Chapter 16. Impossibility, Commercial Impracticability, and Frustration of Purpose Answers 32 results (showing 5 best matches)
- This choice sets forth the rule of UCC § 2–615(b), i.e., upon an impossibility event which destroys only some of the supplier’s inventory, a supplier with existing contracts must allocate the remaining inventory to its contracting parties on a pro rata basis.
- a pro rata allocation to a party in the position of Gallery #1 under UCC § 2–615(b) (as explained in the previous question), the buyer need the allocation under UCC § 2–616(a). In other words, the law does not require a buyer to accept less of a good than it contracted for.
- While it is true that it is theoretically possible for Dwayne to follow through on the contract and face the legal consequences for doing so, contract law will not require a contracting party to commit an illegal act to complete performance under a contract, even if that act was legal at the time the contract was entered into.
- Misunderstanding involves parties to a contract attaching different meanings to the same term in a contract. Restatement 2d § 20. It is a defense of a contract and does not play a role here. Impossibility is a defense under a contract.
- Pro rata allocation in a situation such as described in this question is mandatory, not discretionary. UCC § 2–615(b).
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Preface 9 results (showing 5 best matches)
- This book has two purposes. The first is to give you a number of practice multiple choice questions in contract law. Once your outline is done, the best way to prepare for any exam is to take as many practice exams, and answer as any sample questions, as possible. First year courses tend to be taught by the “case law” method—studying cases, extracting rules, understanding the rationale and policies behind the decision, differentiating holdings from dicta, contrasting the dissent with the majority, etc. However, exams are based on the “problem method”—asking the student to resolve a hypothetical and come up with a solution or answer. It is one thing to know the rules; it is quite another to decide which rules apply to resolve a particular problem. Hence, preparing for exams by answering as many practice questions as possible is important because exams test a different analytical skill set than is used in class discussion. There are over 330 multiple choice questions in this book.
- . If you would put “Exam Pro MC” on the subject line, it will help me—and our school’s e-mail filter—identify the legitimacy of the inquiry.
- One concern first year students often have is how long should I spend on each of these questions? While most of the questions are ones actually given by a law school professor somewhere, the questions in this book are also designed to mimic the length and difficulty of the Contracts questions on the Multistate Bar Exam, the day long multiple choice test every would be lawyer has to take as part of his or her state’s bar exam. On the Multistate Bar Exam, the applicant is given 1 minute 48 seconds per question. Most Contracts professors are a little more generous in their time allocations due to the fact that you are a first year student, and we generally give somewhere between 2 minutes, and 2 minutes 30 seconds, per question. I would suggest that you start by giving yourself a maximum of about 3 minutes a question and then try to improve your speed to conform to the time per question that your professor generally allocates. If you can’t answer a question after about 3 minutes, both...
- , and especially the night before the exam. The Bar Review students who engaged in that kind of frequent review of their “misses” increased their scores dramatically when we gave them the exam again, and they did much better generally on the Multistate Bar Exam than students who did not heed our advice. Hence reinforcement of the rules and application missed the first go round is very important. If you have already spent the time to take the questions and review your performance, make that time count by forcing yourself to review the reasons you erred.
- The book is designed to be both comprehensive and flexible. Hence, it is arranged by subject matter into twenty-three separate chapters. This way you can focus only on the questions that are relevant to those subjects covered in your class and follow whatever path your professor takes on his or her journey through Contract law. It also allows you to skip those subjects that your class may not study, since Contracts classes vary in their coverage. However, there are questions on all the topics that are covered in any Contracts class.
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Chapter 1. Offer, Acceptance, and Mutuality Answers 82 results (showing 5 best matches)
- An option contract is a contract, the subject matter of which is the right to accept an offer in an underlying contract. Restatement 2d § 25. Here, an option contract was formed between Elizabeth and Thomas for there was an offer, acceptance, and consideration exchanged for a contract the subject matter of which was the right to accept an offer in the underlying puppy sale contract.
- This would be the measure of Francis French–Fry’s recovery under a quasi-contract theory, which is sometimes called an implied-in- contract. Implied-in-fact contracts are different from implied-in-law or quasi contracts. This fact pattern involved a true contract that was based on Barry’s intent to enter into the contract inferred from his conduct. Quasi contracts are not contracts at all, but rather situations in which contract law implies an obligation.
- (A) correctly states the result under the objective theory of contracts. The objective theory of contracts provides that there is a contract where a reasonable person in the position of the party who seeks to enforce the contract would conclude that a contract had been formed. Here, the parties negotiated the price, the price was fair market value, they wrote the contract down and signed it, added Dean’s wife, and decided when payment would be made. Because it would seem to Dean that a contract had been formed, this would likely be enough.
- (C) is correct because under Restatement 2d § 45, beginning performance in response to an unambiguous offer to enter into a unilateral contract creates a unilateral option contract exercisable by the offeree. Here, Alex began performance by beginning to work on the roof. This created a unilateral option contract. Owner’s offer became irrevocable for a reasonable period of time which would allow Alex to finish; but the option contract is unilateral only, meaning that Alex could walk off the job without consequence.
- Here, Manufacturer made an accommodation shipment. That is, it made a counteroffer and did not simultaneously accept the offer and breach the contract under UCC § 2–206. Retailer rejected the counter-offer when it sent the semi-widgets back. Hence there was never a contract between them and, while Retailer is entitled to reject the counteroffer, it has no right to sue Manufacturer for breach of contract.
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Chapter 22. Applicability of Article 2 of the UCC Answers 22 results (showing 5 best matches)
- Sometimes there is no gap between the time of contracting and the time of identification to the contract. For example, if a buyer contracts to buy a car on the lot, the particular car that is the subject of the contract is “identified” at the time the contract is made.
- A “future good” is a good which is not identified to the contract at the time it was made. UCC § 2–501(1)(b). That is, suppose a buyer purchases an iPod from the Apple Store. At the time of purchase, the sales representative has to go in the back and get an iPod in a box to fulfill the order. At the time of contracting, since no one knows which particular box will be given to the buyer, the iPod is a “future good.” Once the sales representative picks the iPod box, it is thereafter “identified” to the contract, meaning that it is the particular good which is to be sold under the contract.
- However, both contracts for identified goods and contracts for future goods are governed by Article 2 of the UCC. UCC § 2–501.
- Sometimes, as is the case here, the particular good that will be given to the buyer is not identified at the time of the making of the contract, but will be identified later. This is known as a contract for the sale of “future goods.” UCC § 2–501(1)(b).
- Here, the contract called for both services and goods, the installation (service) and the dishwasher itself (goods). It appears Buyer’s purpose is to get a dishwasher, i.e., the purchase of the goods, while the installation is secondary (and costs less than the good itself). Thus, Article 2 will govern the entire contract.
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Chapter 8. Duress Answers 26 results (showing 5 best matches)
- Penelope may avoid the contract because a threat of criminal prosecution is an improper threat under contract law. Restatement 2d § 176(1)(b). Penelope may avoid the contract whether or not she embezzled the money because the issue here is that Penelope did not enter the agreement to “repay” the money of her own free will and voluntary decision making. When a contract is formed under duress, freedom of contract is put at risk because the party entering into the contract does not have free choice and the ability to voluntarily make a decision. Thus, these contracts are unenforceable.
- Again, the contract is only voidable by Parker, so if she wants to do the job and enforce the contract, she can. The point is she does not have to go through with the contract because the threat that was used to induce her agreement was “improper” under contract law. Restatement 2d § 176(c).
- If a party is compelled to enter into a contract by use of physical force, the contract is void. Restatement 2d § 174. This means there is no agreement and neither party can enforce the terms of the agreement. Thus, because Phyllis entered into the contract because David threatened to stab her, this contract is void, not voidable.
