliver 8,000 cans this year? |
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Definition
| Contract Answer 019;;No. In a volume change to a requirements contract the buyer can't take the seller by surprise. Any increase in requirements has to be in line with buyer's prior demands. If this is tested on the bar, the increase will be very large, like here (100%). |
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Term
| Contract Question 20;;S sends B a letter in which S "offers to sell B Blackacre." The letter does not state a price. Is the letter an offer? |
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Definition
| Contract Answer 020;;Determine which law applies. This is for real estate so Art 2 does not apply. Under the common law there is no offer in a sale of land unless 1. there is a description of the property and 2. the price is included. Since the price is not stated this is not an offer. |
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Term
| Contract Question 21;;S sends B a letter in which S "offers to sell B a painting of Blackacre." The letter does not state a price. Is the letter an offer? |
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Definition
| Contract Answer 021;;Paintings are goods so Art 2 applies. Under Art 2 there is an offer if the parties intended there to be an offer. A missing price term can still result in an offer, which is not the case under the common law. This is different than problem #15, where a vague price is not an offer under Article 2 or the common law. |
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Term
| Contract Question 22;;On May 15, I offer to sell Jane my 1999 Honda for $5,000. My offer provides that it will terminate on May 30. Can Jane accept my offer on June 2? |
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Definition
| Contract Answer 022;;No, past the seller's deadline. Offer's expiration date was clear. This is too easy so not on the test. |
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Term
| Contract Question 23;;On May 15, I offer to sell Jane my 1999 Honda for $5,000. My offer does not contain a termination date. Can Jane accept my offer on December 22? |
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Definition
| Contract Answer 023;;No. even if no deadline is stated, offers do expire, they lapse after a reasonable time. Seven months is not reasonable. If this is tested, there will be a long time delay like this one. |
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Term
| Contract Question 24;;What are four ways an offer can be terminated? |
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Definition
| Contract Answer 024;;(1) Lapse of Time,;(2) Offeror's revocation, if it is received before acceptance,;(3) Offeree's rejection,;(4) Death of Either Party before Acceptance. |
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Term
| Contract Question 25;;What are the two parts of indirect revocation? |
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Definition
| Contract Answer 025;;Indirect revocation consists of (1) conduct by the offeror unambiguously indicating a change of mind (2) that the offeree is aware of. Need both CONDUCT and AWARENESS. |
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Term
| Contract Question 26;;On January 3, I offer to sell Meg Ryan my Honda for $3,000. The next day, in the shower, I exclaim, "I do not want to sell my Honda to Meg." Can Meg still accept? |
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Definition
| Contract Answer 026;;Yes. Unless Meg was in the shower she is not aware of the revocation. |
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| Contract Question 27;;If I sell my Honda to Mischa Barton on January 4, can Meg still accept my offer? |
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Definition
| Contract Answer 027;;Yes. Have conduct indicating change of mind about selling to Meg but no evidence that Meg knew about that conduct. Takes both to revoke. This could be on the test. |
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| Contract Question 28;;Meg sees Mischa driving my Honda on January 5. Mischa tells Meg she bought the Honda from me the day before. Can Meg still accept my offer? |
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Definition
| Contract Answer 028;;No. Now Meg is aware of the conduct which indicates the revocation of the offer. Revocation is effective. |
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Term
| Contract Question 29;;On Monday, I offer to sell Meg my Honda. On Tuesday, I mail her a letter revoking the offer. She receives my letter on Thursday. When is the revocation effective? |
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Definition
| Contract Answer 029;;Thursday. Revocations are effective upon receipt. The mail box rule only applies to acceptances. |
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Term
| Contract Question 30;;On Monday, I offer to sell Meg my Honda. On Tuesday, I mail her a letter revoking the offer. Meg had accepted my offer on Wednesday. She receives my letter on Thursday. Deal? |
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Definition
| Contract Answer 030;;Yes. She was not aware my intent to revoke when she accepted, so revocation is ineffective. Her acceptance ends my ability to revoke - there is already an agreement. |
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Term
| Contract Question 31;;What are the four situations where an offer cannot be revoked? |
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Definition
| Contract Answer 031;;(1) Option: (a) promise to keep the offer open that's (b) paid for (consideration),;(2) Detrimental reliance that's reasonable & foreseeable,;(3) Part performance of an offer to enter a unilateral contract,and;(4) Firm offer under Article 2: a signed, written promise by a merchant to keep an offer open. |
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Term
| Contract Question 32;;P offers to paint O's house for $5,000 & promises not to revoke the offer for 7 days. Can P still revoke the offer? |
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Definition
| Contract Answer 032;;Yes. No consideration given to keep the option open. Promise to keep open in not enough |
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| Contract Question 33;;P offers to paint O's house for $5,000. P promises not to revoke the offer for 7 days in exchange for O's payment of $50. O pays $50 for the option. Can P still revoke the offer? |
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Definition
| Contract Answer 033;;No. Have a promise and consideration for that promise so it's enforceable, Parties bargained away/sold right to revoke. |
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Term
| Contract Question 34;;Columbia Law School offers me a job. I sell my house in Austin & move my family to New York in reliance on Columbia's offer. Can Columbia still revoke its offer? |
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Definition
| Contract Answer 034;;No, if my reliance is reasonable and foreseeable. Need both elements. The idea is grounded in equity but it is contract law. |
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Term
| Contract Question 35;;O offers P $5,000 to paint her house. The offer states that it can be accepted only by performance. P starts painting O's house. Can O still revoke? |
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Definition
| Contract Answer 035;;"Only by performance" indicates this is a unilateral contract. Look for this phrase on the exam. O cannot revoke. In a unilateral contract once painter starts owner can't revoke. Actually painting is definitely "starting." |
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| Contract Question 36;;O offers P $5,000 to paint her house burnt orange. The offer states it can be accepted only by performance. P buys paint & goes to O's house, but has not started painting. Can O revoke? |
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Definition
| Contract Answer 036;;No. Mere preparation for performance is not enough to trigger the "unilateral contract part performance rule." Have to actually start performance (put a wet paint brush on the house, but part performance might start before then) BUT preparations can make the offer irrevocable when there is reasonable, foreseeable reliance. This was problem #29. A painter buying paint, something they do all the time, does not meet that criterion. |
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| Contract Question 37;;O offers P $5,000 to paint her house. P starts painting the house. Can O still revoke? |
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Definition
| Contract Answer 037;;No. This is a bilateral contract and for bilateral contracts the start of performance is a way to accept the offer. No sign that this unilateral contract but that does not matter on these facts. In a unilateral contract starting performance makes the offer irrevocable |
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Term
| Contract Question 38;;Smart Auto Sales, Inc., offers to sell Bart Simpson a 1971 Porsche. The offer is in writing, is signed by Smart, and provides that Smart will not revoke for 2 weeks. Can Smart still revoke? |
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Definition
| Contract Answer 038;;No. Elements of affirm offer under Art 2 are all satisfied: 1. sale of goods, 2. merchant and 3. a promise to keep open. Thus, consideration for that promise is not required |
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Term
| Contract Question 39;;Smart Auto Sales, Inc., offers to sell Bart Simpson a 1971 Porsche. The offer is in writing, is signed by Smart, and provides that Smart will not revoke for 6 months. Can Smart still revoke? |
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Definition
| Contract Answer 039;;There is a 3 month cap on firm offers. Six month term will be scaled back to 3 months. |
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Term
| Contract Question 40;;Smart Auto Sales, Inc., offers to sell Bart Simpson a 1971 Porsche. The offer is in writing, is signed by Smart. Can Smart still revoke? |
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Definition
| Contract Answer 040;;The offer is open for a reasonable time, not to exceed three months. A reasonable period is shorter for a volatile market (commodities). What specific period is reasonable is too subjective and will not be tested. |
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| Contract Question 41;;Smart Auto Sales, Inc. makes a signed, written offer to sell Bart Simpson a 1971 Porsche. Can Smart still revoke? |
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Definition
| Contract Answer 041;;Yes. There is no promise to keep the offer open. The promise to keep open has to be in writing. Read questions carefully. Not every signed written offer by a merchant is a firm offer. Has to say it is. |
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Term
| Contract Question 42;;S Realty Co. offers to sell Blackacre to Bart Simpson for $50,000. The offer is in writing, is signed by S, and provides that S will not revoke for 2 weeks. Can S revoke the offer? |
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Definition
| Contract Answer 042;;Yes, real estate is not governed by Art 2 and there is no evidence of reliance, part performance, or consideration paid to keep the offer open. BUT in NY a written promise not to revoke is enforceable - the writing takes the place of consideration. |
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| Contract Question 43;;Eva offers to sell Greenacres to Zsa Zsa for $50,000. Zsa Zsa responds, "Dahlink, I vill only pay $49,000." Eva refuses. Can Zsa Zsa later accept Eva's original offer? |
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Definition
| Contract Answer 043;;No. this is a counteroffer, which kills the offer. A counteroffer operates as a rejection, but bargaining does not. |
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| Contract Question 44;;Eva offers to sell Greenacres to Zsa Zsa for $50,000. Zsa Zsa responds, "Dahlink, vill you take $49,000?" Can Zsa Zsa later accept Eva's original offer to sell Greenacres for $50,000? |
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Definition
| Contract Answer 044;;Eva offers to sell Greenacres to Zsa Zsa for $50,000. Zsa Zsa responds, "Dahlink, vill you take $49,000?" Can Zsa Zsa later accept Eva's original offer to sell Greenacres for $50,000? A counteroffer operates as a rejection, but bargaining does not. |
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| Contract Question 45;;Disney sends Bill Clinton an offer to appear in the film, "Waiting to Inhale." Bill agrees on the condition that he get top billing. Is there an agreement? |
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Definition
| Contract Answer 045;;No. This is conditional and so is not an acceptance. Offeree cannot attach conducts and still accept. Using any of these terms ("on the condition that," "provided that," "so long as," "if") is just like saying "no." A conditional acceptance operates as a rejection & terminates an offer. |
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| Contract Question 46;;Landlord sends Tenant a signed lease. The lease is silent about pets. Tenant adds, "Tenant may keep a parrot," signs the lease & returns it to Landlord. Is there an agreement? |
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Definition
| Contract Answer 046;;No. Changed terms of the offer in terms of the agreement. No matter how trivial, a change in terms is a rejection, which terminates the offeree's power to accept. Common law: acceptance must mirror offer ("Mirror Image Rule"). An acceptance containing additional or different terms operates as a rejection under the common law, but not under Article 2. |
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| Contract Question 47;;B makes a written offer to buy 100 widgets from S for $1,000. The offer does not mention warranties. S's written acceptance disclaims all warranties. Is there an agreement? |
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Definition
| Contract Answer 047;;Yes. Sale of goods so Art 2 applies. Additional terms are not per se bad. Article 2: acceptance need not mirror offer (no "Mirror Image Rule"). Policy is to facilitate contract formation. An acceptance containing additional or different terms operates as a rejection under the common law, but not under Article 2. |
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Term
| Contract Question 48;;Under Article 2, when do the offeree's additional terms rarely get into the contract? |
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Definition
| Contract Answer 048;;The offeree's additional terms become part of the contract only if:;(1) Both parties are merchants;(2) The term is not a "material" change;and;(3) The offeror does not object within a reasonable time. |
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Term
| Contract Question 49;;B makes a written offer to buy 100 widgets from S for $1,000. The offer does not mention warranties. S's written acceptance disclaims all warranties. Does the agreement include S's disclaimer? |
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Definition
| Contract Answer 049;;No. Sale of goods so Art 2 applies. Additional terms are not per se bad.Even if both parties are merchants the disclaimer is a material change that is likely to cause hardship or surprise to the offeror. |
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Term
| Contract Question 50;;B makes a written offer to buy 100 widgets from S for $1,000. The offer does not mention warranties. S's written acceptance added "Saturday delivery". Does the agreement include Saturday delivery? |
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Definition
| Contract Answer 050;;Yes. Term would be included because it's not a material change.;;If B had responded that Saturday delivery was not convenient, the term would not be included since the offeror objected to it. |
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Term
| Contract Question 51;;On April 2, X makes an offer to Y. X dies on April 6. Can Y still accept X's offer? |
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Definition
| Contract Answer 051;;No. Offer terminated on April 6. Doesn't matter if Y knew;only thing that matters is X's death. |
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| Contract Question 52;;On April 2, X makes an offer to Y. Y pays X $100 for a 7-day option. X promises not to revoke the offer in exchange for the $100. X dies on April 6. Can Y still accept X's offer? |
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Definition
| Contract Answer 052;;Yes. Options are the exception to the rule that death of a party terminates an offer. Died within the 7 day period, consideration was paid for the option period and Y can accept during that period. |
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| Contract Q53;;On Monday, the Donald emails Kwame a job offer that states, "You can accept this offer only by reporting for work on Thursday." Kwame emails back this response, "I am pleased to accept your offer." Has Kwame accepted the Donald's offer? |
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Definition
| Contract Answer 053;;No, "only by" means this is a unilateral contract. Kwame has not accepted the offer because he is not in compliance with the terms of acceptance. While a promise to perform, starting to perform, or completing performance usually qualify as acceptance, the language of the contract WILL control. |
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Term
| Contract Question 54;;B faxes S an order for widgets stating, "You can accept this offer only by shipping within 24 hours." S faxes back: "Accept your offer. I will ship within 24 hours." Has S accepted B's offer? |
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Definition
| Contract Answer 054;;No. Promise to ship is not shipping. This is a unilateral contract so it can only be accepted by performance (shipping). BUT at some point the shipper's preparations may prevent the offeror from revoking the offer, if that is reasonable and foreseeable. |
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Term
| Contract Question 55;;B faxes S an order for widgets stating, "Widgets must be shipped within 24 hours." S faxes back: "Accept your offer. I will ship within 24 hours." Has S accepted B's offer? |
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Definition
| Contract Answer 055;;Yes. No language that says only performance constitutes acceptance. This is a bilateral contract so a promise to perform is enough. |
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Term
| Contract Question 56;;O offers P $5,000 to paint her house. P does not respond with words;instead, P starts painting O's house. Has P accepted O's offer so that P is now bound to paint O's house? |