- In our legal system, contracts are enforced when they are freely and voluntarily entered into by those with capacity to do so. When one party is under duress caused by some sort of threat, however, the freedom to contract is imperiled. This chapter contains problems that demonstrate when duress will provide a defense to a party who does not perform. Contract law provides that duress is a defense to formation, meaning that when its elements are met, the contract is voidable (in most instances) under Restatement 2d § 175 or void (in a few cases) under Restatement 2d § 174.
- This question deals with a situation in which the resulting deal was fair, i.e., the contract was to sell the tickets for face and market value. Under the Restatement 2d § 176(1), a threat made to induce a party to enter a contract where the terms of the contract are fair is “improper,” thus making the agreement voidable, if:
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Chapter 17. Third Party Beneficiary Contracts Answers 35 results (showing 5 best matches)
- The main distinction between an assignment and a third party beneficiary situation is that in the latter, only one contract is involved (i.e., at the time of the making of the third-party beneficiary contract, an intended beneficiary gains rights). In an assignment, there are two contracts: the original agreement, followed by a second contract in which contractual rights obtained under the first agreement are assigned to a third party.
- In the vernacular of contract law, Sister, as the beneficiary, “stands in the shoes” of the promisee (Brother) and is subject to any defenses the promisor (Buyer) could assert in a breach of contract lawsuit brought by the promisee (Brother). In the words of Restatement 2d § 309(1), Sister is “ ” in the Buyer–Seller contract. Under contract law, a contract is voidable and subject to rescission even if a misrepresentation was innocent, so long as it was material. Restatement 2d § 164(1). Thus, Buyer may apply the defense of misrepresentation in a suit by Sister because he could assert that same defense in a breach of contract suit brought against him by Brother for non-payment.
- As explained in the answer to the previous question and in the explanation of (A) above, Bill (the donee-like intended beneficiary) has no rights to sue Jane (the promisee) under the third party beneficiary contract because Jane simply made a gift promise to Bill of the proceeds from the sale of the necklace. It is possible that Jane could be liable for a tort like interference with contract. However, the problem limits the question to considerations of “breach of the Jane–Star contract only.”
- To be a creditor-like intended beneficiary, “the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary.” Restatement 2d § 302(1)(a). Here, the Jane–Star contract was entered into to satisfy a pre-existing (i.e., existing before the third party beneficiary contract came into existence) obligation of the promisee (Jane) to pay money to the beneficiary (Bill).
- Bill is entitled to sue Star for $30,000 because he is an intended beneficiary of a third party beneficiary contract, and Star is a promisor in that contract who failed to perform. The rule is that an intended beneficiary is entitled to sue the promisor for breach. Restatement 2d § 304.
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Chapter 11. Unconsionability Answers 8 results (showing 5 best matches)
- at the time the parties enter into the contract
- (A) and (B) are incorrect for the reason (C) is correct. The terms of the contract are looked at as of the time of making the contract. Therefore, this contract may not be disaffirmed based on unconscionability now, even though there is an unfair interest term presently, because the interest term was fair at the time of making the contract.
- Under UCC § 2–302(1) and Restatement 2d § 208, if a court finds a contract is unconscionable the court may: (1) refuse to enforce the entire contract, (2) enforce the remainder of the contract without the unconscionable clause or clauses, or (3) modify or limit application of any clause to avoid an unjust result. Therefore, (D) is correct.
- Note that the unconscionability doctrine is thus an exception to the general rule that courts “interpret” contracts, rather than getting involved in rewriting them. Under the doctrine of unconscionability, a court is authorized to change the parties’ duties and rewrite a contract to remove any unconscionable clauses or alter the effect of any unconscionable clauses.
- (B), (C), and (D) are incorrect for the reason (A) is correct. A conclusion that a clause of a contract, or the entire contract itself, is unconscionable requires a finding of
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Chapter 5. Statute of Frauds Answers 46 results (showing 5 best matches)
- The equal dignities rule provides that if a contract must be in writing in order to satisfy the Statute of Frauds, then the authority of an agent to enter into such a contract must also be in writing. Although Seller’s agency contract with Agent was in writing, as pointed out in the explanation for (D), the agency contract between Buyer and Broker was oral and thus would not satisfy the Statute.
- (A) is incorrect because there is no “factually unlikely” doctrine that alters the “impossible to complete within a year” rule of Restatement 2d § 130. As an exam note, watch out when professors put phrases in quotes. Sometimes, of course, they do so because that is the right answer. But often it serves as a distracter, misleading the student to choose the wrong answer because it “sounds legal.”
- At the time of its making, the oral contract would not be enforceable because Buyer’s obligations cannot be fully completed within a year from the making of the contract. Restatement 2d § 130. However, where one party has completely performed his or her obligations under a contract, the Statute satisfied. UCC § 2–201(3)(c). That provision states that a contract is enforceable “with respect to goods for which … have been received and accepted.”
- Here, once Seller fully performed, the Statute would be satisfied and Seller would be able to enforce the contract for the full amount of the contract price. Once again, the idea is that if one party has completely performed—delivering firewood to another—there is enough for a court to believe that the testimony of the oral contract rests on a real transaction as set forth in UCC § 2–201, Cmt, 1. Thus, once goods are accepted and it seems as if a contract has been formed, there is more of a chance the buyer will get away with fraud if the Statute applies and no evidence of the making of the contract is admitted, than if the Seller is allowed to explain what the transaction was.
- Contracts which cannot be completely performed within a year are said to be “within the Statute of Frauds (the “Statute” or “SOF”) Restatement 2d § 130, meaning they must be in writing, signed by “the party to be charged” and have all essential terms set forth in the writing to be enforceable. Restatement 2d § 131. To be within the Statute, however, it must truly be factually under the terms of the contract itself for the agreement to be completed within a year of its making. For example, a contract calling for someone to begin working as a teacher six months from now, with the contract to run for a nine-month school year, cannot be completed within a year of its making, and thus is unenforceable unless in writing under Restatement 2d § 130 (unless some other exception applies).
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Chapter 2. Ucc § 2–207 Answers 53 results (showing 5 best matches)
- The way UCC § 2–207 is structured is that if there is no contract formed by the exchange of forms under UCC § 2–207(1), the only way a contract thereafter be formed is by conduct. As provided in UCC § 2–207(3), “Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.” Here, Seller sent the laptops and Buyer accepted them. As such their actions established a contract.
- Once a contract is found based on the exchange of the writings under UCC § 2–207(1), analysis goes to UCC § 2–207(2) to determine what terms are part of that contract. Under UCC § 2–207(2), if the contract is between merchants, any additional terms in the acceptance become part of the contract become part of the contract occurs when “notification of objection to them … is given within a reasonable time after notice of them is received.”
- The next step is to determine what terms became part of that contract. When a contract is formed by exchange of forms under UCC § 2–207(1), the terms of the agreement are determined under UCC § 2–207(2). Under UCC § 2–207(2)(a), the different term of the acceptance does not become a part of the contract if the offeror included a clause in his or her form limiting acceptance to the terms of the offer, which occurred here. Thus, the terms of the contract were those in Contractor’s Purchase Order, which called for stainable quality windows. Since that’s not what Contractor was sent, Supplier breached.
- (D) is incorrect because it does not matter whether Seller ships 500 pounds of bananas, Buyer would have no duty to accept the bananas because Buyer and Seller are not in a contract. If Seller shipped the bananas and Buyer accepted, however, the two would be in a contract based on their actions, but the sending of the bananas, by itself, does not make a contract.
- (D) is incorrect because, while the arbitration clause would also not become part of the contract if the court found it materially alters the contract under UCC § 2–207(2)(b), the clause also does not become part of the contract because Buyer objected to it, pursuant to UCC § 2–207(2)(c).
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Chapter 20. Remedies Answers 100 results (showing 5 best matches)
- Generally a court will not issue an order requiring a contract for personal services to be specifically performed. Restatement 2d § 367. The contract involved in this question is a personal services contract because its performance depends upon a particular person’s skills, character, training, and talents, i.e. it matters more is actually performing the contract rather than performing has been contracted for. Restatement 2d § 318.
- (A) incorrectly assumes Contractor would be entitled to the amount of the whole contract price at which other contractors would have bid the job. What other contractors would have charged is not relevant to reliance damages suffered by the innocent party. As explained in (B), the relevant amount is what the contracting party spent under the breached contract.
- Breaches under contract law are “strict liability” events. It does not matter that a party was reasonable or not. The only question is whether one contracting party failed to do what it promised and has thus breached the contract.
- In breach of contract cases, typically emotional distress damages are not recoverable. Restatement 2d §353. This reasoning is partially from a desire to separate tort and contract law and to leave personal injuries and their attendant emotional distress to be settled as part of a tort claim. It is also because contract law is more commercial in nature, and contract law does not want recovery from a breach to exceed the
- While future contracts may be subject to the equitable remedy of specific performance, it is still not the preferred choice of remedy. Although it is possible to impose specific performance in future contracts, courts will typically only do so if it is shown that money damages would not adequately compensate the innocent party for the breach.
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Chapter 14. Conditions and Breach Answers 90 results (showing 5 best matches)
- However, though the restaurant may want to cancel the contract and hire a more reliable supplier given the problems with the very first shipment, it may not do so at this time. Under UCC § 2–612(3), a buyer may declare a material breach of the whole contract and cancel the remainder only when the failure of tender in a particular shipment or shipments “substantially impairs the value of the contract.” Further, UCC § 2–612, Cmt. 6 provides that an uncertainty as to completeness of future performance based on a seller’s past shipments is not enough, in and of itself, to justify cancellation of the entire contract. It is rare that an imperfect tender in the first shipment of an installment contract can substantially impair the value of the whole contract as called for in UCC § 2–612(3). Therefore, because only the first shipment of a three-year monthly contract was imperfectly tendered, it is unlikely that the restaurant may cancel the entire contract at this time.
- contract, as needed to cancel the remainder of the contract under UCC § 2–612(3). That is, because only the first shipment in the three-year monthly contract was imperfectly tendered, the restaurant may not cancel the entire contract at this time. UCC § 2–612, Cmt. 6.
- (B) is correct because installment contracts, where goods are to be delivered in more than one shipment under the contract, are treated differently under the UCC than are single lot contracts. As described in the answer to the previous question, single lot contracts are governed by the perfect tender rule. UCC § 2–601. However, installment contracts (which applies here because the headbands were to be delivered in two shipments), are governed by UCC § 2–612. Under that provision, a buyer may reject a particular shipment due to a non-conforming tender only if the non-conformity substantially impairs the value of that shipment, and either the non-conformity cannot be cured, or the seller refuses to
- (C) is incorrect because under UCC § 2–612(3), a buyer may cancel the entire installment contract only if the cumulative impact of the imperfect tender in the various shipments “substantially impairs the value of the whole contract.” Here, the problem provides that the 249 headbands in the first shipment did not even substantially impair the value of , let alone the value of the contract . Therefore, Buyer was not entitled to cancel the entire contract, despite Seller’s breach.
- This choice sets forth the rule in installment contracts where a buyer may reject any installment whose nonconformity substantially impairs its value, if the conformity cannot be cured. UCC § 2–612. However, even under this rule, if the seller gives adequate assurances of cure, the installment must be accepted as long as the nonconforming installment does not substantially impair the value of the entire contract. This is irrelevant, though, because this contract is a single lot contract because the motorcycle would be delivered at one time, and the missing GPS device can be cured.
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Chapter 9. Undue Influence 4 results
- If a party to a contract is induced into the contract by means of undue influence from a , who is not a party to the contract, that contract is:
- May Paula avoid this contract?
- (A) No, if a court finds that she understood the terms of the contract.
- (A) Enforceable, so long as the other contracting party has not engaged in unfair persuasion.
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Chapter 10. Fraud & Misrepresentation Answers 29 results (showing 5 best matches)
- When a party misrepresents the very nature of the contract itself, there is . In such a situation, the contract is void and never enforceable. Restatement 2d § 163. This differs from where there is just misrepresentation in inducement to enter the contract where the contract is then voidable by the innocent party. Here, Paul represented that what Dwayne was signing was just an autograph for a fan; Dwayne had no idea it was any form of contract. As such it was fraud
- Identifying the mental state can be important to ascertain whether misrepresentation can be asserted in a breach of contract case. Under Restatement 2d § 164, misrepresentation can be alleged successfully in a breach of contract action if the following can be established:
- One of the big differences between using misrepresentation in tort and contract is that in tort, the innocent party is entitled to money damages. In contract, it only acts to allow the innocent party to avoid the transaction. Restatement 2d § 164.
- A contract entered into because of misrepresentation is voidable, not void, meaning the innocent party can choose to go forward with the transaction if he or she wishes to do so. (Note that, as explained in Question 2 below, where there has been “fraud ” and not “fraud in the inducement,” the contract is
- It was not because Patricia knew she was entering into a contract for painting. She was induced to enter that contract because of Drew’s misrepresentation regarding the quality and speed of his work.
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About the Author 2 results
- Clinical Professor Robert Brain is an Honors Graduate of Stanford University in Biology, has an M.S. in biochemistry from Stanford, and was awarded his law degree from the University of California, Boalt Hall School of Law. He began his legal career in the litigation department of Gibson, Dunn & Crutcher, where he received a pro bono award from the Los Angeles County Bar Association for his work with Public Counsel, and represented the ACLU in a case before the U.S. Supreme Court. He later joined the faculty at Pepperdine University School of Law where he taught Contracts, Torts, Constitutional Law, Sales and Trial Practice. While at Pepperdine, he co-taught a course on the History of the Supreme Court with Chief Justice Rehnquist, tried cases on a volunteer basis for the Los Angeles District Attorney’s Office and served as a commercial arbitrator for the American Arbitration Association.
- ...Professor at McGeorge School of Law before becoming a partner at the litigation firm of Howarth & Smith where he tried fraud, defamation, securities, products liability and assault matters, representing clients like the Republic of the Marshall Islands, Suzuki Motor Corporation and the victims of 9/11. He joined the faculty at Loyola Law School, Los Angeles in 2006 and has taught Contracts, Sales, Ethical Lawyering and Legal Research and Writing at Loyola. He has published three books on Contact Law, and is the coauthor of the only casebook on Video Game Law in the United States. He has published articles on commercial law, video game law, and evidence and was a regular columnist for the Los Angeles Daily Journal. He has been elected to the Executive Board of the Teaching Methods Section and the Legal Wiring, Reasoning, and Research Section of the American Association of Law Schools and is a sought after lecturer on subjects as diverse as legal writing, video game law, legal...
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Chapter 6. Capacity Answers 37 results (showing 5 best matches)
- The ability of a minor to disaffirm the contract does not last forever. It lasts throughout the period of minority, but once the minor turns eighteen, things begin to change. If the buyer takes some sort of act (or even some sort of inaction) which indicates that the former minor wants to continue with the contract as an adult, then the contract will thereafter be enforceable. The process by which the new adult indicates he or she wishes to continue with the contract is known as “ratification.”
- If a guardian has been appointed for an individual due to a mental illness, Restatement 2d § 13 provides that the individual has no capacity to contract and any contract entered into by the individual under guardianship is voidable by the guardian. However, the general rule regarding the requirement of the person subject to a guardianship to pay restitution is that restitution is required for the use of the good or service by such an individual if either: (a) the contract was for “necessities,” or (b) the non-incapacitated person neither knew or should have known of the individual’s incapacity at the time of contracting. Applied here, the facts indicate that the salesperson was unaware of Ben’s incapacity, and thus restitution would be due for Ben’s usage of the television (including depreciation), but the contract itself would be voidable.