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Definition
| Contract Answer 056;;Yes. Bilateral contract because type of acceptance not stipulated. A bilateral contract can be accepted in any reasonable way so starting performance is enough. |
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Term
| Contract Question 57;;O offers P $5,000 to paint her house. O's offer states P can accept only by performance. P starts painting O's house. Has P accepted O's offer so that P is now bound to paint O's house? |
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Definition
| Contract Answer 057;;No. Unilateral contract, so only completion is acceptance. P is free to take another jib because there is no contract. As the offeree he has not accepted. |
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Term
| Contract Question 58;;O offers P $5,000 to paint her house. O's offer states P can accept only by performance. P starts painting O's house. Can O still revoke her offer? |
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Definition
| Contract Answer 058;;No. Offeror is bound. Once offeree begins to perform the offeror cannot revoke. "Unilateral means only one party is bound - the offeror. |
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Term
| Contract Question 59;;O offers P $5,000 to paint her house white. P does not respond with words;instead, P paints the house maroon. Has P accepted O's offer, so that O can sue for breach of contract? |
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Definition
| Contract Answer 059;;There is an implied contract. O can sue because improper performance is acceptance and a breach of contract. |
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Term
| Contract Question 60;;B orders a Britney CD from S. S ships an Incubus CD instead. What result? |
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Definition
| Contract Answer 060;;Same for sale of goods. Common law and UCC agree that this is simultaneous acceptance of the offer and breach of contract. |
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Term
| Contract Question 61;;B orders a Britney CD from S. S ships an Incubus CD instead, but includes a note saying, "I'm out of Britney, but am sending Incubus in the hope it meets your needs." Has S accepted? |
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Definition
| Contract Answer 061;;No. This is the accommodation exception. If seller lets buyer know why he is sending the wrong goods it is NOT an acceptance by performance and thus cannot be breach. |
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Term
| Contract Question 62;;I leave a note on your outline at the break: "I offer to sell you my Honda for $5,000. If I don't hear from you by 9 p.m. tonight, you've accepted." You say nothing. Have you accepted? |
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Definition
| Contract Answer 062;;No. Offeror can't single-handedly turn offeror's silence into acceptance;too much chance the offeree will be bound against their will. |
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Term
| Contract Question 63;;What is the mailbox rule? |
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Definition
| Contract Answer 063;;Mailbox Rule: acceptance is effective when mailed [Policy: protects the offeree, who can rely on a contract being formed once he mails an acceptance, an equity concept in contract law]. All other communications (e.g. offers) are effective upon receipt. |
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Term
| Contract Q64;;VS sent Janet a letter offering her a job as a model. On Feb. 2, VS sent Janet a letter revoking. Janet mailed her acceptance Feb. 4. On Feb. 6, Janet received the revocation. On Feb. 8, VS received the acceptance. Is acceptance effective? |
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Definition
| Contract Answer 064;;Yes. Janet had no notice of revocation at time of acceptance. Acceptance effective on the 4th, when she mailed. Revocation would have been effective on the 6th but it's moot. |
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| Contract Q65;;VS sent a letter offering Janet a job as a model. On Feb. 2, VS sent her a letter revoking its offer. Janet mailed her acceptance Feb. 4. On Feb. 6, Janet got the VS revocation. VS never got Janet's acceptance letter. Is it effective? |
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Definition
| Contract Answer 065;;Yes. Janet had no notice of revocation at time of acceptance. Acceptance effective on the 4th, when she mailed. Revocation would have been effective on the 6th but it's moot. The harm from lost mail is borne by the offeror. |
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Term
| Contract Question 66;;Captain Kirk offers to sell the Enterprise to the Klingons for $5M. His offer provides, "Your acceptance must be received by January 9." On January 9, the Klingons mail their acceptance. Kirk receives it on January 11. Is Kirk bound? |
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Definition
| Contract Answer 066;;No. Klingons are not in compliance with the terms of acceptance. Offeror can override the mailbox rule. |
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Term
| Contract Q67;;Captain Kirk offers the Enterprise to the Klingons for $5M. They pay him $3,000 for his promise to hold the offer open until January 9. On January 9, the Klingons mail their acceptance, which Kirk receives on January 11. Is Kirk bound? |
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Definition
| Contract Answer 067;;No. The mailbox rule does not apply to irrevocable offers so they did not meet the terms of acceptance. Why no mailbox rule? The offeree doesn't need protection that the offeror will revoke;offeree knows when he can no longer rely on the offer. |
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Term
| Contract Q68;;Slash gets a letter from the Dixie Chicks inviting him to join the group. On May 14, he mails a letter accepting. On May 16, he mails a letter rejecting. Slash's rejection arrives on May 18. His acceptance arrives on May 20. Is it effective? |
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Definition
| Contract Answer 068;;Probably yes. Receiving rejection first is not enough for a rejection. Acceptance would be effective under the mailbox rule unless rejection gets there first AND the offeror relies on it. If they hire someone else because of the rejection, it's not fair they be burdened. |
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Term
| Contract Question 69;;Slash gets a letter from the Dixie Chicks inviting him to join the group. On May 14, he mails a letter rejecting, then mails a letter accepting it on May 16. Which is effective-the rejection or the acceptance? |
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Definition
| Contract Answer 069;;If rejection is sent first, mailbox rule does not apply. Offeree does not need to rely on the contract since offeree rejected it. Thus acceptance is only effective when it is received. Whichever the offeror gets first is effective. It's a race. |
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Term
| Contract Question 70;;Sean Penn makes an agreement to sell his Harley to 17-year-old Lindsay Lohan for $27,000. Sean breaches. Can Lindsay enforce the agreement against him? |
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Definition
| Contract Answer 070;;Yes. Plaintiff's capacity is irrelevant. Defendant had capacity so can't get out. |
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Term
| Contract Question 71;;Sean Penn makes an agreement to sell his Harley to 17-year-old Lindsay Lohan for $27,000. Lindsay breaches. Can Sean enforce the agreement against her? |
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Definition
| Contract Answer 071;;No. Defendant lacked capacity do the contract can't be enforced against her. |
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Term
| Contract Question 72;;Same facts as #64, except that Sean believes Lindsay is 18 because Lindsay told him she was 18. Can Sean enforce the agreement against her? |
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Definition
| Contract Answer 072;;No. Her statement is irrelevant. Only the fact of her age matters. |
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Term
| Contract Question 73;;Sean Penn makes an agreement to sell his Harley to 17-year-old Lindsay Lohan for $27,000. Lindsay retains the Harley without complaint after she turns 18. Lindsay breaches. Can Sean enforce the agreement against her? |
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Definition
| Contract Answer 073;;Sean can enforce. Impliedly reaffirmed. Look for 1. lack of capacity at the time of agreement and 2. defendant later gains capacity and 3. defendant retains benefit of contract without complaint. |
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Term
| Contract Question 74;;Landlord leases an apartment to tenant for $800 a month. Tenant is mentally incompetent. Is tenant legally obligated to pay for the use of Landlord's apartment? |
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Definition
| Contract Answer 074;;Yes, but only for reasonable value of apartment, not the contract price. An incapacitated party is liable for necessaries (food, shelter, clothing, or medical care), but only on a quasi-contract basis. Enter into a contract for those and the plaintiff can enforce. But the minor is NOT liable for contract price but for reasonable value of benefit conveyed. |
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Term
| Contract Question 75;;Princeton Review threatens to shoot my son unless I lecture for them. I agree. Is our agreement legally enforceable? |
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Definition
| Contract Answer 075;;No. Physical duress. This is too easy to be on the bar. |
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Term
| Contract Q76;;S & B contract for S to deliver 100 Elmo dolls to B for $1K. S later won't deliver unless B agrees to buy 100 Kermits for $2K. S is the only source for Elmos, which B needs now. B agrees. S delivers the Elmos. Is the Kermit deal enforceable? |
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Definition
| Contract Answer 076;;No. Economic duress causes a flaw in the agreement process. |
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Term
| Contract Question 77;;What constitutes economic duress? |
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Definition
| Contract Answer 077;;(1) threat to breach an existing contract unless a party gets a better deal,;(2) other party only agrees because he desperately needs the 1st deal done, and;(3) no alternative source of supply |
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Term
| Contract Q78;;S sells umbrellas for $3. When it rains, S increases the price to $10. During a storm, B agrees to buy an umbrella from S for $10. B pays S $10 & receives an umbrella. After the storm, can B get any money back from S on the ground of duress? |
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Definition
| Contract Answer 078;;No. That's not economic duress. Need the elements from question 70. |
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Term
| Contract Q79;;S tells B that his house has never had any roaches. That statement induces B to agree to buy S's house. Although S honestly & innocently believes that the house has never had any roaches, it does. Is the agreement legally enforceable? |
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Definition
| Contract Answer 079;;No, because of the material misrepresentation that induced the agreement. Misrepresentation does NOT have to be wrongful, fraudulent or negligent. Even honest and innocent misrepresentation is a fatal flaw. |
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Term
| Contract Question 80;;What is a Mutual Mistake of Material Existing Fact? |
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Definition
| Contract Answer 080;;It means a mistake about what something is or that it exists, not what something is worth. |
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Term
| Contract Q81;;B and S agree on the sale of a drawing for $75K. Both B and S believe the drawing is a Warhol. After the agreement, but before performance, they learn that the drawing is not a Warhol. Is their agreement enforceable? |
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Definition
| Contract Answer 081;;No. This is a fatal flaw in the process. There is a mutual mistake in material fact: the identity of the artist. |
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Term
| Contract Q82;;B and S agree on the sale of a Warhol drawing for $75K. After the agreement, but before performance, they learn that the drawing is worth only $1,000, not $75,000, as both believed? Is their agreement enforceable? |
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Definition
| Contract Answer 082;;Contract is enforceable. A mistake as to market value is not material. Buyer should have had it appraised. |
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Term
| Contract Q83;;B & S agree on the sale of a Warhol drawing for $75K. B believes the drawing is a Warhol. S does not, and does not know that B believes it is. After the agreement, but before performance, B learns the drawing is not a Warhol. Enforceable? |
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Definition
| Contract Answer 083;;Yes. Mere fact that one party is mistaken is not a fatal flaw in the agreement process as long as the other party was not aware of the mistake. |
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Term
| Contract Question 84;;What is the New York distinction on Lack of Consideration? |
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Definition
| Contract Answer 084;;In NY the existence of a written agreement eliminates the need for consideration. |
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Term
| Contract Question 85;;The agreement between B and S provides for the sale of bar exam "flash cards" by S & payment of $100 by B. B now refuses to pay S the $100. Was there consideration for B's promise to buy the flash cards? |
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Definition
| Contract Answer 085;;Yes. The seller's promise to sell was consideration for the buyer's promises to pay. A promise is consideration for a promise. |
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Term
| Contract Question 86;;I promise to pay you $100 if you stop listening to recordings by Nine Inch Nails. You do what I asked. Is there consideration for my promise to pay you the $100? |
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Definition
| Contract Answer 086;;Yes. Forbearance is consideration for the promise. Bargain + my detriment. |
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Term
| Contract Question 87;;In August, Simon helps Paula unload a U-Haul. In September, Paula promises to pay Simon $300 for his help unloading the U-Haul. Paula now refuses to pay him. Was there consideration for Paula's promise to pay Simon? |
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Definition
| Contract Answer 087;;No. Simon's acts are in the past and they can't bargain for/about something already done. |
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Term
| Contract Question 88;;What is consideration? |
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Definition
| Contract Answer 088;;Consideration is a bargained-for legal detriment. A promise, a perfomance, or forbearance |
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Term
| Contract Question 89;;Same facts as in #79, except that Paula's promise to pay Simon for his help was in writing? |
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Definition
| Contract Answer 089;;On the multi-state portion, this still isn't enforceable, but in NY it is because it's in writing. |
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Term
| Contract Question 90;;We agree that I will pay you $500 for your John Denver "Greatest Hits" CD. The CD is only worth $10. Is there consideration for my promise to pay you $500? |
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Definition
| Contract Answer 090;;Yes. Stupid bargains are still enforceable. |
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Term
| Contract Question 91;;What is the "Pre-existing duty rule" |
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Definition
| Contract Answer 091;;The "Pre-existing duty rule" applies to contract modifications - need consideration to modify a contract. |
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Term
| Contract Q92;;Ashlee contracts to sing at Owner's venue for $25K. Upon her arrival, Ashlee asks for $30K for the same show. Owner agrees to pay her $30K. Ashlee performs. Owner refuses to pay the extra $5K. Is there consideration for the extra $5K? |
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Definition
| Contract Answer 092;;No. Ashlee did nothing new, she only did what she was obliged to do under the existing contract. She has no additional detriment and owner has no added benefit.;;If the Owner's promise to pay the extra $5K is in writing, In NY the owner is bound, the need for consideration was eliminated by the writing. But on MBE the extra $5000 in not enforceable. |
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Term
| Contract Q93;;Ashlee contracts to sing at Owner's for $25K. Upon arrival, Ashlee asks for $30K for the same show. She'll sign autographs for an hour after the show. Owner agrees to pay. Ashlee performs. Owner refuses to pay the extra $5K. Consideration? |
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Definition
| Contract Answer 093;;Bargain plus benefit and detriment for each equals consideration. The additional work for additional pay makes this promise enforceable. |
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Term
| Contract Question 94;;Ashlee contracts to sing at Owner's for $25K. Upon arrival, Ashlee asks for $30K for the same show. A local record store promises to pay the extra $5K. Ashlee performs. Is there consideration for the extra $5K? |
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Definition
| Contract Answer 094;;Ashlee is not doing anything new, but the pre-existing duty rule does not apply if the promises is from a third party. It only applies to the original parties to the contract. |
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Term
| Contract Question 95;;S contracts to sell 100 widgets to B for $700. Later, S and B orally agree to increase the price to $900. Is B's promise to pay the extra $200 enforceable? |
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Definition
| Contract Answer 095;;Sale of goods, so Art applies. It's enforceable as long as there is good faith. There is no pre-existing duty rule under Art 2. Don't need consideration, but you do need good faith. The exam will use the words "good faith" in the problem if this is tested. |