- In order to enter into an enforceable contract, a party must have sufficient judgment to decide whether to bind himself or herself to an enforceable promise. Restatement 2d § 12(1). As it relates to age, the rule is that until a person reaches the age of majority (in all states, eighteen years of age), any contract entered into by that person is voidable at the option of the minor. Restatement 2d §§ 12(2)(b), 14. (Although note that Restatement 2d § 14 provides that the last day on which the contract is freely voidable is “the beginning of the day before the person’s eighteenth birthday.”)
- Choice (A) describes the process of “express” ratification. That is, Teresa’s statement, “I will continue to pay for the car,” was an express affirmation of her desire to continue with the contract, and such ratification made the contract enforceable from that point forward.
- Choice (C) describes the most commonly used form of ratification: ratification by silence and inaction. The rule is that a minor is given a reasonable time to disaffirm the contract after reaching the age of majority, and if the contract is not disaffirmed within that reasonable time, ratification will be implied. While facts of a contract are important to determine what is a reasonable time, in general, the more benefits the minor has received under the contract, the less amount of time will be
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Chapter 21. Discharge by Subsequent Agreement Answers 28 results (showing 5 best matches)
- Finally, note that a substituted performance has similarities to, and differences from, an accord and satisfaction situation. The similarities are that under both, the parties agree to discharge their obligations under the first contract only if the second contract is actually performed. But in an accord situation: (1) the second contract can be formed by promise, and need not be unilateral; and (2) if the second agreement is breached, the creditor can sue for either breach of the first or of the second contract. Restatement 2d § 281.
- A substituted contract is a transaction in which a party owing a duty under a contract discharges it by a different performance than that originally called for under the contract. Restatement 2d § 279. A substituted contract is itself a separate bilateral contract, and thus must be formed by a separate offer, acceptance and consideration to be
- This question tests knowledge of a special type of “substituted contract” known as a “novation.” A novation occurs when a new contract is entered into in which the duties under the original contract are discharged because one party has agreed to accept the promised performance by a third party in its stead. Restatement 2d § 280. Upon the making of the second agreement, the duties under the first are discharged and thus if the third party does not perform the second agreement, the only remedy for the original contracting party is to sue the third party for breach of the second agreement. Restatement 2d § 279(2).
- Note that the reason for this rule is that the risk of entering into a fixed price contract is that the work will cost more than anticipated at the time of the making of the agreement. Gil bears that risk—of course Gil gets the benefit if the work costs less than he anticipated. Also, if circumstances changed from the start of the contract, contract law might allow the subsequent agreement to be enforced and replace the original one. Restatement 2d § 89(a). But none of those theories can be factually supported, making Choice (C) the correct answer.
- The modification of a service contract need not be in writing even if the original was in writing as long as the contract, as modified, is not within the Statute of Frauds. If the promise were otherwise enforceable, it wouldn’t be rendered unenforceable simply because it was oral.
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Chapter 15. Anticipatory Repudiation Answers 26 results (showing 5 best matches)
- When a good faith difference of opinion as to the meaning of the contract exists, a party will not have anticipatorily repudiated because he or she denies the duty existed. Dave was not refusing to perform an undisputed duty under the contract; rather he was honestly disputing whether there a duty to paint the guest house under the contract.
- It wasn’t until the 1850s before contract law had a remedy for the innocent party when the other party indicated he or she would breach a contract in the future. The doctrine of anticipatory repudiation was ushered in by
- Now, when one party unambiguously tells the other that he or she will not be performing under a contract with executory (unperformed) duties of both parties remaining under the contract, the innocent party can immediately bring suit for anticipatory repudiation. Restatement 2d § 253(1); UCC § 2–610.
- Where, as here, there is not a bilateral contract with unperformed duties , no anticipatory repudiation claim can be established, no matter how unequivocal the repudiation of the “breaching” party. In such a case, the innocent party must wait until performance was due to sue for breach of contract.
- entering into the contract, Seller could not legitimately demand reasonable assurances of performance. That is because a demand for reasonable assurance can only legitimately be based on facts or rumors learned the contract had been made. UCC § 2–609.
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Chapter 18. Assignments Answers 17 results (showing 5 best matches)
- A third party becomes a beneficiary under a third party beneficiary contract when that party receives the right to performance at the time the first and only contract was entered into. In other words, if
- But because Tom and Sandy entered into the contract first, and , Tom told Sandy to pay the $800 to Liz, it is an assignment situation. In other words, in a third party beneficiary situation, there is only one contract, and a third party obtains rights in its performance at its formation. In an assignment situation, there are two agreements—the original one between the assignor and obligor; and a second one, formed later, in which the assignor’s rights under the first contract are transferred to the assignee.
- Note that if Paul wanted to accept the assignment, he certainly could waive any protections provided for him by contract law and if he were willing to clean the mansion for $300, nothing would prevent him from doing so and agreeing to a modification of the original contract. Nevertheless, the purported assignment of the right would still itself be invalid.
- First, courts interpret anti-assignment clauses as prohibiting only delegations, unless the circumstances indicate otherwise. Restatement 2d § 322(1). Second, courts interpret anti-assignment clauses as benefiting the obligor, so the obligor can waive the protection. Restatement 2d § 322(2)(c). And finally, and most relevant to this question, courts tend to interpret anti-assignment clauses as a promise, not a condition. Therefore, if there is an assignment under a contract with a no assignment clause, the assignment is still valid, but the assignor is liable to the obligor for breach of contract. Restatement 2d § 322(2)(b).
- (A) is incorrect because Liz was not a third party beneficiary. This is because the contract between Tom and Sandy
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Chapter 13. Parol Evidence Rule and Interpretation 29 results (showing 5 best matches)
- The parties to this contract hereby affirm that this writing expresses the final, complete and exclusive statement of the terms of their agreement. There are no inducements to enter this contract other than those appearing in this document, and all prior agreements, written or oral, are discharged and/or merged into this contract.
- Buyer and Seller are parties to a contract calling for delivery of goods on “June 1.” This is the sixth contract between Buyer and Seller that dealt with the same subject matter over the years. In each of the six previous contracts, delivery was supposed to be on “the first” of the month under the express terms of the contract, but in each case, Seller made the deliveries on the tenth of the month in question. In all cases, such deliveries were accepted and paid for without complaint by the Seller.
- In an action by Buyer for breach of contract in which the
- Gordon Jeffrey executed a written agreement with Fordham Motorsports in which Fordham agreed to build a NASCAR racing car for Gordon according to plans and specifications to be developed by Fordham and incorporated into the written contract. The contract stated that Fordham was to receive $175,000 upon delivery of the completed car, in racing condition, to Gordon.
- Prior to signing the contract, Gordon and Fordham orally agreed that the written contract would have no effect until and unless the plans and specifications for the race car were approved by Penske Engineering, a leading engineering company. There was nothing in the written Gordon–Fordham agreement regarding Penske’s involvement in the deal.
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Chapter 12. “Illegality” And Contracts Unenforceable On Grounds Of Public Policy Answers 23 results (showing 5 best matches)
- When an agreement calls for one of the parties to commit a criminal act, it is unenforceable due to public policy. Restatement 2d § 178. In other words, when the contract calls for acts that are illegal, it is unenforceable by either party and void. Contract law has determined enforcement of the performance duties under these types of contracts is outweighed by public policy against the prohibited acts.
- In agreements where a party should be licensed, but is not, whether the contract is enforceable depends on the purpose of the licensing requirement. Restatement 2d § 178. If the purpose of the licensing requirement is for a government agency to control the skill and moral quality of those participating in the occupation, such as for lawyers and doctors, the lack of a license makes the contract unenforceable. On the other hand, when the licensing requirement is primarily a revenue raising measure, the lack of a license will not make the contract unenforceable under contract law.
- When a statute makes a type of contract illegal for the protection of a particular class of persons, a party within that class has the option of avoiding or enforcing the contract. In these situations the contract is voidable, not void, by the party protected by the statute. Restatement 2d § 178.
- Another example of an “illegal” contract is one that is procured by a bribe, even if the bribe was actually paid by a third party—here Dan. As an illegal contract, it is unenforceable and void. Restatement 2d § 178.