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Term
| Contract Q96;;You owe Visa $2.5K. The debt is due & undisputed. You & Visa orally agree that if you pay $2K now, Visa will forgive the other $500. You pay Visa $2K, but Visa sues you for the other $500! Was the $2K consideration for Visa's promise? |
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Definition
| Contract Answer 096;;No. Partial payment of a due and undisputed debt is not consideration for a promise to forgive the balance of the debt. There was no benefit to them or detriment to you from this promise. This could be tested on the MBE. |
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Term
| Contract Q97;;You owe Visa $2.5K. The debt is due & undisputed. You & Visa agree in writing that if you pay $2K now, Visa will forgive the other $500. You pay Visa $2K. Visa sues you for the other $500! Was the $2K consideration for Visa's promise? |
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Definition
| Contract Answer 097;;For the MBE this does not provide consideration, but in NY writings replace consideration so Visa could NOT sue. |
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Term
| Contract Q98;;You owe Visa $2.5K. The debt is in dispute. You & Visa orally agree that if you pay $2K now, Visa will forgive the other $500. You pay Visa $2K, but Visa sues you for the other $500! Was the $2K consideration for Visa's promise? |
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Definition
| Contract Answer 098;;Then the release is enforceable. The consideration is the settlement of the disputed debt, which is a benefit to Visa. Law favors the settlement of claims |
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Term
| Contract Question 99;;You owe Visa $2,500. Legal action to collect the debt is barred by the statute of limitations. Nonetheless, you write Visa: "I know I owe you $2,500. I will pay you $2,000." Is your promise to pay Visa $2,000 legally-enforceable? |
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Definition
| Contract Answer 099;;Yes, but not due to consideration, it's because of the writing. In this case, and in this case only, under the MBE the writing is a substitute for consideration on the MBE. It is also a substitute in NY, like it normally would be. |
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Term
| Contract Q100;;T leases a loft from L under a lease that expires next month. L promises T to renew the lease at the same rent for a year. In reliance, T repaints. L refuses to renew the lease. Was T's work consideration for L's promise to renew? |
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Definition
| Contract Answer 100;;No. The landlord wasn't bargaining. He didn't say "if you paint the house I will rent to you." Tenant has a detriment but there was no bargain.;;Can Tenant enforce Landlord's promise to renew on any other ground? Yes, on the grounds of promissory estoppel. The tenant did rely on the landlord's offer. Not sure it was foreseeable reliance but that does not matter because the bar will not test on that issue. The only question for the exam is whether it possibly COULD BE promissory estoppel, not whether it IS promissory estoppel. |
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Term
| Contract Question 101;;Tony Soprano hires Uma Thurman to kill a rival mobster for $20,000. If Uma does not kill the rival, can Tony sue for Uma breach of contract? |
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Definition
| Contract Answer 101;;No. Subject matter of the contract illegal. |
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Term
| Contract Q102;;Tony hires Uma to kill a rival for $20K. Uma agrees to buy a non-refundable ticket on American Air from LA, where Uma lives, to Newark, where the rival lives. If Uma does not pay for the ticket, can American recover from Uma for breach? |
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Definition
| Contract Answer 102;;Yes, as long as the airline doesn't know her purpose. Subject matter is a ticket, not the killing. She bought the ticket for an illegal purpose but that is not the issue, as long as the airline doesn't know that. |
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Term
| Contract Question 103;;Tony sells the Bada Bing to Guido. The agreement provides that Tony will not open another bar within 5 miles of the Bada Bing for one year. Is this covenant legally enforceable? |
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Definition
| Contract Answer 103;;Not sure. It depends on whether the time and geographic limits are reasonable so we can balance the freedom of contract against the restraint of trade. |
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Term
| Contract Question 104;;Tavern on the Green requires all its employees to sign a contract that prohibits an employee from working for another restaurant in N.Y.C. for 90 days. Is this covenant legally enforceable? |
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Definition
| Contract Answer 104;;Employment contracts can have a non-competition clause, rarely seen in other contexts. Look for reasonable time and geographic limits PLUS a reasonable business need for the protection. Clause may be enforceable against a chef, but will not be against a busboy. |
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Term
| Contract Question 105;;Builder contracts to remodel Owner's home. The contract provides that Builder will not be liable for damages caused by negligence of its employees. Is this clause enforceable? |
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Definition
| Contract Answer 105;;Depends on the facts. Can contract away liability for negligence in appropriate circumstances but cannot contract away liability for intentional torts or gross negligence. |
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Term
| Contract Question 106;;What are the two kinds of unconscionability? |
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Definition
| Contract Answer 106;;Substantive unconscionability (terms themselves are unfair) or procedural unconscionability (something in the fine print makes terms ok but procedures unfair because it is not seen or not understood).;;Unconscionablity is not usually on the test and if it is it is not the right answer. |
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Term
| Contract Question 107;;Tenant alleges that Landlord orally agreed to lease an apartment to her for one year. Is their agreement within the Statute of Frauds? |
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Definition
| Contract Answer 107;;No, it's not more than one year. |
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Term
| Contract Question 108;;Bill Gates alleges that Gilligan orally agreed to sell Gilligan's island to him. Is their agreement within the Statute of Frauds? |
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Definition
| Contract Answer 108;;Yes. Doesn't say more than one year but permanent transfer is the essence of a sale, so it falls within the statute. |
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Term
| Contract Question 109;;"W" alleges that J.R. orally agreed to sell him a two-year easement on Southfork. Is their agreement within the Statute of Frauds? |
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Definition
| Contract Answer 109;;Yes. Transfer of interest in real estate for more than one year. An easement is an interest in land. Agreements for sales, leases and easements all fall within the statue if the time period is greater than one year. |
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Term
| Contract Question 110;;"W" alleges that Builder orally agreed to build a fence around his ranch in Crawford, Texas. Is their agreement within the Statute of Frauds? |
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Definition
| Contract Answer 110;;No, this is a contract to build a fence. It is not a transfer of interest in real estate. |
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Term
| Contract Question 111;;Woody Woodpecker alleges that on February 8, 2004, "W" orally agreed to have Woody cut down all the trees on his ranch. Is this agreement within the Statute of Frauds? |
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Definition
| Contract Answer 111;;No. Specific task never falls under the SoF;any task is capable of being performed in one year. With enough help Woody can perform in one year so no writing is required. |
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Term
| Contract Question 112;;Woody Woodpecker alleges that on February 8, 2004, "W" orally agreed to have Woody cut down all the trees on his ranch. What if Woody doesn't actually finish the job until August 23, 2005? |
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Definition
| Contract Answer 112;;Doesn't matter what actually happens. Theoretically he could have done it and that is all that matters. Specific task never falls under the SoF;any task is capable of being performed in one year. With enough help Woody can perform in one year so no writing is required. |
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Term
| Contract Question 113;;Big Bird alleges that Sesame Street orally agreed to employ him for the rest of his life. Is this agreement within the Statute of Frauds? |
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Definition
| Contract Answer 113;;No, for the MBE. A lifetime contract doesn't have to be in writing because the employee could die within one year. But in NY, it IS within the SoF because he might live more than one year. |
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Term
| Contract Question 114;;Big Bird alleges that Sesame Street orally agreed to employ him for 3 years. Is this agreement within the Statute of Frauds? |
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Definition
| Contract Answer 114;;Yes. Specific time period in excess of 1 year is always within the SoF. |
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Term
| Contract Question 115;;Big Bird alleges that Sesame Street orally agreed to employ him for 1 year, starting next Monday. Is this agreement within the Statute of Frauds? |
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Definition
| Contract Answer 115;;Yes. Clock starts when agreement was made, not when performance is supposed to begin. |
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Term
| Contract Question 116;;Enya alleges that on May 1, 2004, Club Putz orally agreed to have her perform at its New Year's Eve Gala on December 31, 2005. Is the agreement within the Statute of Frauds? |
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Definition
| Contract Answer 116;;Yes. Duration of performance is irrelevant. Clock starts on May 1, 2004. Performance in more than 1 year in the future so a writing is required. |
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Term
| Contract Question 117;;Sear's alleges that Hilary orally agreed to buy a whitewater raft for $500. Is this agreement within Article 2's Statute of Frauds? |
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Definition
| Contract Answer 117;;Yes. Sale of goods and meets $500 minimum. Art 2 applies to all goods but SoF portion of Art 2 has a dollar threshold. |
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Term
| Contract Question 118;;Sear's alleges that Senator Hilary Clinton orally agreed to buy a whitewater raft for $400. Is this agreement within Article 2's Statute of Frauds? |
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Definition
| Contract Answer 118;;No. Not worth enough money to fit into the statute of frauds. |
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Term
| Contract Question 119;;Dell Leasing NY Co. alleges that Roger orally agreed to lease a computer for one year for $300 a month. Is such an agreement within the Statute of Frauds? |
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Definition
| Contract Answer 119;;Yes, $3600 total for the lease. Test will use monthly rates so read carefully. Lease of goods where lease payments total $1,000 or more. Governed by Art 2A, so only in NY. |
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Term
| Contract Question 120;;Debtor owes Creditor $1,000. Creditor alleges that Guarantor orally agreed to pay the $1,000. Is this agreement to pay within the Statute of Frauds? |
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Definition
| Contract Answer 120;;No. SoF doesn't care about one parties promise to pay others debt. That's not what "answer for" means. Promise to "answer for" the debt of another (limited to guarantees). |
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Term
| Contract Question 121;;Debtor owes Creditor $1,000. Creditor alleges that Guarantor orally agreed to pay the $1,000 if Debtor did not pay. Is this agreement to pay if Debtor doesn't pay within the Statute of Frauds? |
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Definition
| Contract Answer 121;;"If Debtor did not pay" means "answer for." Look for this language. Secondary liability means liable only if debtor does not pay. |
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Term
| Contract Q122;;Debtor owes Creditor $1K. Creditor alleges Guarantor orally agreed to pay the $1K if Debtor did not pay. Debtor's debt to Creditor is for paint that Debtor bought to use in painting Guarantor's house. Is this within the Statute of Frauds? |
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Definition
| Contract Answer 122;;No. This is the "main purpose exception." If the purpose of the guarantee is to benefit the guarantor then not in SoF. Lot less chance of fraud if guarantor made promise to benefit himself. |
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Term
| Contract Question 123;;Demi Moore alleges that Ashton Kutcher orally agreed to renounce all claims to her assets if she would marry him. Is such an agreement within the Statute of Frauds? |
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Definition
| Contract Answer 123;;Yes. A pre-nuptial agreement falls within the SoF. So does a post-nup. |
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Term
| Contract Question 124;;Demi alleges that Ashton orally agreed to marry her. Is this agreement within the Statute of Frauds? |
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Definition
| Contract Answer 124;;No. Mere promise to marry is not within the SoF because that promise is not in consideration of marriage. |
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Term
| Contract Question 125;;Promise by an estate representative to use her own funds to pay estate expenses. Is this within the Statute of Frauds? |
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Definition
| Contract Answer 125;;Yes. |
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Term
| Contract Question 126;;What are the Miscellaneous provisions of the New York Statute of Frauds |
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Definition
| Contract Answer 126;;(1) assignment of insurance policy;(2) promise to name beneficiary of insurance policy;(3) agreement to pay commission or finder's fee |
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Term
| Contract Question 127;;Tenant has a contract to rent an apartment from Landlord for 1 year. Tenant alleges that Landlord later agreed to extend the lease to 36 months. Is the modification agreement within the Statute of Frauds? |
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Definition
| Contract Answer 127;;Yes. The original lease is too short to be in the SoF, but the extension makes it long enough to qualify. |
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Term
| Contract Question 128;;Tenant has a contract to rent an apartment from Landlord for 36 months. Tenant alleges that Landlord later agreed to reduce the term to 9 months. Is the modification agreement within the Statute of Frauds? |
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Definition
| Contract Answer 128;;No. The original lease needed to be in writing but the modification results in a period of less than 1 year. Thus, the agreement falls outside the SoF and does not have to be in writing. |
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Term
| Contract Question 129;;Nick agreed to buy 60 jugs of wine from Elite Liquors for $600. Nick alleges Elite later agreed to reduce the price to $450. Is the modification agreement within the Statute of Frauds? |
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Definition
| Contract Answer 129;;Original agreement was, but the modification makes the overall contract worth less the $500. No SoF. |
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Term
| Contract Question 130;;Big Bird has a written contract to work for Sesame Street for 9 months for $5,000 a month. The contract provides that all modifications must be in writing. Is an oral modification effective? |
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Definition
| Contract Answer 130;;Yes. Under the common law a clause that requires written modifications is not enforceable. It is enforceable under Article 2, but since this is not a sale of goods question that does not apply here. |
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Term
| Contract Q131;;Elvira sues Chucky for $500 alleging that Chucky agreed to buy 70 dolls for $500. Chucky asserts a SoF defense. There is a writing: "I agree to buy 70 dolls from Elvira," signed by Chucky. Does the writing satisfy SoF against Chucky? |
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Definition
| Contract Answer 131;;Yes. Minimum dollar value for Art 2 SoF and Chucky's signature. |
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Term
| Contract Q132;;Elvira sues Chucky for $500 alleging that Chucky agreed to buy 70 dolls for $500. Chucky asserts a SoF defense. There is a writing: "I agree to sell 70 dolls to Chucky," signed by Elvira. Does the writing satisfy the SoF against Chucky? |
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Definition
| Contract Answer 132;;No. But Chucky could use it against her if he wanted. Minimum dollar value for Art 2 SoF and Chucky's signature. |
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Term
| Contract Q133;;B, a merchant, faxes S, a merchant: "This confirms our agreement that you will deliver us 50 snowglobes for $500. /s/ B." S gets it, but does not respond. B sues S for breach. S asserts a SoF defense. Does B's fax satisfy the SoF against S? |
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Definition
| Contract Answer 133;;Yes. This only applies to Art 2. This is the one time the defendant didn't have to sign. Three requirements:;(1) both parties are merchants;(2) the writing must confirm a prior agreement and have a quantity term;(3) there must be no response. Merchants often use the phone and then follow-up. |
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Term