- The contract is not enforceable because it is an illegal contract procured by a bribe. Hence it is unenforceable by either party, and Peter is not entitled to recovery for its breach under any theory.
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Chapter 20. Remedies 86 results (showing 5 best matches)
- Buyer contracts with Seller for the purchase of helium gas on an annual basis. The contract ran for ten years, but provided, “Buyer’s obligations under this contract are either: (a) to purchase $200,000 worth of helium each calendar year under this agreement; or (b) pay Seller $45,000 on December 31 of the first year it does not order $200,000 worth of helium.”
- Andrew is a famous actor in Hollywood and contracts with Producer to give Producer his exclusive services for the next four months to film a new movie. Andrew was to be the featured star of the film. Just a few days after signing that contract, Andrew signs a contract to make another movie during part of the four-month period. In order to do both, he will have to divert much of his attention from Producer’s movie to the new project.
- John’s employment contract contained a covenant not to complete, providing that after leaving SDO, he may not practice dentistry on the West Coast for eighteen months. The contract was freely negotiated and John knowingly and voluntarily entered the agreement.
- Seller owns a very successful sandwich shop in Town. He contracted to sell the shop to Buyer. A large part of what the Buyer purchased was the reputation, success and goodwill of Seller’s shop. In order to protect the customer base the shop has, the contract contained a covenant not to compete where Seller could never open another sandwich shop in Town or in any area within ten miles of Town.
- Dawn’s Publishing makes a contract with Pattie to publish a novel she is writing. This is Pattie’s first published book and Dawn’s is paying her exclusively on a royalty basis under the contract, i.e., she will only be paid a percentage of each book sold.
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Chapter 19. Delegations Answers 25 results (showing 5 best matches)
- The applicable rule is set forth in Restatement 2d § 328(1): “[A]n ‘assignment of the contract’ … is an assignment of the assignor’s rights and a delegation of his unperformed duties under the contract.”. Hence, when Tom’s “assigned the contract” to Super Vacations, it acted as both an assignment of its rights under Brett’s contract and a delegation of its duties under that agreement. Hence, because of the delegation, Super Vacations now has the duty to book Brett on a round trip charter flight to Prague and a week at the Hilton. On the other hand, due to the assignment of the rights under that contract, Super Vacation also now has the right to collect the $1,400 from Brett.
- This contract concerns the right of an individual, but it is not a “personal services” contract within the meaning of that term under assignment and delegation law. On the delegation part of this transaction, a “personal services” contract means a contract in which the obligee (Brett) has a “substantial interest” in seeing that the party with whom he has contracted is the party who performs the contract, e.g., if a studio books Jack Nicholson for a movie, Jack cannot delegate his duty to act in the movie to Jane Seymour because the studio has a “substantial interest” in having Jack perform the role. Restatement 2d § 318(2). There are no facts which suggest that Brett has any “substantial interest” in having Tom’s, as opposed to Super Vacations, book a plane flight and a hotel reservation or that Tom’s was in any way
- Absent evidence to the contrary, when a party “assigns the contract” or “all their rights under the contract” to another party, it acts as both an assignment of rights and a delegation of duties under the existing contract. Restatement 2d § 328; UCC § 2–210(4). Since Ted’s has assigned its contract to Sport’s, it would have both assigned the right to receive the $1,000 payment from Paul, and delegated the obligation to secure Paul’s tickets. Further, there is no reason based on the facts as to why either the assignment or the delegation would be ineffective or prohibited.
- When a party uses language such as “assigns the contract” or “all their rights under the contract,” this demonstrates the parties’ intent to both assign the rights and delegate the duties under the contract unless evidence to the contrary is shown.
- Similarly, with regard to the assignment part of the transaction, the rule against assigning a “personal services” contract means an assignment will not be allowed where Brett’s chances of getting what he contracted for will be “materially impaired” if Super Vacations is given the task to book the vacation versus Brett’s chances of getting the vacation he contracted for if Tom’s does the booking. Restatement 2d § 317(2)(a). There is no evidence that such is the case on these facts.
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Chapter 14. Conditions and Breach 63 results (showing 5 best matches)
- Buyer and Seller entered into a written contract on November 1 in which Seller agreed to sell her car to Buyer for $10,000. The contract provides that on November 1, Seller was to deliver the title and Buyer was to pay the money. On November 1, Seller fails to deliver or tender title to the car. Buyer immediately sues Seller for breach of contract.
- (C) Morris materially breached the contract because the brand of gunite desired by Linda was specifically bargained for and mentioned in the contract.
- On June 1 Mary signed a written contract to purchase John’s boat for $25,000. The contract had a clause providing, “Mary’s payment obligations are contingent on her obtaining a loan from First Bank by June 30 for at least $20,000 of the purchase price, using the boat as collateral.” However, there was no provision in the contract requiring Mary to go to First Bank and try to get a loan.
- (A) Buyer was entitled to reject the motorcycle and cancel the contract under the perfect tender rule, and Seller has no recourse to make the contract enforceable thereafter.
- (C) The retailer has an absolute right to reject the mp3 players and cancel the contract, because the time for performance under the contract has expired.
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Chapter 10. Fraud & Misrepresentation 32 results (showing 5 best matches)
- Shortly after contracting with Drew, Patricia went online and found out the truth about Drew’s painting skills. She tells Drew she no longer wants his services. Drew says okay, but sues her for breach of contract, seeking the profits he would have made under the contract.
- After signing the contract, Buyer sampled another company’s grape jelly, and believed it to be much better than Seller’s. Buyer felt that Seller had deceived him and refuses to go forward with the contract to purchase the twenty cases of Seller’s jelly, saying the contract is voidable on misrepresentation grounds.
- Reporter made an offer to purchase the land from Businessman for $40,000. Businessman asked, “Why do you want to buy it? Is that interstate thing actually going to happen?” Reporter answered “Look, do you want to sell it or not.” Businessman agreed and a contract was signed. Businessman later found out about the interstate and refused to go through with the deal, claiming the contract was voidable because of misrepresentation.
- Paula contracted to purchase the land for $100,000, a fair price for fifty acres, but 20% too much for a forty acre plot. After the sale, Paula discovered the land was actually only forty acres and has brought suit.
- I. The contract is voidable by Debbie.
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Chapter 13. Parol Evidence Rule And Interpretation Answers 24 results (showing 5 best matches)
- the contract is made (these are “modifications” to the contract and the parol evidence rule has no effect on the admissibility of alleged oral modifications.) In other words, the parol evidence rule only regulates agreements made prior to, or contemporaneous with, the signing of the contract;
- (7) Situations in which usage of trade, course of dealing, or course of performance is used to explain the contract UCC § 2–202. Note that this is an explicit rule under the UCC, but is considered by most contract scholars to be true in contracts governed by common law and Restatement rules as well.
- Here, the oral agreement to have Penske’s approval before the contract went forward is a condition precedent to performance under the contract. Thus, the parol evidence rule would not prevent admission of evidence of the oral agreement. Restatement 2d § 217.
- One test is the so-called “Williston” or “plain meaning” rule. That rule provides that if the terms of the agreement have a plain meaning, and can be effectively interpreted without reference to any extrinsic evidence, no such parol evidence as to the meaning of a term should be admitted. In other words, the evidence as to a meaning of a term in a written contract should only be allowed if the term in the contract is ambiguous.
- You might ask, how could a term that the parties agreed to “might naturally be omitted” from the final written contract? Well, it is rare, but suppose the final written contract in this case was taken from the internet and had a few blanks in it for the address, price, etc., but nothing for unusual agreements, like removal of a shed. It only dealt with things like providing good title, paying with a cashier’s check, etc. Alternatively, suppose the parties were friends and did not feel like they had to “document everything.” In such a case, a clause calling for the removal of the shed “might naturally be omitted” from the final contract. If that is the case, then the Shed Agreement would be deemed a “consistent additional term” and Buyer would be permitted to testify about it to the jury. It would then be up to the jury to decide whether he is believable or not.