| Contract Question 134;;What is the lease of goods requirement under article 2A in New York? |
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Definition
| Contract Answer 134;;For the lease of goods, a writing must state:;(1) that it's a lease, 2. the number of items being leased,;(3) the length of the lease, and;(4) the rental payments.;;The defendant's signature is also still required, so the SoF of Art 2A requires a lot more than Art 2. |
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Term
| Contract Question 135;;Eve signs the following: "I agree to lease one apple-picking machine from Jake Plummer." Eve breaches. Jake sues Eve for breach of contract. Eve asserts a Statute of Frauds defense. Does the writing satisfy the SoF against Eve? |
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Definition
| Contract Answer 135;;No. Length of the lease and the payment terms are not included as required by Art 2A SoF. Had this been a sale it would have met the requirements. For the lease of goods, a writing must state:;(1) that it's a lease, 2. the number of items being leased,;(3) the length of the lease, and;(4) the rental payments.;;The defendant's signature is also still required, so the SoF of Art 2A requires a lot more than Art 2. |
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Term
| Contract Q136;;Eve signs the following: "I agree to lease one apple-picking machine from Jake Plummer for 2 years for $100 a month." Eve breaches. Jake sues. Eve asserts a Statute of Frauds defense. Does the writing satisfy the SoF against Eve? |
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Definition
| Contract Answer 136;;Yes. All necessary information is included. For the lease of goods, a writing must state:;(1) that it's a lease, 2. the number of items being leased,;(3) the length of the lease, and;(4) the rental payments.;;The defendant's signature is also still required, so the SoF of Art 2A requires a lot more than Art 2. |
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Term
| Contract Question 137;;Divine Brown mails Hugh Grant the following signed writing: "I accept your offer." Does the writing satisfy the Statute of Frauds? |
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Definition
| Contract Answer 137;;No. None of the material terms are included. |
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Term
| Contract Q138;;Crain Law Firm signs the following letter: "We agree to employ Jimmy for 3 years at a salary of $600K a year." A month later, the firm terminates Jimmy without cause. Jimmy sues. Does the writing satisfy the SoF against the firm? |
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Definition
| Contract Answer 138;;Yes. All the material terms are included. "Who" is Jimmy, "What" is salary for $6000 for three years and it's signed by the defendant. |
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Term
| Contract Q139;;Crain Law Firm signs the following letter: "We agree to employ Jimmy for 3 years at a salary of $600K a year." Jimmy quits after one month. The firm sues Jimmy. Jimmy asserts a SoF defense. Does the writing satisfy the SoF against Jimmy? |
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Definition
| Contract Answer 139;;No. Jimmy didn't sign. Just the material terms are not enough. Jimmy can use as a sword, but the firm can't use the shield. |
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Term
| Contract Q140;;Sesame Street orally agrees to employ Big Bird for 2 years for $50K, payable at the end of term. Bird works for 2 years. Sesame refuses to pay. Bird sues. Sesame asserts a SoF defense. Does Big Bird's working for 2 years satisfy the SoF? |
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Definition
| Contract Answer 140;;Yes. Contract should have been under SoF but Big Bird escapes that requirement. Little chance of fraud when he worked for 2 years and they let him. He is still going to have to prove the pay rate but that is another issue. Full performance of service contracts requires no writing under the SOF. |
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Term
| Contract Q141;;Sesame Street orally agrees to employ Big Bird for 2 years for $50K, payable at the end of term. Bird works for 2 months. Sesame refuses to pay. Bird sues. Sesame asserts a SoF defense. Does Big Bird's working for 2 months satisfy the SoF? |
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Definition
| Contract Answer 141;;No. Part performance of a service contract will not satisfy the SoF. Big Bird can't recover because no writing, but also because he didn't perform. However, Big Bird can argue under quasi-contract for payment for the reasonable value of service rendered. |
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Term
| Contract Q142;;Bill alleges that Gill orally agreed to sell G Island to him for $400K. Bill has paid Gill $50K, and made improvements to the island. When Bill sues, Gill raises a SoF defense. Does Bill's partial payment plus improvements satisfy the SoF? |
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Definition
| Contract Answer 142;;Yes. Part performance in real estate requires any two of these three things:;(1) partial payment, or;(2) buyer's improvement of real estate, or;(3) buyer's possession of the real estate |
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Term
| Contract Question 143;;Bill alleges that Gill orally agreed to sell Gill's Island to him for $400K. Bill has paid Gill the entire $400K. When Bill sues for breach of contract, Gill raises a SoF defense. Does Bill's full payment satisfy the SoF? |
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Definition
| Contract Answer 143;;No. Payment, even full payment, alone is not enough. Bill needs a writing or one of the other elements. Part performance in real estate requires any two of these three things:;(1) partial payment, or;(2) buyer's improvement of real estate, or;(3) buyer's possession of the real estate |
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Term
| Contract Question 144;;Seller alleges that A-Rod orally agreed to buy 50 bats for $100 each. Seller delivers 20 bats to A-Rod. A-Rod keeps the bats & does not pay. Seller sues for $2K. Does Seller's delivery satisfy the Statute of Frauds exception? |
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Definition
| Contract Answer 144;;Yes. A-Rod losses the SoF defense for the 20 bats already delivered. If the seller was lying about the price, presumably A-Rod would not have accepted the bats, let alone kept them. |
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Term
| Contract Q145;;A-Rod alleges that Seller orally agreed to deliver 50 bats for $100 each. Seller delivers 20. A-Rod pays $2K, but Seller does not deliver any more. A-Rod sues. Seller asserts a SoF defense. Does Seller's delivery satisfy the SoF exception? |
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Definition
| Contract Answer 145;;No. Seller has the SoF as a defense. The suit is about the undelivered bats, not the 20 A-Rod has and paid for. |
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Term
| Contract Q146;;A-Rod alleges Seller orally agreed to deliver 50 bats for $100 each. Seller delivers 20 bats. A-Rod pays $5K, but Seller does not deliver any more. A-Rod sues. Seller asserts a SoF defense. Does Seller's delivery satisfy the SoF exception? |
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Definition
| Contract Answer 146;;The SoF exception is satisfied. There is little chance of fraud if the seller kept the money. |
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Term
| Contract Question 147;;Samantha claims she is authorized to sign a lease for Mr. Big in which Mr. Big is leasing an apartment from Landlord for 2 years. Does Samantha need written authorization? |
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Definition
| Contract Answer 147;;Yes. If the underlying agreement is in the SoF then need written evidence of the agent's authority. |
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Term
| Contract Question 148;;Samantha claims she is authorized to sign a lease for Mr. Big in which Mr. Big is leasing an apartment from Landlord for 1 year. Does Samantha need written authorization? |
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Definition
| Contract Answer 148;;No. Lease is not in SoF, so agent's authority does not need to be in writing. |
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Term
| Contract Question 149;;In NY, Oz testifies that there was a contract with Lemerson. Later, Lemerson tries to enforce the contract. Oz tells her to buzz off, because the contract was dead due to the Statute of Frauds. Must Lemerson buzz off? |
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Definition
| Contract Answer 149;;No. Where there is a judicial admission in a pleading, in testimony or in response to discovery, the Statute of Frauds will not kill a contract. |
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Term
| Contract Q150;;Liz signs a contract to lease the Grand Ballroom at the Plaza. Liz thought she could select any room, supported by a fax from the Plaza sent before the written contract. Liz sues for reformation. Can the court consider the fax? |
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Definition
| Contract Answer 150;;No. Fax is earlier in time. Parol Evidence Rule prevents evidence of prior agreement tat conflicts with the latter writing (the contract). Court has no idea why the term wasn't included and they are not going to guess. |
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Term
| Contract Question 151;;What are the exceptions to the parol evidence rule? |
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Definition
| Contract Answer 151;;(1) To correct a clerical error (e.g., a typo, transposing numbers, etc.),;(2) To establish a defense to the enforceability of an agreement, by arguing faulty formation,;(3) To explain the written contract,;(4) To supplement (not "contradict") a "partially-integrated" writing. Must concern complementary terms. [This description of "partially integrated" might be used on the exam: "a final statement of the terms included, but not a complete statement of all terms agreed to"]. |
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Term
| Contract Question 152;;Liz signs a contract to lease the "soundproof" Grand Ballroom at the Plaza. Liz seeks rescission on the ground that the contract is unenforceable because of the manager's misrepresentation. Can the court consider Liz's testimony? |
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Definition
| Contract Answer 152;;Yes. Liz isn't trying to change the terms of the deal. She wants out because of a flaw in the agreement process. |
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Term
| Contract Question 153;;Liz signs a contract to lease a ballroom at the Plaza. Liz claims the deal was for the Grand Ballroom. Liz has a fax from the Plaza sent before the written contract supporting her claim. Liz sues. Can the court consider the fax? |
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Definition
| Contract Answer 153;;Yes. Can always get in parol evidence to explain what a term means. |
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Term
| Contract Q154;;The written lease says nothing about sleeping accommodations. Liz claims that just before signing the lease, the manager promised Liz that the Plaza would "throw in the bridal suite for free." Can Liz get this promise into evidence? |
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Definition
| Contract Answer 154;;Yes, can supplement agreement because it does not appear (actually Liz is alleging that it is not) complete on its face. Evidence to supplement (not "contradict") a "partially-integrated" writing will not violate the Parol Evidence rule. Must concern complementary terms. [This description of "partially integrated" might be used on the exam: "a final statement of the terms included, but not a complete statement of all terms agreed to"]. |
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Term
| Contract Q155;;Liz claims that just before signing the ballroom lease, Manager promised to "throw in the bridal suite for free." The lease also said: "This contract is limited to the terms set forth herein." Can Liz get the promise into evidence? |
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Definition
| Contract Answer 155;;No. This is a merger clause. A merger clause is proof that the writing is complete on its face and therefore can't be supplemented at all. |
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Term
| Contract Q156;;The written lease says nothing about sleeping accommodations. Liz claims that after signing the contract, Manager also promised Liz that the Plaza would "throw in the bridal suite for free." Can Liz get this promise into evidence? |
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Definition
| Contract Answer 156;;Yes. Parol evidence rule looks backward from the written contract, nothing to do with what happens afterwards. Use modification rules (e.g. consideration, potential for SoF) not parol evidence. |
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Term
| Contract Question 157;;What is the parol evidence rule? |
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Definition
| Contract Answer 157;;The Parol Evidence Rule keeps out evidence of what the parties said & wrote before (not after) they reduced the terms of their agreement to writing. |
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Term
| Contract Question 158;;How can the conduct modify the application of the Parol Evidence rule? |
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Definition
| Contract Answer 158;;Conduct of the Parties can fill gaps in the contract or explain terms. In descending order of importance to the court:;(1) Course of performance: what the parties have done under this contract. This is good evidence of what the parties meant;(2) Course of dealing: what the parties have done under their earlier contracts. This is good evidence of what they expected.;(3) Usage of trade: what others in the trade do under similar contracts. Some evidence of what the parties expected. |
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Term
| Contract Question 159;;S contracts to sell B 90 chickens each week in 2005. In a dispute over whether "chickens" includes "stewing chickens," what extrinsic evidence may the court consider, and in what order? |
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Definition
| Contract Answer 159;;Most important is "did the buyer take stew chickens earlier under this contract" next is "did the buyer take stew chickens from the seller under a previous contract similar to the one in dispute" and least important is "is it the general practice that stew chickens count in the minds of the industry participants." |
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Term
| Contract Question 160;;Which of the following is an express warranty:;(1) "This desk is solid mahogany"?;(2) "This computer is guaranteed for 2 years"?;(3) "All parts are top quality"?(4) The seller's use of a sample or model. |
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Definition
| Contract Answer 160;;(1) "This desk is solid mahogany" is an express warranty, a statement of fact.;(2) "This computer is guaranteed for 2 years" is an express warranty, a promise.;(3) "All parts are top quality" is not an express warranty, this is the seller's opinion. It is "puffing." Generally, vague or subjective statements are not express warranties.;(4) The seller's use of a sample or model gives rise to an express warranty. It's reasonable to assume the final product is exactly like the model. This is NOT an implied warranty. Don't pick implied warranty for this on the exam. |
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Term
| Contract Question 161;;What are the implied warranties under Article 2? |
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Definition
| Contract Answer 161;;There are 2 implied warranties under Article 2:;Implied warranty of merchantability: goods are fit for their ordinary purpose. Seller must be a merchant who deals in goods of the kind.;(2) Implied warranty of fitness for a particular purpose: the goods are fit for the buyer's special purpose, the buyer is relying on the seller, and the seller knows it. Seller does NOT have to be a merchant. |
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Term
| Contract Question 162;;Marion Jones buys running shoes from Winged Foot Shoe Co. The contract is silent as to the quality of the shoes. Is there an implied warranty of merchantability? |
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Definition
| Contract Answer 162;;Yes. A shoe company selling running shoes is the right match of merchant and goods. They sell these all the time so are warranting that they are good for the ORDINARY purpose. |
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Term
| Contract Question 163;;Winged Foot Shoe Co. sells one of its delivery vans to Bob. Is there an implied warranty of merchantability? |
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Definition
| Contract Answer 163;;No. They are not a car company. They have no specialized knowledge about vans. |
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Term
| Contract Q164;;Jethro tells Clerk, "I am meeting with a Wall Street firm & don't know what's appropriate." Clerk sells him white loafers. The lawyers see Buck's shoes & end the interview. Breach of the implied warranty of merchantability? Fitness? |
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Definition
| Contract Answer 164;;No, there is no breach of the implied warranty of merchantability. Shoes are fit for their ordinary purpose (walking).;;Yes, there is a breach of the implied warranty of fitness for a particular purpose. These shoes are no good for interviews. That is the special purpose. Buck relied on the clerk and the clerk knew that. |
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Term
| Contract Question 165;;In Brooklyn, Roy leases a computer from Gigabyte Computer Co. Is there an implied warranty of merchantability? |
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Definition
| Contract Answer 165;;Yes. There are implied warranties for sales and for leases. Seller's Warranties of Quality in a Lease of Goods under Article 2A (NY only) |
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Term
| Contract Question 166;;Roy leases a computer from Citibank NY, which bought the computer from Gigabyte Computer Co. Is there an implied warranty of merchantability? |
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Definition
| Contract Answer 166;;This is a finance lease. There is no implied warranty of merchantability made by the bank but there is one for the computer company. Bank lacks expertise about computers and the NY legislature isn't going to force them to either learn about items or stop leasing those items. |