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Chapter 4. Consideration and Promissory Estoppel 14 results (showing 5 best matches)
- In an action to enforce the promise, who will prevail? (For purposes of this question, ignore any issues regarding the capacity of a teenager to contract and assume that Paul could enter into a contract in the relevant jurisdiction, and otherwise assume Restatement 2d of Contracts rules apply).
- Assume that Carl’s in good faith ordered the stated estimate of 200 pounds instead of the 1,000 in the pertinent month. Sammy’s states that it is no longer going to deliver any scrap under the contract because, while it was making a few cents a pound when the contract started, it is
- Sammy’s Scrap Heap entered into a written contract with Carl’s Car Parts under which Sammy’s would supply, and Carl’s would buy, all of the excess scrap metal that Carl’s required from Sammy’s. Sammy’s obtained its supply of scrap from old cars that were donated or that it bought from the city impound. Carl’s ordinarily needed 200 pounds of scrap every month, and that quantity was put in the contract as a good faith monthly estimate that Sammy’s would be required to furnish.
- Tony’s Trucking agreed to transport lumber from Larry’s forest property in Oregon to Larry’s lumber yard in Northern California. The price was fixed at $1,000 per truckload and the contract was for a four year term. Three years into the agreement, the price of gasoline unexpectedly and suddenly rose from $3.10 per gallon (the gas price at the start of the contract) to $4.50 per gallon. As a result of the increase, Tony is now losing money on each delivery.
- In an action for breach of contract, who will prevail?
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Chapter 3. Indefiniteness and Gap Fillers Answers 30 results (showing 5 best matches)
- Although the contract may well be too indefinite, on its face, to be enforced due to the ambiguity concerning which home is covered under the agreement, contract law has developed rules which help make indefinite contracts enforceable. One of these rules provides that an ambiguity in an agreement can be removed through part performance. Restatement 2d § 34(2). Part performance removes the uncertainty and establishes “that a contract enforceable as a bargain has been formed.” Restatement 2d § 34(2). Here, when Mrs. Smith allowed Paul to landscape the Huntington Beach property, that part performance removed the uncertainty as to the location for Paul to perform his landscaping duties under the agreement, and Paul would be entitled to the full $150 contract price.
- (B) erroneously assumes that the lack of a writing would make the contract unenforceable. But the Statute of Frauds would not be an issue with this problem as it does not fall within those instances specified in Restatement 2d § 110. So the contract is enforceable and, as such, Paul can recover for the contract price of $150.
- (C) is correct in stating that the contract is enforceable, but gives the wrong reason for it being so. The contract, on its face, is likely not sufficiently definite to be enforces, and it is the part performance of Paul landscaping the Huntington Beach home that removes the uncertainty that makes the contract enforceable. Restatement 2d § 34(2).
- Under a strict application of the common law indefiniteness doctrine, Priscilla would prevail because the agreement would be unenforceable because: (1) the court cannot tell when construction is due, so it cannot tell whether the contract has been breached; (2) even if the court could tell that the contract has been breached, it cannot fashion an appropriate remedy, for it is impossible to tell on what date damages began to run; and (3) to make the contract definite, the court would have to rewrite the contract and insert a construction date, something courts, at common law at least, were generally unwilling to do. Also, (4) there would be suspicion that the parties were still negotiating.
- However, modern contract law has relaxed the indefiniteness rule, but not eliminated it. Under both the Restatement 2d and the UCC, a contract will still fail for indefiniteness if the court cannot find a reasonably certain basis to determine the existence of a breach or fashion an appropriate remedy. Restatement 2d § 33(2); UCC § 2–204(3). However, modern contract law has relaxed the indefiniteness rule by applying it differently and by granting a court the authority to insert certain terms into the agreement when the parties have failed to do so. It has done so in two ways.
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Chapter 19. Delegations 16 results (showing 5 best matches)
- Paul has a contract with Ted’s Tickets to secure him box seats to the upcoming Dodgers game for $1,000. Ted’s then “assigns the contract” to another ticket agency, Sport’s Tickets. Ted’s Tickets deals mainly with concerts and Sport’s deals mainly with tickets to sporting events, so the two frequently exchange contracts that the other specializes in.
- (C) Tom’s can neither effectively assign the rights nor effectively delegate the duties under the Brett contract to Super Vacations because it is a personal services contract.
- Tom’s had relationships with the Prague government and had deals with an airline and hotels in Prague. Tom’s put together a package to provide Brett round trip plane tickets to Prague and accommodations at the Prague Hilton for a week for $1400. Brett signed a contract for that deal.
- (A) Tom’s has effectively assigned the rights, and has effectively delegated the duties, under its contract with Brett to Super Vacations.
- (B) Tom’s attempted delegation of its rights under its contract with Brett is invalid until Brett consents to having Super Vacations handle the trip.
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Chapter 4. Consideration and Promissory Estoppel Answers 22 results (showing 5 best matches)
- (A) is incorrect for two reasons. First, Smith cannot be liable on a contract theory to Dr. Jones because he never entered into a contract with Dr. Jones. Second, Smith cannot be liable in restitution under quasi-contract because Dr. Jones did not perform any services that benefitted Smith.
- A requirements contract is one in which a buyer agrees to purchase all of a particular good or service it requires from one seller, and an output contract is one in which a seller agrees to sell all its output of a particular good or service to one buyer. UCC § 2–306(1). This contract would be a requirements one.
- The parties could have effectively structured the deal so that it was not final until Patty took delivery of the car or title officially changed hands, but there is nothing in the facts to suggest that was the deal they made here. In fact, it is the opposite, the deal was done and the contract formed when Donald accepted the check. A party cannot simply renege on a contract once it is formed. Note that title is a concept that affects third parties; it is not instrumental to whether the buyer and seller formed an enforceable contract.
- (B) is incorrect because Carl and Sammy had an enforceable contract, not a standing offer, and under UCC § 2–309(3), Sammy must give reasonable notice before he can terminate the contract.
- Requirements contracts are not illusory under UCC § 2–306 because of the imposition of good faith, thus the contract is enforceable.
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Chapter 22. Applicability of Article 2 of the UCC 8 results (showing 5 best matches)
- (A) Article 2 will govern the contract because this is a contract for goods.
- (A) Article 2 will govern the contract because this is a contract for goods.
- (D) The rules of the Restatement (Second) of Contracts will govern the transaction.
- (B) Article 2 applies since the stereo was movable at the time of identification to the contract.
- (C) Article 2 does not apply since the stereo was not “identified” to the contract at the time of purchase.
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Chapter 16. Impossibility, Commercial Impracticability, and Frustration of Purpose 13 results (showing 5 best matches)
- Seller is a nuclear fusion company who contracts to supply Buyer with a working nuclear power plant at a fixed price, including supplying the uranium rods that power the reactors. The uranium rods are the most expensive component of the plant. Nuclear power plants take a long time to build, and delivery is promised ten years after the contract was signed.
- Historically the price of uranium has remained fairly constant. However, seven years after the contract was signed, but before delivery was due or accomplished, the price of uranium increased twenty-five times the price it was at the beginning of the contract in just one month’s time. To supply the uranium rods at the plant now meant that Seller would go from making $3 million on the plant to losing $75 million.
- Derek contracted with Patti to lease a retail space that Patti owned for $1,500 per month. The contract did not specify any particular type of use the retail store must be used for.
- Just after the contract was signed, the County passed laws restricting firework sales to only the least dangerous kind, making over 90% of fireworks in Derek’s inventory illegal. Derek refused to follow through and lease the retail store. Patti has brought suit for breach of contract.
- Exactly one year into the contract, The Danbury burned down through no fault of its own. As it was no longer taking guests, the hotel refused to continue making the $500/month payments to Pure Fun. Pure Fun brought suit for breach for the remaining payments due under the contract.
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Chapter 12. “Illegality” And Contracts Unenforceable On Grounds Of Public Policy 23 results (showing 5 best matches)
- (D) The contract is unenforceable unless Dave waives his defense to the contract based on Paula being unlicensed.
- Dave contracts with Paula, who is a carpenter, for Paula to build Dave a custom dining room table. The municipality in which Dave and Paula reside requires that all carpenters obtain a “business license.” There is no testing, screening, or qualifications to receive the license, other than a $500 annual fee. As it turns out, Paula had never obtained a business license at the time of contracting. Dave had never investigated whether Paula was licensed or not by the municipality.
- Dean’s neighbor played music so loudly that Dean couldn’t take it any longer. Dean thus contracted with Preston to kill the neighbor for $10,000. Preston demanded $3,000 paid up front, which Dean paid.
- Dean refused to pay Preston the remaining $7,000 due under their contract.
- , because he satisfied Dean’s primary purpose for entering the contract.
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Chapter 6. Capacity 24 results (showing 5 best matches)
- She now wants to disaffirm the contract. Which of the following would be reasons she could disaffirm the contract?
- (C) She has impliedly ratified the contract by not disaffirming the contract within a reasonable time after turning eighteen.
- (A) No, the contract was void because Lucille was aware that B.B. was drunk at the time the contract was made.
- (B) No, the contract was void regardless of whether Lucille was aware that B.B. was drunk at the time the contract was made.
- Teresa just turned seventeen and is looking for a new car. She buys a brand new Volkswagen on credit from Seller. Six months later, she got accepted to a college that banned cars on campus, and on the same day was negligent and ran the car into a tree, denting the bumper. She immediately sought to disaffirm the contract against Seller.
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Chapter 7. Mistake and Misunderstanding Answers 19 results (showing 5 best matches)
- (D) is incorrect because the contract was enforceable when the cattlemen agreed to buy/sell the bull (the time of contracting).
- (B) is incorrect because the contract did not become enforceable at the time the teacher took delivery of the bull; rather, it was enforceable when the cattleman and the teacher contracted to buy/sell the bull.
- As set forth in the explanation of Choice (D) in the previous question, the doctrine of misunderstanding would be applicable in this situation because both parties attached different meanings to a key term of the contract. If neither party knows or has reason to know of the meaning of the term attached by the other, then no contract is formed. Restatement 2d § 20(1)(a).
- Here, both parties had no reason to know of the other’s meaning of the term “Dreamliner” and so no contract was ever formed since there was no mutual manifestation of agreement to go forward on the same material terms, as is necessary for contract formation.
- Under contract law, a “mistake” is a belief that is not in accord with the facts at the time the contract was entered into. Restatement 2d § 151. Mistake can be “mutual,” where both parties are mistaken as to the same fact, or “unilateral,” where only one party is mistaken. When the elements of either type of mistake are met, the contract can be avoided, and thus mistake is treated as a “defense” to formation, and is usually asserted by a party who either does not want to go forward with the deal or who, after performing, discovers the “mistake” and seeks to rescind or avoid the agreement. This question deals with mutual mistake.
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Chapter 2. Ucc § 2–207 46 results (showing 5 best matches)
- Contractor sues Supplier for breach of contract, claiming the contract was for stainable quality windowpanes, not the paintable quality windowpanes Supplier sent.
- II. If an offeror provides in its offer that it refuses to engage in arbitration of disputes under the resulting contract, absent a change of heart by the offeror, there can never be an effective arbitration provision in the parties’ final contract (so long as the agreement is formed by an exchange of forms), even if the court determines that an arbitration clause does not materially alter the deal.
- Is Company liable to Daycare for breach of contract?
- (A) No, because of the discrepancy in the shipping terms between the Purchase Order form and Acceptance form, the two parties never had a contract.
- All windowpanes supplied under this resulting contract shall be of stainable quality.
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Chapter 17. Third Party Beneficiary Contracts 11 results (showing 5 best matches)
- Which of the following statements best describes Bill’s rights for breach of the Jane–Star contract only, in a jurisdiction that follows the rules of the Restatement 2d of Contracts?
- Brother contracts to sell his Picasso sketch to Buyer for $25,000. Brother tells Buyer to pay Sister the $25,000, which he intends to be a gift which Sister could use to take a vacation. Brother delivers the painting, but Buyer later learns that it is an imitation, and not a real Picasso. The imitation painting is worth only $100 instead of $25,000. Buyer refuses to pay Sister and seeks to rescind the contract. Assume that Brother reasonably believed that the Picasso was genuine when he sold it to Buyer.
- Seller wanted to sell his home, Blackacre, for $100,000. Buyer agreed to the $100,000 price and that Buyer would pay $25,000 of the price to Creditor for a debt that Seller owed to Creditor. Seller’s secretary was to put the contract in writing but when she did, the term regarding paying $25,000 to Creditor was omitted. Yet when Buyer and Seller later signed the agreement, they failed to note the absence of the provision and neither party paid careful attention to the contract’s terms. Buyer never paid Creditor any of the $25,000, even though title to Blackacre was exchanged.
- Under the Restatement 2d of Contracts, what is the best categorization of Bill?
- For Questions 4 and 5, assume that Bill had lent Jane $30,000, and the loan was due to be repaid in three months at the time of the Jane–Star contract. Hence, the selling of the necklace to Star, with payment to be delivered in three months to Bill, was to settle the Bill–Jane debt.
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Chapter 3. Indefiniteness and Gap Fillers 18 results (showing 5 best matches)
- Now, Mr. and Mrs. Smith refuse to pay anything, claiming the contract was for the Irvine house. Their argument is the contract was unenforceable based on indefiniteness as to which residence was intended.
- (C) The contract is enforceable because the contract is sufficiently definite regardless of the Smiths’ conduct.
- Six months after they made the agreement, Priscilla had not started construction on the patio cover and there was no other communication between them. Sarah has now sued Priscilla for breach of contract.
- , if the contract was put in writing.
- , because the terms of the contract were too indefinite.
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Chapter 18. Assignments 15 results (showing 5 best matches)
- Whistling Winery, a new winery, entered into a written contract with Fruity Farms to buy all of its monthly requirements of a certain grape from Fruity Farms for a period of two years at a specified unit price. The two also agreed to the delivery and payment terms, and included the following clause in the contract:
- Immediately following the signing of the contract, Fruity made an “assignment of the contract” to Big Bucks Bank for a $75,000 loan. Whistling Winery then ordered, took delivery of, and paid Fruity Farms the agreed price for Whistling’s requirement of grapes for the first month of operations.
- What is the most likely legal effect of the covenant not to assign the contract under modern contract law?
- (A) Liz is an intended third party beneficiary to the contract between Sandy and Tom; Sandy is the promisor and Tom is the promisee.
- The parties covenant not to assign this contract.
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Chapter 8. Duress 11 results (showing 5 best matches)
- David wants to purchase Phyllis’s mountain bicycle. David tells Phyllis: “sign this contract to sell me your bike for $200, or I will stab you with this knife.” Phyllis is terrified and signs the contract. Both David and Phyllis are adults.
- Darren tells Patricia that if she does not sell him her car for $6,000, he will murder her husband, Aaron. Patricia immediately agrees. The two sign a contract and Darren gives Patricia $6,000, and Patricia gives Darren the title and keys to her car. $6,000 is a fair price for the car. About two months later Patricia timely avoids the contract due to duress by improper threat. While in Darren’s possession, the car suffered depreciation, reasonable wear and tear and some damage, not exceeding $6,000.
- The contract between Portia and Dawn is:
- Dane hired Parker to repaint only the outside of his home. When Parker is finished Dane is very pleased with the paint job. However, believing he can bully Parker, Dane threatens to sue Parker for breach of contract and tie him up in court for a long time unless Parker agrees to paint the interior of Dane’s home as well.