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Term
| Contract Question 167;;A contract for the sale (or lease) of a computer provides that "all parts are guaranteed for 2 years." What if that same contract also provides that "all warranties are disclaimed"? |
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Definition
| Contract Answer 167;;This is an attempt to disclaim an express warranty. That is a non sequitur;express warranties can never be disclaimed. Here all warranties are good. |
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Term
| Contract Question 168;A contract for the sale (or lease) of a computer from Gigabyte Computer Co. provides for the sale (or lease) of the computer "as is." There is no other statement in the contract about the quality. Implied warranties? |
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Definition
| Contract Answer 168;;No, "as is" is the key phrase. Use the specific wording "as is" or "with all faults" and the seller or leaser can escape implied warranties. |
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Term
| Contract Q169;;A contract for the sale of a computer from Gigabyte Computer Co. provides that there are "NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS." There is no other statement in the contract about the quality. Implied warranties? |
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Definition
| Contract Answer 169;;No. Disclaimer is effective because it is conspicuous - bold print or all capital letters are likely to draw the attention of a reasonable person, so don't have to use the magic words "as is." Same for sale or lease. |
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Term
| Contract Q170;;Buyer buys an oven from Store:"all operating parts are guaranteed for 2 years" & that "warranty liability shall be limited to replacement parts." A year later, a defect causes a fire that destroys Buyer's house. Limitation enforceable? |
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Definition
| Contract Answer 170;;It depends. This is an express warranty with a limitation.;(1) The seller can limit buyer's remedies for both express and implied warranties, though express warranties can't be disclaimed,;(2) Test of validity of the limitation is whether it is unconscionable ("shocks the conscious of the court"),;(3) Unconscionability is measured at the time the contract was formed, not the time of the mishap.;;This limit is probably enforceable because there is only property damage. |
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Term
| Contract Q171;;Bud buys an oven from Store:"all operating parts are guaranteed for 2 years", "warranty liability shall be limited to replacement parts." A year later, a defect causes a fire that injures Bud and destroys his house. Limitation enforceable? |
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Definition
| Contract Answer 171;;No. It is presumed unconscionable to limit recovery for personal injury in actions involving consumer goods. |
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Term
| Contract Question 172;;Can you disclaim an express warranty? |
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Definition
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Term
| Contract Question 173;;What is the Seller's Delivery Obligation in a Sale or Lease of Goods Involving a Common Carrier? |
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Definition
| Contract Answer 173;;(1) Shipment contract: seller must get the goods to a common carrier;make reasonable delivery arrangements;& notify buyer. Most contacts are in this category.;(2) Destination contract: seller must get the goods to where buyer is located. |
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Term
| Contract Question 174;;Pearl Beer Co. of San Antonio contracts to sell beer to Tex-Mex Pub in the Bronx. When does Pearl Beer Co. complete its delivery obligation if the contract is a shipment contract? |
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Definition
| Contract Answer 174;;Once they make reasonable arrangements to ship and tell those arrangements to Tex-Mex, Pearl has completed its obligations. |
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Term
| Contract Question 175;;Pearl Beer Co. of San Antonio contracts to sell beer to Tex-Mex Pub in the Bronx. The contract provides for delivery "FOB Bronx." When does Pearl Beer Co. complete its delivery obligation if the contract is a shipment contract? |
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Definition
| Contract Answer 175;;This is a Free on Board (FOB) delivery. On the bar exam if you see FOB and any city other than the seller's hometown it is a destination contract. |
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Term
| Contract Question 176;;When goods are damaged before the buyer gets the goods, & neither the buyer or the seller is to blame, who bears the risk of loss? |
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Definition
| Contract Answer 176;;(1) Agreement of the parties controls.(2) Breach: the breaching party is liable for any uninsured loss, even if the loss was unrelated to the breach.(3) Delivery by common carrier: the risk shifts to the buyer when the seller has completed its delivery obligations.;(4) If no common carrier (e.g., buyer to pick up or seller to deliver), the answer depends on whether the seller is a merchant.(a) If the seller is a merchant, seller bears the risk of loss until the buyer takes physical possession of the goods.(b) If the seller is a non-merchant, the seller bears the risk of loss until seller "tenders" the goods;;If the seller bears the risk of loss, the seller must provide new goods to the buyer for no additional cost, or is liable for breach of contract. If the buyer bears the risk, the buyer must still pay the contract price. |
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Term
| Contract Q177;;Pearl Co. of Austin contracts to sell beer to Tex-Mex Pub in the Bronx. The beer spoils in transit with UPS. The contract is silent on risk of loss. Who has the risk of loss if Pearl shipped the beer one week after the contract deadline? |
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Definition
| Contract Answer 177;;Contract would control but doesn't address risk of loss. Next look at breach. Pearl must cover the loss because they are in breach by shipping late. Late shipping is unrelated to the electrical short but that does not matter. This is too easy to be on the exam;the next scenario is more likely tested. |
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Term
| Contract Q178;;Pearl Co. of Austin contracts to sell beer to Tex-Mex Pub in the Bronx. The beer spoils in transit with UPS. The contract is silent on risk of loss. Who has the risk of loss if Pearl shipped on time, and it was was a shipment contract? |
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Definition
| Contract Answer 178;;Assuming Pearl met the delivery obligations the risk of loss is on Tex-Mex. They must pay Pearl for the beer. Tex-Mex should sue the carrier. |
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Term
| Contract Q179;;Pearl Co. of Austin contracts to sell beer to Tex-Mex Pub in the Bronx. The beer spoils in transit with UPS. The contract is silent on risk of loss. Pearl shipped the beer on time. Who has the risk of loss if it was a destination contract? |
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Definition
| Contract Answer 179;;Risk remains with the seller until the buyer receives the goods. Beer does not conform with the contract upon receipt so Pearl has to provide new goods or pay damages. |
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Term
| Contract Q180;;Pearl Co. of Austin contracts to sell beer to Tex-Mex Pub in the Bronx for delivery "FOB Austin". The beer spoils in transit with UPS. The contract is silent on risk of loss. Pearl shipped the beer on time. Who has the risk of loss? |
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Definition
| Contract Answer 180;;Pearl is in Austin so this is a shipment/shipping contract. Buyer bears the risk and must pay for the beer |
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Term
| Contract Question 181;;Dracula contracts to buy a coffin from Six Feet Under Undertakers. Dracula is to drive the loading dock & pick it up there. Before Dracula picks up the coffin, it is destroyed by a fire. Does Dracula have to pay for the coffin? |
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Definition
| Contract Answer 181;;No Six Feet is a merchant. It bears the risk of loss until Dracula takes possession. |
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Term
| Contract Question 182;;Dracula contracts to buy a coffin at Morticia's garage sale. Before Dracula picks up the coffin, it is destroyed by a fire. Does Dracula have to pay for the coffin? What if Dracula is in the business of buying & selling coffins? |
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Definition
| Contract Answer 182;;Yes. Dracula must pay. Morticia is not a merchant, so once she tenders the goods Dracula has the risk of loss. Whether Dracula is a merchant is immaterial;seller's status is all that matters. |
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Term
| Contract Question 183;;Roy leases a computer from Gigabyte Computer NY Co. for 5 years for $200 a month. One month after the computer is delivered to Roy, it is destroyed in a flood. Who has the risk of loss? |
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Definition
| Contract Answer 183;;Giga has the risk. Leaser bears risk even though lessee is in possession. Article 2A. The lessor has the risk of loss except in a finance lease. |
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Term
| Contract Q184;;Roy leases from Citibank NY a computer that Citibank had bought from Gigabyte Co. The 5-year lease provides for rent of $200 a month. One month after the computer is delivered to Roy, it is destroyed by a flood. Who has the risk of loss? |
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Definition
| Contract Answer 184;;Finance lease is the exception. Roy has the risk. Obvious attempt to protect banks. Article 2A. The lessor has the risk of loss except in a finance lease. |
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Term
| Contract Question 185;;What is the perfect tender rule? |
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Definition
| Contract Answer 185;;Art 2 uses the Perfect tender rule: the standard by which a seller's performance is measured. Under the perfect tender rule, a seller must deliver perfect goods in the right place at the right time. If not, the buyer has the right to reject the non-conforming goods. |
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Term
| Contract Question 186;;Buyer and Seller enter a contract that provides that Seller will deliver 50 green tee shirts, & Buyer will pay $1,000. Seller delivers 50 yellow tee shirts. What are Buyer's rights? |
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Definition
| Contract Answer 186;;Buyer can reject the goods. Ad need not pay. Buyer can accept if she wants and thus pay, but that is her option. |
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Term
| Contract Question 187;;What is an option to cure? |
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Definition
| Contract Answer 187;;A seller who fails to make perfect tender may have an option to cure. It usually depends on whether the time for the seller's performance has expired, which is usually the case in real life. |
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Term
| Contract Q188;;Buyer and Seller agree that Seller will deliver 50 green tee shirts by June 6, and Buyer will pay $1K. Seller delivers 50 yellow shirts. Seller delivers yellow tee shirts May 5. Buyer rejects the yellow shirts. What can Seller do? |
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Definition
| Contract Answer 188;;Deliver green t-shirts by June 6th to fulfill the contract OR can do nothing, breach and pay damages. If there are dates and nonconforming goods discussed in the problem it is probably about the option to cure. |
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Term
| Contract Q189;;In contract, Seller will deliver 50 green tee shirts by June 6, and Buyer will pay $1K. Seller delivers yellow shirts June 6. In the past, Buyer accepted shirts in colors different from contract specs. Does Seller have a right to cure? |
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Definition
| Contract Answer 189;;Yes, even though the deadline has passed. The facts show that the seller had reason to believe the wrong goods would be acceptable. For the exam the only time a seller can cure after the time to perform has expired is when past conduct indicated non-conforming goods were acceptable. |
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Term
| Contract Question 190;;Buyer orders 20 kegs of beer from Seller. Seller makes 5 separate deliveries of 4 kegs each. Is this an installment sales contract? |
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Definition
| Contract Answer 190;;Not sure. Need to know what the contract says, not what the seller did. |
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Term
| Contract Question 191;;A contract between provides that H&H Bagels will deliver 500 bagels by 9:00 a.m. each morning of the bar review course and that BAR/BRI will pay on delivery. Is this an installment sales contract? |
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Definition
| Contract Answer 191;;Yes. Requires delivery in separate installments (daily deliveries). |
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Term
| Contract Question 192;;A contract between provides that H&H Bagels will deliver 500 bagels by 9:00 a.m. each morning of the bar review course and that BAR/BRI will pay on delivery. One day, H&H delivers 450 bagels at 9:15 a.m. What are BAR/BRI's rights? |
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Definition
| Contract Answer 192;;Cannot reject the installment or the entire contract. The standard in installment sales is "substantial impairment" and here we don't have it. You will get the missing 50 bagels on another day. |
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Term
| Contract Question 193;;How does the perfect tender rule apply to an installment sales contract? |
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Definition
| Contract Answer 193;;It doesn't. Perfect tender rule does not apply to an installment sales contract. Policy: assumes seller will cure in the course of ongoing performance. |
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Term
| Contract Question 194;;In March, I contracted to buy clothing from Frederick's of Hollywood. I paid for the goods before they arrived in Austin. Did I accept the goods by paying for them? |
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Definition
| Contract Answer 194;;No. Merely paying for goods is not acceptance. Must have the opportunity to inspect before goods are deemed accepted. Do not have to actually inspect, only have to have the opportunity to inspect. |
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Term
| Contract Question 195;;In March, I contracted to buy clothing from Frederick's of Hollywood. I paid for the goods before they arrived in Austin. I've had the goods since March 5. Have I accepted them? |
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Definition
| Contract Answer 195;;Yes. If buyer retains the goods without rejection after having a reasonable opportunity to inspect then the buyer has impliedly accepted the goods. |
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Term
| Contract Question 196;;What is the effect of acceptance? |
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Definition
| Contract Answer 196;;(1) (1) Once a buyer accepts goods, it is too late for the buyer to reject.;(2) A buyer who accepts non-conforming goods can still get damages. |
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Term
| Contract Question 197;;When can the buyer revoke an acceptance of goods? |
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Definition
| Contract Answer 197;;General rule: once a buyer accepts, the buyer cannot revoke acceptance. Exception: a buyer can revoke acceptance only if the non-conformity substantially impairs their value and was difficult to discover (a latent defect). |
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Term
| Contract Question 198;;Monk buys a mobile home on July 7 & moves in. On September 9, it rains for the first time. Monk then discovers hairline cracks in the roof. Can Monk reject the mobile home? |
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Definition
| Contract Answer 198;;No. By living in it for more than 2 months he impliedly accepted it. |
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Term
| Contract Question 199;;Monk buys a mobile home on July 7 & moves in. On September 9, it rains for the first time. Monk then discovers hairline cracks in the roof. Can Monk revoke acceptance of the mobile home? |
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Definition
| Contract Answer 199;;Yes. Cracks were difficult to discover and they substantially impaired the value. He can revoke within a reasonable time of discovery of the cracks. |
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Term
| Contract Question 200;;Seller contracts to sell her car to Buyer. The contract provides for payment by 5:00 p.m. Sunday. What if Buyer gives Seller a check for the contract price? |
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Definition
| Contract Answer 200;;Though checks are generally ok, the seller does not have to accept them;they can insist on cash. But if the seller does insist on cash, the buyer will have additional reasonable time to get the cash. |
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Term
| Contract Question 201;;What is the standard of performance in common law contreacts? |
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Definition
| Contract Answer 201;;Substantial performance is the standard [substantial performance means there is no material breach]. The terms are synonyms. Perfection is not required. |
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Term
| Contract Question 202;;I contract with Martha Stewart to decorate my house. She finishes the job except for the window treatment in one bedroom. Is this substantial performance? |
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Definition
| Contract Answer 202;;Yes. Almost is good enough. However this is a question of fact so won't be tested. |
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Term
| Contract Question 203;;I contract with Martha Stewart to decorate my house. She finishes the job except for the window treatment in one bedroom. Can I sue Martha for breach of contract & recover damages from her? |
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Definition