- The contract between Parker and Dane is:
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Chapter 15. Anticipatory Repudiation 17 results (showing 5 best matches)
- Paul honestly believed that the contract to paint his house included painting the guest house and demanded Dave paint it. Dave honestly believed that the contract only called for him to paint the main house itself, and refused to paint the guest house.
- On June 5 Parker, a homeowner, contracted with Dennis, a landscaper, to do landscaping work around Parker’s home beginning June 25. On June 10, Dennis told Parker he wasn’t going to show up because he had obtained a more lucrative job across town that would keep him and his crew busy for the next six months.
- (B) Parker does not have standing to bring suit against Dennis until June 25, when the contract will have been breached if Dennis fails to perform on that date.
- (C) Parker may bring suit immediately for an injunction prohibiting Dennis from working elsewhere during the contracted for period, but must wait until June 25 to sue for damages.
- On May 1, Buyer contracts with Seller to purchase Seller’s watch for $5,000. Under the agreement, Seller was to give Buyer the watch now, and Buyer was to pay Seller on July 1, when Buyer was to receive a bonus at work. Seller gave Buyer the watch on May 1, but on May 15, Buyer told Seller he would not make the payment when due.
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Chapter 11. Unconscionability 6 results (showing 5 best matches)
- You are the law clerk to a judge. Your judge has made a finding in a case that a variable interest clause in a contract was oppressive and the result of surprise at the time it was made, and thus procedural unconscionability was established. The judge has also found that the interest clause was substantively fair at the time the contract was entered into, but is now grossly unfair in light of the poor economy.
- If a court determines a contract has an unconscionable provision, it is empowered to:
- (A) Refuse to enforce the entire contract.
- (B) Enforce the remainder of the contract without the unconscionable clause or clauses.
- To find unconscionability, a court must find that a clause, or the entire contract, contains:
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Chapter 5. Statute of Frauds 31 results (showing 5 best matches)
- to sign a contract for the sale and purchase of land for him. Buyer authorized Broker to sign the contract for him.
- In a breach of contract action brought by Manufacturer, in which Buyer, not admitting that any contract was made, raises the defense of the Statute of Frauds, Manufacturer will recover:
- There is no market for the second machine and the scrap value is nominal. In a contract action by Manufacturer, in which Buyer, not admitting that a contract was made, raises the defense of the Statute of Frauds, Manufacturer will recover:
- Contractor is a successful businessman known for being very expensive, taking longer than expected on jobs, but doing the best quality work. He is awarded an oral contract for $3 billion to build an office tower in Los Angeles twice the size of the Empire State Building in New York. No completion date for the project is specified.
- Is the contract within the Statute of Frauds?
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Chapter 1. Offer, Acceptance, And Mutuality 65 results (showing 5 best matches)
- (D) Store and Homeowner are in a unilateral option contract where Store is bound to sell 200 running feet of the Acme fencing at $2/running foot, but Homeowner can terminate the contract without consequence and need not pick up the fencing as promised.
- Peter and Dean then wrote up a contract on a napkin that stated that Peter would sell his house to Dean for $600,000, payment was to be made by check on the following Wednesday, and the two even called Dean’s wife into the room whereupon Peter, Dean and Dean’s wife all signed the napkin contract.
- (A) The two were in a contract if a reasonable person in Peter’s position would believe they had entered into a contract.
- (B) The two were in a contract if Peter subjectively believed they were entering into a contract.
- (C) The two were not in a contract if Dean subjectively believed they were not entering into a contract.
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Chapter 9. Undue Influence Answers 8 results (showing 5 best matches)
- An example of a situation where a third party might exercise undue influence is where parents unfairly persuade their only daughter to go to college X by not giving the daughter enough time for reflection, the chance to talk to college counselors at her high school, etc. At the point when the acceptance is set, daughter likely could immediately avoid the transaction, even though the college, the other contracting party, is innocent and acting in good faith, on undue influence grounds. However, if the college materially relies on the transaction after receiving daughter’s letter, e.g., by turning down other students and reserving a place in the small entering class for daughter, the contract becomes enforceable at that point because of the innocence and good faith of the college, the other contracting party.
- When the elements of “undue influence” are met, a party can avoid the contract. The elements of “undue influence” are given in Restatement 2d § 177:
- (B) is incorrect because Darla’s made no threat to Paula that caused her to agree to give her baby up for adoption, as is required to use a defense of duress. Restatement 2d § 175. Therefore, Paula would not be able to assert the defense of duress, but instead may assert undue influence as the reason to avoid the contract.
- (A) is incorrect because it does not matter whether Pearl understood the terms of the contract. The issue is whether Pearl was improperly pressured into signing the release by someone with whom she was in a “special relationship.”
- Restatement 2d § 177(3) provides that if a party’s manifestation of assent is induced by undue influence by one who is not a party to the transaction, “the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or materially relies on the transaction.” Therefore, Choice (B) is correct because it states this rule.
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Chapter 7. Mistake and Misunderstanding 7 results (showing 5 best matches)
- Two experienced cattlemen sign a contract to buy and sell a young bull that is only two months old for $2,000, with payment to be made 11 months after its making. If the bull turned out to be fertile, it is worth over $5,000, but if it turns out to be sterile, it is only worth $250. It is common knowledge in the cattle industry that one cannot tell if a bull is fertile until it is six months old. Buyer takes the bull back to his farm pursuant to the contract. Several months later he finds out that the bull is sterile and refuses to pay the full price.
- (D) Seller, because the contract was enforceable when the buyer took delivery of the bull.
- (B) Seller, because the contract was enforceable when teacher took delivery of the bull.
- Is Sub 3 entitled to avoid the contract on mistake grounds?
- At the time of making the contract, Seller believed it had agreed to send the lumber by the ship Dreamliner, whereas the Buyer thought it had bargained for delivery via the aircraft Dreamliner.
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Chapter 23. Warranties Answers 2 results
- (D) is incorrect as there is no rule that says a buyer may not rely on a statement made by a representative during contract negotiation. Indeed, the creation of express warranty section, UCC § 2–313, provides the opposite.
- While UCC § 2–312(1) states that in a contract for the sale of goods there is a warranty by the seller that the title conveyed is good title, this rule is subject to subsection (2), which provides that there is no warranty of title if the buyer has reason to know that the person selling it “does not claim title in himself.” Here, Dennis made it clear to Paula that there may be competing claims to the antique. Therefore, Paula would not have a claim for breach of warranty of title under UCC § 2–312.
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Table of Contents 4 results
Chapter 21. Discharge by Subsequent Agreement 7 results (showing 5 best matches)
- (A) Contractor, because $2500 is the amount of the contract.
- (D) Contractor, because he acted in good faith in performing the contract.
- In an action by Vanessa against Alex for breach of contract, she should:
- In an action by Michael against Brett for breach of contract, Michael will:
- (C) Lose, because the original contract was not in writing.
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Acknowledgments 1 result
- This Book is the result of much effort—much more than I could have done on my own. I would like to acknowledge and thank Kelly Cochran, Blake Williams and Ashton Riley, all Loyola Law School, Los Angeles Class of 2015 for all their hard work and for doing their best to ensure the Book will be helpful to Contracts students across the country. I would also like to acknowledge Loyola Law School, Los Angeles and its Faculty Research Fellowship Program for supporting the project.
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- Publication Date: November 20th, 2013
- ISBN: 9780314285966
- Subject: Contracts
- Series: Exam Pro Series
- Type: Exam Prep
- Description: Brain's Exam Pro on Contracts, Objective Questions includes over 330 objective questions covering every substantive area of Contract Law. Each answer choice explains why each answer is either correct or incorrect. Elements and rules are explained in easy-to-understand language, with a step-by-step guide on how to analyze question-types. Liberal citation to applicable sections of the Restatement (Second) Contracts, the Uniform Commercial Code, and important contract law cases, allows the students to match a question to his or her outline and class discussion. Exam preparation tips include how to prepare for graded exams, how professors construct multiple choice questions, and how to avoid common “distracters.”