| Contract Answer 203;;Yes. Any breach (imperfect performance) whatsoever gives rise to a cause of action for damages. |
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Term
| Contract Question 204;;I contract with Martha Stewart to decorate my house. She finishes the job except for the window treatment in one bedroom. Am I excused from paying Martha the contract price? |
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Definition
| Contract Answer 204;;No. Under common law only a material breach excuses the other party from performing their part of the bargain. |
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Term
| Contract Question 205;;I contract with Martha Stewart to decorate my house. Martha quits after she has decorated only the dining room. What are my rights against Martha? |
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Definition
| Contract Answer 205;;This is a material breach. Can sue for damages and are excused from paying the contract price. |
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Term
| Contract Question 206;;When is a contract divisible as to substantial performance? |
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Definition
| Contract Answer 206;;The terms of the contract must indicate divisibility. The fact that performance could have been divided is not the standard. |
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Term
| Contract Question 207;;Martha contracts to decorate 10 identical cabanas for $90,000. She decorates 9 cabanas, then quits. Can Martha recover under contract law for painting the 9 cabanas? |
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Definition
| Contract Answer 207;;Yes, 9 of 10 is substantial performance so she gets the entire contract price, but is liable for damages from the breach. |
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Term
| Contract Question 208;;Martha contracts to decorate 10 identical cabanas for $9,000 a cabana. She decorates 3 cabanas, then quits. Can Martha recover under contract law for painting the 3 cabanas? |
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Definition
| Contract Answer 208;;3 of 10 is a material breach. This excuses the other party from performing (paying). Martha can recover in quasi-contract for the reasonable value of what she has done. |
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Term
| Contract Question 209;;Martha contracts to decorate 10 identical cabanas for $90,000. She decorates 3 cabanas, then quits. Can Martha recover under contract law for painting the 3 cabanas? |
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Definition
| Contract Answer 209;;Per unit payment = divisible contract. Look for substantial performance on a unit by unit basis. She has substantially performed on 3, so she must be paid $27,000. |
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Term
| Contract Question 210;;Seller contracts to sell 50 green tee shirts to Buyer. Seller delivers 45 green tee shirts & 5 yellow tee shirts. Is Buyer excused from performing (i.e., paying for the tee shirts)? |
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Definition
| Contract Answer 210;;Yes. Not perfect tender, and Article 2 generally requires perfect tender. There is no indication the contract was divisible or that past conduct allows this performance. |
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Term
| Contract Question 211;;I contract with Martha Stewart to decorate my house. She quits after decorating only the dining room. Am I excused from performing (i.e., paying for the decorating)? |
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Definition
| Contract Answer 211;;Yes. Material breach. Martha can still recover in quasi-contract for the reasonable value of the benefit conferred. |
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Term
| Contract Question 212;;Martha contracts to decorate my house for $50,000, payable 30 days after she completes her work. After Martha starts the job, I tell that her I am not going to pay her for her work. Is Martha excused from performing? |
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Definition
| Contract Answer 212;;Yes, by my anticipatory repudiation. |
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Term
| Contract Question 213;;Martha contracts to decorate my house for $50K, payable 30 days after she completes her work. After Martha starts the job, I tell that her I am not going to pay her for her work. Can Martha sue me for breach of contract? |
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Definition
| Contract Answer 213;;Yes. Anticipatory repudiation operates exactly like a material breach. |
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Term
| Contract Q214;;Martha contracts to decorate my house for $50K, payable 30 days after she finishes. Martha starts the job. I tell that her I am not going to pay her for her work. 2 days later, I tell Martha that I will pay her. Should she resume work? |
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Definition
| Contract Answer 214;;Yes. I can retract repudiation as long as Martha has not relied on it (took another job). |
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Term
| Contract Question 215;;Martha contracts to decorate my house in exchange for a unique signed picture I own. While Martha is decorating my house, I sell the picture. Is Martha excused from performing? |
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Definition
| Contract Answer 215;;Yes. Repudiation by conduct. It's just like telling here I repudiate. |
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Term
| Contract Question 216;;What are the four excuses based on a later agreement? |
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Definition
| Contract Answer 216;;(1) Modification (substituted agreement);(2) Accord and satisfaction;(3) Rescission (cancellation);(4) Novation |
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Term
| Contract Q217;;Joey borrows $1K from Rachel & promises to repay the debt with interest. Later, they agree that Rachel will discharge the debt now if Joey promises to paint her apartment within 30 days. What are Rachel's rights if Joey does not? |
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Definition
| Contract Answer 217;;Only right is to sue for the painting since the obligation to repay debt was discharged by the agreement. The discharge took immediate effect when the modification was accepted. |
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Term
| Contract Q218;;Joey borrows $K from Rachel & promises to repay the debt with interest. Later, Joey & Rachel agree if Joey paints her apartment within 30 days, then Rachel will discharge the debt. What is the "accord" and what is the "satisfaction"? |
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Definition
| Contract Answer 218;;Accord is a new agreement;an agreement to do something different by parties already in a contract. Satisfaction is performance of the accord. |
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Term
| Contract Q219;;Joey borrows $1,000 from Rachel & promises to repay the debt with interest. Later, Joey & Rachel agree that if Joey paints her apartment within 30 days, then Rachel will discharge the debt. What if Joey does not paint Rachel's apartment? |
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Definition
| Contract Answer 219;;Rachel can sue on the accord or on the original debt. The accord satisfies Joey's debt only when the accord is satisfied. |
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Term
| Contract Question 220;;Opie contracts to mow Helen Crump's lawn. Later, Opie & Helen agree to cancel the contract. If Opie does not mow her lawn, can Helen sue Opie for breach of contract? |
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Definition
| Contract Answer 220;;No, Opie is excused by the recission. |
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Term
| Contract Q221;;Opie contracts to mow Helen Crump's lawn. After Opie mows Helen's lawn, Helen tells Opie she has unexpected hospital bills & they agree to cancel the contract. Is Helen's obligation to pay excused by this later rescission agreement? |
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Definition
| Contract Answer 221;;No. For rescission to be effective each party must have some performance remaining. Opie fully performed. |
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Term
| Contract Question 222;;Opie contracts to mow Helen Crump's lawn. Later, Opie & Goober & Helen agree that Goober will mow Helen's lawn instead of Opie. If Goober does not mow the lawn, can Helen sue Opie for breach of contract? |
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Definition
| Contract Answer 222;;No. Opie is excused by novation. Helena agreed to the substitution. Her agreement is the key. |
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Term
| Contract Question 223;;Opie contracts to mow Helen Crump's lawn. Later, Opie & Goober agree that Goober will mow Helen's lawn instead of Opie. If Goober does not mow Helen's lawn, can Helen sue Opie for breach of contract? |
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Definition
| Contract Answer 223;;Yes. Helen did not agree to the substitution so this is a delegation. Helen can sue Opie (the delegator). |
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Term
| Contract Question 224;;Caldwell contracts to lease his hall to Taylor for a concert on June 1. The hall burns down on May 29. Taylor sues Caldwell for breach of contract. Is Caldwell excused from performing? |
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Definition
| Contract Answer 224;;Yes, the performance of renting the hall is impossible. |
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Term
| Contract Question 225;;Builder contracts to build a house for Owner for $300,000. After Builder is almost done, the house is destroyed by fire. Owner sues Builder for breach of contract. Is Builder excused from performing? |
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Definition
| Contract Answer 225;;No. He can rebuild. Performance is possible. It is more expensive than what the builder expected but "more expensive" is not an excuse. |
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Term
| Contract Question 226;;Kramer contracts to buy Jerry's 1971 Corvette. After the contract, but before Jerry has tendered delivery of the car to Kramer, the car is destroyed by a flood. Kramer sues for breach of contract. Is Jerry's performance excused? |
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Definition
| Contract Answer 226;;Yes. Before delivery, seller has the risk of loss. No idea why there is no tender, but there isn't. Jerry's performance is excused. Under Art 2 when the seller still has the risk of loss, performance is excused if the goods identified to the contract are unexpectedly destroyed. |
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Term
| Contract Question 227;;Kramer contracts to buy Jerry's 1971 Corvette. After Jerry tenders delivery of the car to Kramer, but before Kramer takes it, the car is destroyed by a flood. Kramer refuses to pay for the car. Is Kramer's performance excused? |
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Definition
| Contract Answer 227;;No. After delivery, buyer has the risk of loss. It is not impossible for Kramer to pay;he still has money. Where buyer has risk of the loss in a sale of goods, there destruction does not excuse the obligation to pay, per Art 2. WOW!!! Also, notice that Jerry is not a merchant. |
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Term
| Contract Q228;;Seller contracts to sell Buyer 1,000 pounds of cow manure for $200. After the contract, but before the risk of loss has passed to Buyer, fire destroys Seller's cow manure. Buyer sues Seller for breach. Is Seller's performance excused? |
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Definition
| Contract Answer 228;;No. Contract for fungible items (goods that are fully interchangeable, like oil, ore, sand and water) the destruction of the seller's quantity of the goods does not excuse sellers delivery obligation. |
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Term
| Contract Question 229;;What are the Excuses Based on a Later Unforeseen Occurrence that Makes Performance Impossible or Frustrates the Purpose of the Performance? |
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Definition
| Contract Answer 229;;(1) Destruction of thing necessary for performance;(2) Death or incapacity of a person essential for performance;(3) Supervening government regulation or order;(4) Frustration of purpose (buyer's remedy). |
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Term
| Contract Question 230;;Van Gogh contracts to paint Ida Hogh's portrait. Van dies. Ida sues Van's estate for breach of contract. Is Van's estate excused from performing? |
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Definition
| Contract Answer 230;;Yes. Hired for special skills so death is an excuse. |
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Term
| Contract Question 231;;Opie contracts to mow Helen Crump's lawn. Opie dies. Helen sues Opie's estate for breach of contract. Is Opie's estate excused from performing? |
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Definition
| Contract Answer 231;;No. No unique skills needed to operate a lawn mower. Estate is liable. |
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Term
| Contract Question 232;;Roseanne contracts to perform as a featured dancer at Sugar's, an Austin "nudie bar." The City Council learns of this & outlaws nude dancing. Is Roseanne excused from performing? |
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Definition
| Contract Answer 232;;Yes. No one can perform under the law. |
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Term
| Contract Question 233;;Phoebe agrees to rent Joe's apartment for Thanksgiving morning. Joe knows that Phoebe's purpose in renting the apartment is to watch the parade. The parade is cancelled 2 days before Thanksgiving. Is Phoebe's performance excused? |
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Definition
| Contract Answer 233;;Yes. Look for 1. at the time of the contract both parties understood the purpose of contract and 2. latter on an unforeseen event frustrates that purpose. |
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Term
| Contract Q234;;Phoebe agrees to rent Joe's store. Joe knows that Phoebe's purpose is to operate a coffee shop. A month later, Starbucks announces that it is opening a coffee shop next door. Is Phoebe's performance of the lease contract excused? |
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Definition
| Contract Answer 234;;No. She can still open a coffee shop. Only difference is that it will probably be less profitable than Phoebe hoped. That is not "frustration." |
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Term
| Contract Question 235;;B contracts to buy S's house for $300,000 "on condition that" it is appraised at $300,000. The house is appraised at $295,000. Is B's performance excused? Can B sue S for breach of contract? |
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Definition
| Contract Answer 235;;Yes. Express conditions must be strictly complied with. Unlike with conditional acceptance, both parties agreed to this condition in the contract, so almost is not good enough. No. Words of condition do not create an obligation that the condition be met, it just limits obligations under the contract. |
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Term
| Contract Question 236;;Xena contracts to have Hercules paint her house & pay him $2,000 if she is satisfied with the work. Hercules paints Xena's house. Everyone likes his work except Xena. Is Xena excused from paying Hercules for the job? |
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Definition
| Contract Answer 236;;No. Satisfaction means reasonable satisfaction. That is an objective standard. Xena has to pay if reasonable person would be satisfied. |
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Term
| Contract Question 237;;Xena contracts to have Hercules paint her portrait & pay him $2,000 if she is satisfied with the work. Hercules paints Xena's portrait. Everyone likes his work except Xena. Is Xena excused from paying Hercules for the job? |
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Definition
| Contract Answer 237;;If it's about art or matters of personal taste then all that matters is Xena's opinion, not the opinion of a reasonable person. It is a subjective standard. |
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Term
| Contract Question 238;;Tiger Woods agrees to let Derek Jeter use his golf clubs for $100/week if it rains on 7/4. What kind of condition? |
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Definition
| Contract Answer 238;;A condition precedent, have to fulfill the obligation before Tiger's obligation matures. |
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Term
| Contract Question 239;;Tiger Woods agrees to let Derek Jeter use his golf clubs for $100/week as long as Derek keeps the clubs in good repair. What kind of condition? |
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Definition
| Contract Answer 239;;A concurrent condition, runs alongside Tiger's obligation. |
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Term
| Contract Question 240;;Tiger Woods agrees to let Derek Jeter use his golf clubs for $100/week until the Mets win the World Series. What kind of condition? |
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Definition
| Contract Answer 240;;A condition subsequent. Performance comes first and occurrence of condition cuts of the performance. |
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Term
| Contract Question 241;;B contracts to buy S's house for $300,000 "provided that" B obtains a $200,000 mortgage at the rate of 5% or less. B makes no effort to obtain a mortgage. B refuses to buy the house. S sues for breach of contract. What result? |
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Definition
| Contract Answer 241;;This is a failure to cooperate. Condition protects the buyer, but lost the protection by not looking for a mortgage. Buyer is unconditionally bound to pay the contract price. |
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Term
| Contract Q242;;Don's progress payments are conditioned on Builder getting the month's work certified. Don tells Builder he will make future payments without a certificate. The next month, no certificate. Don refuses to pay. Builder sues. What result? |
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Definition
| Contract Answer 242;;Builder wins. Don must pay. Don was protected by the provision but waived it. Builder relied on that so Don loses the protection.;;A waiver can be retracted to the extent that the other party has not relied. If he does, he can insist on a certificate in the future. |
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Term
| Contract Question 243;;Thoreau contracts to sell Walden Pond to Proust. Later, Thoreau has second thoughts & refuses to convey Walden Pond. Proust wants Walden Pond, not money. What result? |
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Definition
| Contract Answer 243;;Proust will win. Each parcel of real property is considered unique. Even if there was an identical pond across the road, Walden is considered unique. Since no other real property can be a substitute, money to buy another parcel cannot be a substitute. |
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Term
| Contract Question 244;;What is specific performance and when is it available? |
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Definition
| Contract Answer 244;;Specific Performance: compelling a party to do what he agreed to do. Not generally available on the bar. It is an equitable remedy available only if money damages are inadequate. Need a compelling reason. |
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Term
| Contract Question 245;;Seller contracts to sell goods to Buyer. Seller breaches. Buyer sues for the goods. Can he get them? |
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Definition
| Contract Answer 245;;Under Article 2, specific performance is available only if the goods are unique. Look for antiques, art or custom made goods. Otherwise injured party gets money. |
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Term
| Contract Question 246;;BARBRI hires me to lecture. I breach. BARBRI wants me to lecture for them. Can they get specific performance? |
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Definition
| Contract Answer 246;;In a services contract, specific performance is not available, too much like indentured servitude The service rendered would likely be very poor, so no one would ask for it anyway, unless maybe the reputational effects from poor performance are bad. But that is not on the exam. |
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Term
| Contract Question 247;;BARBRI hires me to lecture. I breach, and instead lecture for Ally McBeal's Bar Review. BARBRI wants an injunction to keep me from lecturing for Ally McBeal's Bar Review. |
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Definition
| Contract Answer 247;;This is possible. Courts are willing to prevent work for someone else;they are not willing to force me to work. |
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Term
| Contract Q248;;B buys goods on credit from S on May 10. Goods are delivered to B on May 20. B is insolvent on May 20. On May 29, S learns of B's insolvency, and makes a demand to reclaim the goods. B still has the goods. Can S reclaim them? |
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Definition
| Contract Answer 248;;Yes. The key points are "insolvency" and "on credit." If the buyer is insolvent on the day it received the goods the seller has 10 days to reclaim them. The 10 days runs from date of receipt, not date of contract. If this is tested the question will provide an insolvency date so you can apply the 10 day rule. |
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Term
| Contract Q249;;B buys goods on credit from S on May 10. Goods are delivered to B on May 20. B is insolvent on May 20. B sold the goods to a third party on May 25. On May 29, S learns of B's insolvency, and makes a demand to reclaim the goods. Can he? |
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Definition
| Contract Answer 249;;Seller has no right to reclaim against a 3rd party. Reclamation is only possible against the original buyer. |
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Term
| Contract Question 250;;Britney takes her watch to Jay's Jewelers to be repaired. Jay's Jewelers wrongfully sells the watch to Gwen, a bona fide purchaser (means Gwen didn't know it was Britney's) for value. Can Britney recover the watch from Gwen? |
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Definition
| Contract Answer 250;;If they take goods for repair to someone who sells those goods, the entrusting owner has no right to recover the goods from a BFP. The BFP didn't know and should not be punished (although if Gwen can get her money back it doesn't seem like much punishment, that is not the rule). Britney can sue Jay for conversion but has no cause of action against Gwen. |
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Term
| Contract Question 251;;When does contract law provide for punitive damages? |
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Definition
| Contract Answer 251;;Never! No punitive damages: purpose of contract damages is to compensate, not punish. No right to recover punitive damages under contract law. Contract law is about making the injured party whole, not punishing the other party. |
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Term
| Contract Question 252;;When are liquidated damages appropriate? |
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Definition
| Contract Answer 252;;Liquidated damages (a pre-set money value for a breach): permissible if damages were difficult to estimate & the clause is a reasonable forecast of probable damages. The question is whether these damages are a reasonable forecast or a penalty. They cannot function as a penalty clause. |
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Term
| Contract Question 253;;Simon hires Thom to redo his office. The contract requires that the job be completed by April 5, and provides for damages of $100 a day for each day Thom is late. Thom finishes 20 days late. Is the liquidated damages clause valid? |
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Definition
| Contract Answer 253;;Yes. The $100 per day is flexible Damages are graduated in increase with the amount of delay. Proportional = reasonable forecast. |
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Term
| Contract Question 254;;Simon hires Thom to redo his office. The contract requires that the job be completed by April 5, and provides for $20,000 in damages if Thom is late. Thom is 20 days late. Is the liquidated damages clause valid? |
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Definition
| Contract Answer 254;;No. This is a "shotgun clause." It is not a reasonable forecast. One size does not fit all. 1 day late or 100 days late is the same penalty. If there is a fixed $ amount in a liquidated damages clause on the bar always say it is not valid. |
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Term
| Contract Question 255;;What are expectation damages? |
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Definition
| Contract Answer 255;;Expectation damages: put the plaintiff in as good a position as full performance. Injured party deserves the benefit of the bargain and will get it. |
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Term
| Contract Question 256;;O hires P to paint his house for $20,000. P does not paint the house. O pays another painter $23,000 to paint the house. How much can O recover from P for P's breach of contract? |
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Definition
| Contract Answer 256;;$3000. The owner expected to pay $20,000 and he should. If he gets back $3000 his expectations are met. |
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Term
| Contract Question 257;;Tenant contracts to lease a building upstate from Landlord for one year for $12,000. Tenant breaches. Landlord leases the building to someone else for $10,000. How much can Landlord recover for Tenant's breach? |
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Definition
| Contract Answer 257;;$2000. Expected to get $12,000 and got $10,000. Deserves the difference. |
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Term
| Contract Question 258;;B contracts to buy carpeting for $2,500. S does not deliver. B pays another supplier $2,800 for the same carpeting. How much can B recover for S's breach? |
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Definition
| Contract Answer 258;;$300. Article 2 uses the same principle of expectation damages. (Sellers tend to breach in a rising market, thus buyer must pay a higher market price to cover). |
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Term
| Contract Question 259;;B contracts to buy carpeting for $2,500. S does not deliver. B pays another supplier $6,000 for a much higher grade of carpeting. How much can B recover for S's breach? |
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Definition
| Contract Answer 259;;Can't get the difference. Buyer can't use seller's breach to benefit, must use good faith. The seller must also use good faith if the buyer breaches. |
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Term
| Contract Q260;;B contracts to buy an antique chair for $4K. B pays, then discovers the chair is not antique. B keeps the chair & sues for breach of contract. The chair is worth $2K. Had it been antique, the chair would be worth $7K. What are B's damages? |
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Definition
| Contract Answer 260;;$5000. Buyer expected to have $7000 chair. Ends up with chair worth $2000 and needs $5000 to meet expectations. (Usually buyer rejects non-conforming goods but doesn't have to). |
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Term
| Contract Question 261;;B contracts to buy an antique chair from S for $4,000. B breaches. S sells the same chair to another buyer for $4,000. What are S's damages? |
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Definition
| Contract Answer 261;;None. Not a volume sale issue since one of a kind. |
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Term
| Contract Question 262;;B contracts to buy an antique chair from S for $4,000. B breaches. S incurs $100 advertising the chair for sale after B breaches. S sells the same chair to another buyer for $4,000. What are S's damages? |
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Definition
| Contract Answer 262;;$100 is not expected by seller and is recoverable as incidental damages. Must be;(1) the cost of arranging a replacement deal or;(2) the expenses buyer incurs taking care of non-conforming goods. Incidental damages are always recoverable. |
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Term
| Contract Question 263;;Henry contracts to buy a leather outfit from S&M Leather Store's regular inventory for $900. Henry breaches. The next day, S&M Leather Store sells the same outfit to Janet for $900. How much can S&M recover for Henry's breach? |
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Definition
| Contract Answer 263;;Lost profit. "Regular inventory" is the key. Seller lost 1 unit of profit. Could have met Janet's needs without the breach. Henry is liable for the lost profit. Lost volume seller is often on the bar but a computation of lost profit is not required. |
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Term
| Contract Question 264;;What kind of damages are available in contract? |
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Definition
| Contract Answer 264;;(1) Liquidated damages: pre-set money value for breach,;(2) Expectation damages: put P in as good a position as full performance,(3) Consequential damages: special damages particular to P that are reasonably foreseeable at the time of contract;(4) incidental damages: damages incident to the breach, like advertising costs for resale;;There is no right to recover punitive damages under contract law. There is a responsibility to mitigate damages. Can't recover for damages that you could have avoided with reasonable effort. |
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Term
| Contract Question 265;;Fuzzy contracts to sell Newt a peach-picking machine for $10,000. Fuzzy breaches. Newt buys the same model machine from another supplier for $11,500. What are Newt's damages for Fuzzy's breach of contract? |
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Definition
| Contract Answer 265;;$1500 in expectation damages. |
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Term
| Contract Q266;;Fuzzy contracts to sell Newt a peach-picking machine for $10,000. Fuzzy breaches. Newt is unable to find another harvesting machine right away. As a result, Newt's peach crop rots, causing Newt a $3,000 loss. Is Fuzzy liable for this loss? |
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Definition
| Contract Answer 266;;Depends on whether this is reasonably foreseeable to Fuzzy at the time they entered into the contract. Reasonable person standard applies. |
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Term
| Contract Question 267;;Kay Sera is fired in violation of her contract. She makes $900 a week. Her employer alleges that Kay can get a comparable job paying $800 a week. What are Kay's damages? |
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Definition
| Contract Answer 267;;$100 a week, assuming the allegations are true. Key points:;(1) On the bar exam "comparable employment" = the same kind of work in the same city;(2) Kay does not have to take the job. Just can't recover damages she could avoid with reasonable effort.;The burden to plead and prove is on the breaching party (the employer) since this is a defense. |
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Term
| Contract Question 268;;What is the lost volume rule? |
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Definition
| Contract Answer 268;;Where a contract is breached between a buyer and a volume seller, seller can seek damages of the profit seller would have made on the sale. |
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Term
| Contract Question 269;;In mitigation, what is "comparable employment"? |
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Definition
| Contract Answer 269;;On the bar exam "comparable employment" = the same kind of work in the same city |
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Term
| Contract Question 270;;What is the right to request assurances? |
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Definition
| Contract Answer 270;;When it looks to one party of a contract that the other party might be heading towards a breach, the first party can request reasonable assurances that the obligation can be completed. |
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Term
| Contract Question 271;;How do expectation damages between buyer and seller? |
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Definition
| Contract Answer 271;;Buyer is entitled to the difference between the sale price and the replacement cost. Seller is entitled to the difference if the item is resold, and the value of the sale if it is not. |
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Term
| Contract Question 272;;What is the merchant's confirmatory memo exception to the Statute of Frauds? |
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Definition
| Contract Answer 272;;A merchant may use its own writing to satisfy the SoF against the other party to the contract if (1) both parties are "merchants", (2) the writing claims there is a prior oral agreement, and (3) recipient does not object in writing within ten days. |
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Term
| Contract Question 273;;What is the custom made goods exception? |
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Definition
| Contract Answer 273;;The sale of custom made goods not suitable for others does not require a writing under the Statute of Frauds. |
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Term
| Contract Question 274;;What is the general rule of delegation of duties? |
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Definition
| Contract Answer 274;;General rule: contractual duties may be delegated without the obligee's consent |
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Term
| Contract Question 275;;Opie contracts to mow Helen Crump's lawn for $25. Opie delegates the duty to Goober. Goober does a great job. Helen objects to Opie's delegation. Does Helen have to pay? |
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Definition
| Contract Answer 275;;Yes. Helen's consent is not needed. Once she gets performance/the benefit, she must pay. |
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Term
| Contract Question 276;;Opie contracts to mow Helen Crump's lawn for $25. The contract between Opie & Helen prohibits delegation. Opie delegates the duty to Goober. Goober does a great job. Helen objects to Opie's delegation. Does Helen have to pay? |
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Definition
| Contract Answer 276;;Contract controls. Helen doesn't have to pay. |
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Term
| Contract Question 277;;Opie contracts to mow Helen Crump's lawn for $25. Their contract prohibits assignment. Opie delegates the duty to Goober. Goober does a great job. Helen objects to Opie's delegation. Does Helen have to pay? |
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Definition
| Contract Answer 277;;On the multi-state this also means no delegation allowed. |
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Term
| Contract Question 278;;David Letterman is hired to host the 2005 Academy Awards. There is no contract language prohibiting delegation or assignment. Can Letterman delegate his duties to me? |
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Definition
| Contract Answer 278;;No. Can't delegate duties under a contract involve parties with special skills or special reputation. |
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Term
| Contract Question 279;;David Letterman is hired to host the 2005 Academy Awards. There is no contract language prohibiting delegation or assignment. Can Letterman delegate his duties to Robin Williams? |
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Definition
| Contract Answer 279;;No. Even though Robin has special skills or reputation they are not the same special skills or reputation so delegation is not allowed. |
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Term
| Contract Question 280;;Opie contracts to mow Helen Crump's lawn for $25. Opie pays Goober $15 to mow Helen's lawn. Goober goofs & does not mow the lawn. Can Helen sue Goober for breach of contract? |
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Definition
| Contract Answer 280;;Yes. A delegation leaves delegator liable. In novation Opie would not be liable because the obligee (Helen) surrendered her rights. In a delegation the obligee does not surrender rights. |
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Term
| Contract Question 281;;Opie contracts to mow Helen Crump's lawn for $25. Opie delegates the duty to Goober. Goober goofs & does not mow the lawn. Can Helen still sue Opie for breach of contract? |
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Definition
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Term
| Contract Question 282;;What is an Assignment of Rights? |
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Definition
| Contract Answer 282;;Two people make a contract;later, one person transfers his rights under the contract to a third party. |
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Term
| Contract Question 283;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to the $200,000 payment to Robin. Who are the assignor, the assignee and the obligor? |
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Definition
| Contract Answer 283;;(a) the assignor is Batman (person who later transfers rights under a contract);(b) the assignee is Robin (person to whom rights are transferred);(c) the obligor is Gotham City (person who owes performance the payment under the contract) |
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Term
| Contract Question 284;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to the $200,000 payment to Robin. Must Robin give Batman consideration to make the assignment valid? |
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Definition
| Contract Answer 284;;No. Gratuitous assignments are valid. |
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Term
| Contract Question 285;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to the $200,000 payment to Robin. Is the assignment enforceable if it is oral? |
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Definition
| Contract Answer 285;;No. If amount assigned is greater that $5000 it must be in writing. |
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Term
| Contract Question 286;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to the $200,000 payment to Robin. |
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Definition
| Contract Answer 286;;Assignment is no good. Must have language of present assignment such as "I assign" or "I hereby assign." "I will assign" is no good. This is easy to miss, so it's on the test. |
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Term
| Contract Question 287;;What do you call a person who did not make a contract, but still has rights under it, because the contract was intended to benefit him? |
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Definition
| Contract Answer 287;;Third-party beneficiary |
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Term
| Contract Question 288;;What do you call a person who promises to do something for the third party |
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Definition
| Contract Answer 288;;Promisor |
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Term
| Contract Question 289;;What do you call the contracting party who requests performance on behalf of a person not party to the contract? |
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Definition
| Contract Answer 289;;A promisee, asking the promisor to do something for the third-party beneficiary. |
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Term
| Contract Question 290;;When does a third party beneficiary have legal rights under the contract? |
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Definition
| Contract Answer 290;;When she is the intended beneficiary. If the third party is named in the contract, the third party is an intended beneficiary |
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Term
| Contract Question 291;;What do you call an unnamed person who benefits from a contract? |
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Definition
| Contract Answer 291;;An incidental third-party beneficiary, who does not have legal rights under the contract. |
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Term
| Contract Question 292;;I buy a $250K life insurance policy from Prudential, with the proceeds to go to my wife. I make all required premium payments, then die. Prudential refuses to pay my wife. Can she sue & collect the $250K for breach of contract? |
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Definition
| Contract Answer 292;;Yes. She is the third party beneficiary. My intent was to benefit her. |
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Term
| Contract Question 293;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Travis takes the $5,000, but never performs. Can W sue Travis under the contract & collect damages for breach? |
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Definition
| Contract Answer 293;;Yes. W is the third party beneficiary. |
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Term
| Contract Question 294;;Arnold pays Travis $5K to sing for W on May 3. Travis takes the $5, but never performs. W had invited Dick to come hear Travis on May 3. Can Dick sue Travis under the contract and recover damages for breach? |
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Definition
| Contract Answer 294;;No. Dick is incidental. Conduct did not intend to benefit Dick. Beneficiary must be named in the contract. |
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Term
| Contract Question 295;;Arnold is grateful for W's support during the gubernatorial campaign. Out of gratitude, Arnold pays Travis Tritt $5,000 to sing for W on May 3. What is W's position in the contract? |
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Definition
| Contract Answer 295;;W is a donee beneficiary. Arnold did not owe him money. |
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Term
| Contract Question 296;;Arnold owes W $5,000. Arnold pays Travis Tritt $5,000 to sing for W on May 3. What is W's position in the contract? |
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Definition
| Contract Answer 296;;W is a creditior beneficiary. W was a creditor of Arnold. |
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Term
| Contract Question 297;;How can you tell a Third-Party Beneficiary problem from an Assignment problem? |
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Definition
| Contract Answer 297;;Third-party beneficiary: all 3 parties are involved from the beginning.;Assignment: 2 people contract & a third person appears later on. |
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Term
| Contract Question 298;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Can Arnold & Travis rescind their contract before W learns of it? |
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Definition
| Contract Answer 298;;Yes, W's rights have not vested. |
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Term
| Contract Question 299;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Can Arnold & Travis rescind their contract after W learns of it & invites friends to the White House for dinner on May 3? |
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Definition
| Contract Answer 299;;No. W's rights vested because he 1. knows of the contract AND 2. relied on it. Reliance carries the vesting;at that point can't rescind or modify the contract. |
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Term
| Contract Question 300;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Can W sue Travis for breach if Travis does not perform as promised? |
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Definition
| Contract Answer 300;;Yes. Intended beneficiary can sue even though there is no privity. |
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Term
| Contract Question 301;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Arnold paid Travis with a $5,000 check & the check "bounced." Can W recover damages from Travis if Travis does not sing on May 3 as promised? |
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Definition
| Contract Answer 301;;No. Promisor can raise any defense he may have against the promise when sued by a third party beneficiary. Arnold can't recover so W can't either. |
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Term
| Contract Question 302;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Can W recover damages from Arnold if Travis does not sing on May 3 as promised? |
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Definition
| Contract Answer 302;;Only if W is a creditor beneficiary. Otherwise W has no rights against the promise (Arnold) at all. |
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Term
| Contract Question 303;;What is a creditor beneficiary? |
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Definition
| Contract Answer 303;;A creditor beneficiary is a party who is discharging his debt with a debtor by receiving benefit from the debtor's contract with another party. |
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Term
| Contract Question 304;;Arnold Schwarzenegger pays Travis Tritt $5,000 to sing for W on May 3. Can Arnold recover damages from Travis if Travis doesn't sing on May 3 as promised? Even if W is a donee beneficiary? |
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Definition
| Contract Answer 304;;Yes, just as he could with any other contract, even if W is a donee. Of course Arnold won't be able to show much in damages. |
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Term
| Contract Question 305;;Batman contracts to provide security for Gotham City for $200,000. Gotham City assigns its right to Batman's services to Metropolis. Does this substantially change the duties of the obligor (Batman)? |
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Definition
| Contract Answer 305;;Yes. Duties are very different (different population and crime rate). Assignment is not valid because substantially changes the duties of the obligor. |
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Term
| Contract Question 306;;Gotham City contracts to buy all the kryptonite it needs in 2005 from a distributor. Later, Gotham City assigns its rights under the contract to Metropolis. Does this substantially change the duties of the obligor (the distributor)? |
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Definition
| Contract Answer 306;;"All" indicates a requirement contract. Used to be that requirement contracts were not assignable but now they are, as long as assignee's requirements are in line with assignor's requirements. |
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| Contract Question 307;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to the $200,000 payment to Robin. Does this substantially change the duties of the obligor (Gotham City)? |
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| Contract Answer 307;;No. Just as easy to write a check to Robin as it is to Batman. Court-imposed (common law) limitation: an assignment cannot substantially change duties of the obligor. |
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| Contract Question 308;;Batman contracts to provide security for Gotham City for $200,000. The contract provides, "All assignments of rights under this contract are void." |
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Definition
| Contract Answer 308;;"Void" means an assignment is invalid. If Robin does the work he is screwed. |
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| Contract Q309;;Batman contracts to provide security for Gotham City for $200K. The Batman-Gotham contract provides, "Rights under this contract are not assignable." Nonetheless, Batman assigns the right to payment to Robin. Can Robin collect from Gotham? |
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Definition
| Contract Answer 309;;Yes. The language merely prohibits assignment. But the assignment is still valid. (Batman is liable for breach of contract but that is not Robin's problem. If it was either Batman or Gotham would be unjustly enriched.) |
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Term
| Contract Question 310;;Batman contracts to provide security for Gotham City for $200,000. Must Robin give Batman consideration to make the assignment valid? |
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Definition
| Contract Answer 310;;No. Gratuitous assignments are valid. |
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Term
| Contract Question 311;;Batman contracts to provide security for Gotham City for $200,000. Is the assignment enforceable if it is oral? |
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Definition
| Contract Answer 311;;No. If amount assigned is greater that $5000 it must be in writing. |
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| Contract Question 312;;Batman contracts to provide security for Gotham City for $200,000. Batman promises to assign the right to receive the $200,000 payment to Robin. Is the assignment enforceable? |
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Definition
| Contract Answer 312;;Assignment is no good. Must have language of present assignment such as "I assign" or "I hereby assign." "I will assign" is no good. This is easy to miss, so it's on the test. |
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| Contract Question 313;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to payment to Robin. Batman fails to perform the services. Can Robin still collect from Gotham City? |
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Definition
| Contract Answer 313;;No. Batman can't collect because he is in breach, so neither can Robin. Assignee steps into assignor's shoes, he has only the rights assignor would have. |
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Term
| Contract Question 314;;Batman contracts to provide security for Gotham City for $200,000. Batman assigns his right to payment to Robin. Batman performs according to the terms of the contract. Can Robin sue Gotham City if he is not paid for Batman's work? |
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Definition
| Contract Answer 314;;Yes. The assignment transferred the right to enforce the contract to Robin. That's what "assign" means. It's not about privity. |
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Term
| Contract Q315;;Batman assigns his rights to payment under the Gotham City contract to Robin. Unaware of the assignment, Gotham makes the next 2 payments to Batman. Robin then sues Gotham for the 2 payments he has not received. Who will prevail? |
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Definition
| Contract Answer 315;;Gotham. Payment by obligor to the assignor is effective unless obligor is aware of the assignment. |
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Term
| Contract Q316;;In May, Spiderman borrows $3K from Batman for $3K with interest. In Dec., Batman orally assigns his right to payment to Robin as a gift. In Jan., Batman assigns the same right of payment to PETA, his pet charity. Who gets the payment? |
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Definition
| Contract Answer 316;;PETA. With gratuitous assignments, the last gratuitous assignee in time wins because a later gift assignment revokes an earlier one. The previous gratuitous assignments are easily revoked because there was no consideration. |
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Term
| Contract Question 317;;What is the rule of multiple gratuitous assignments? |
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Definition
| Contract Answer 317;;Gratuitous assignments: the last gratuitous assignee in time wins because a later gift assignment revokes an earlier one. The previous gratuitous assignments are easily revoked because there was no consideration. |
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Term
| Contract Question 318;;What is the NY distinction on gratuitous assignments? |
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Definition
| Contract Answer 318;;In NY, a gratuitous assignment is irrevocable if it is in a writing signed by the assignor. |
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Term
| Contract Q319;;In May, Spiderman borrows $3K from Batman for $3K with interest. In a Dec. signed writing, Batman assigns his right to payment to Robin as a gift. In Jan., Batman assigns the same right of payment to PETA, his pet charity. Who gets paid? |
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Definition
| Contract Answer 319;;On MBE the writing does not matter, last in time still wins. But in NY the writing wins because as usual the writing is a substitute for consideration. |
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Term
| Contract Question 320;;What is the rule on multiple assignments for consideration? |
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Definition
| Contract Answer 320;;Assignments for consideration are much harder to revoke: the first assignee for consideration wins because assignments for consideration are much more durable in nature. Consideration revokes previous gratuitous assignments because later in time and prevents future gratuitous grants. |
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Term
| Contract Q321;;On March 1, Batman promises to assign his right to payment from Gotham City to Clooney. On April 2, Batman assigns the same right to Robin for $1. On May 3, Batman assigns the same right to Herm Edwards for $10,000. Whom should Gotham pay? |
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Definition
| Contract Answer 321;;Attempt to assign to George is ineffective since it didn't have present language. The April assignment is effective, the amount paid in consideration is irrelevant since assignments can be without consideration. It would have taken from George had that assignment been effective. The assignment to Herm is not effective because it is not the 1st in time with consideration. |
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| Contract Q322;;Batman promises to assign his right to payment from Gotham City to Clooney. Later, Batman assigns it to Robin for $1. Later, Batman assigns it to Herm for $10K, who notifies Gotham. Gotham learns of Robin's right. Whom should Gotham pay? |
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Definition
| Contract Answer 322;;Robin. First to notify is not enough. Herm must be 1st in time to receive payment from Gotham or first to receive a judgment against Gotham. |
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Term
| Contract Q323;;Batman promises to assign his right to payment from Gotham City to Clooney. Later, Batman assigns it to Robin for $1. Later, Batman assigns it to Herm for $10K. Gotham pays $200K to Robin. What are Herm's rights against Batman? |
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Definition
| Contract Answer 323;;Herm can sue Batman for breach of warranty of assignment. Herm received that warranty when he paid consideration. Robin is the first assignee for consideration, so Gotham paid him. Batman is Herm's assignor. |
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Term
| Contract Question 324;;What is the exception to the first in time rule for multiple assignments? |
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Definition
| Contract Answer 324;;Later assignee for consideration prevails if (1) they did not know, and (2) is the first to obtain payment or win a judgment against the obligor. Being the first to notify is not enough. |
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