Contracts Exam I

Question 1

Alexus owes Kaitlyn $50. In exchange for Alexus’s payment of the debt Kaitlyn makes a promise.

Answer 1

Under rule 73, Kaitlyn’s promise does not have consideration
Not consideration because Alexus has the duty to pay back Kaitlyn no matter if she promises

Question 2

Alexus lives in Kaitlyn’s home and renders services to Kaitlyn over a period of years, and after Kaitlyn’s death claims the value of the services. By statute Alexus is incompetent to testify to transaction with Kaitlyn, and there is no evidence of the verbal promise.

Answer 2

Factors relevant to determine whether the services were gratuitous are: a request by Kaitlyn that Alexus render the services, the relation between Alexus and Kaitlyn, the value of services to Kaitlyn, the alternative foregone and hardship suffered by Alexus, the financial circumstances of the parties, the relation between Kaitlyn and her legatees or distributes, and their connection with Alexus’s service.

Question 3

Alexus offers to sell Kaitlyn her library at a stated price, forgetting that her favorite Shakespeare, which she did not intend to sell, is in the library. Kaitlyn accepts the offer.

Answer 3

There is a contract for Shakespeare unless Kaitlyn knows or has reason to know of Alexus’s temporary forgetfulness.

Question 4

Alexus writes an offer to Kaitlyn, which she encloses in an envelope, address, and stamps. Shortly afterwards, she decides not to send the offer, but by mistake she deposits the offer in the mail. It is delivered to Kaitlyn, who accepts the offer.

Answer 4

There is a contract unless Kaitlyn knows or has reason to know of Alexus’s error.

Question 5

Alexus mails an offer to Kaitlyn which Alexus says, “I must receive your acceptance by return mail.”

Answer 5

An acceptance sent within a reasonable time by any other means, which reaches Alexus as soon as a letter sent by mail would normally arrive, creates a contract on arrival.

Question 6

Alexus makes an offer to Kaitlyn and adds, “send your office boy around with an answer to this by twelve o’clock” The offeree comes himself before twelve and accepts.

Answer 6

There is a contract

Question 7

Alexus offers to sell her land to Kaitlyn on certain terms, also saying, “You must accept this, if at all, in person at my office at 10pm tomorrow”

Answer 7

Kaitlyn’s power is strictly limited to one method of acceptance

Question 8

Alexus offers to sell her land to Kaitlyn on certain terms, also stating, “You may accept my offer by leaving word at my house.”

Answer 8

This indicates one operative mode of acceptance; but Kaitlyn’s power is not limited to that mode alone. A personal statement would be just fine.

Question 9

Alexus makes an offer to Kaitlyn and add, “My address is 54 street.” This is a business address. Kaitlyn sends an acceptance to Alexus’s home which Alexus receives promptly.

Answer 9

Unless the circumstances indicate that Alexus has made a positive requirement of the place where the acceptance must be sent, there is a contract.

Question 10

Alexus offers to sell Kaitlyn 100 tons of steel at a certain price. Kaitlyn replies, “I accept your offer, I hope that if you can arrange to deliver the steel in weekly installments of 25 tons you will do so

Answer 10

There is a contract but Alexus is not bound to do what Kaitlyn asked for

Question 11

Alexus offer to sell specified hardware to Kaitlyn on stated terms. Kaitlyn replies, “I accept you offer; ship in accordance with your statement. Please send me also No. 5 hand saw at your listed price

Answer 11

Request for saw is a separate offer and not a counter-offer.

Question 12

Alexus, a merchant, mails Kaitlyn, a carpenter in the same city, an offer to employ Kaitlyn to fit up Alexus’s office in accordance with Alexus’s specifications and Kaitlyn’s estimate previously submitted, the work to be completed in two weeks. The offer says, “You may begin at once,” and Kaitlyn immediately buys lumber and begins to work on it in her own shop. The next day, before Kaitlyn has sent a notice of acceptance or begun work at Alexus’s office or rendered the lumber unfit for other jobs, Alexus revokes the offer.

Answer 12

The revocation is timely, since Kaitlyn has not begun to perform

Question 13

Alexus, a regular costumer of Kaitlyn, orders fragile goods from Kaitlyn which Kaitlyn carries in stock and ships in his own trucks. Following his usual practice, Kaitlyn selects the goods ordered, tags them as Alexus’s, crates them and loads them on a truck at substantial expense.

Answer 13

Performance has begun, and Alexus’s offer is irrevocable.

Question 14

Alexus makes Kaitlyn an offer, inviting acceptance by telegram, and Kaitlyn duly telegraphs an acceptance. Alexus purports to revoke the offer in person or by telephone, but attempted revocation is received by Kaitlyn after the telegram of acceptance is dispatched

Answer 14

There is no effective revocation

Question 15

Alexus mails to Kaitlyn a note payable by Anna with instructions to collect the amount of the note and remit by mailing Kaitlyn’s own check. At Anna’s request Kaitlyn mails her own check as instructed. Subsequently, at Anna’s request, Kaitlyn recovers her letter and check from the post office.

Answer 15

The recovery does not discharge the contact formed by the mailing of Kaitlyn’s check. But if Kaitlyn is a bank, its remittance may be provisional under 4-211

Question 16

Q Alexus mails an offer to Kaitlyn to appoint Kaitlyn Alexus’s exclusive distributor in a specified area. Kaitlyn duly mails an acceptance. Thereafter Kaitlyn mails a letter which is received by Alexus before the acceptance is received and which rejects the offer and makes a counteroffer. On receiving the rejection and before receiving the acceptance, Alexus executes a contract appointing Anna as exclusive distributor instead of Kaitlyn.

Answer 16

Kaitlyn is estopped to enforce the contract

Question 17

The government mails to Alexus an offer to pay the amount quoted by her for the manufactured of two sets of ship propellers, and Alexus mails an acceptance. Alexus then discovers that by mistake she has quoted the price for the single set, and so informs the Government by a telegram which arrives before the acceptance.

Answer 17

Alexus mailing to acceptance created a contract. The question whether the contract is voidable for mistake is governed by the rules in 153-54

Question 18

Alexus mails to Kaitlyn an offer to buy goods, and Kaitlyn mails an acceptance. The application of the new tax statute depends on when title to goods passes to Alexus, and under UCC 2-401 title passes at the time of contracting.

Answer 18

The time of contracting is the time when Kaitlyn’s acceptance is mailed.

Question 19

Alexus offers to insure Kaitlyn’s house against fire, the insurance to take effect upon actual payment of the premium and invites Kaitlyn to reply by mailing her check for a specified amount. Kaitlyn duly mails check. While Kaitlyn letter is in transit, the house burns down.

Answer 19

The loss is within the period of insurance coverage.

Question 20

Alexus makes Kaitlyn an offer by mail, or messenger, and Kaitlyn promptly send an acceptance by her own employee.

Answer 20

There is no contract until the acceptance is received by the offeror

Question 21

Alexus, for consideration, give Kaitlyn an option to buy property, written notice to be given on or before a specified date.

Answer 21

Notice dispatched before but not received until after the date is not effective to exercise the option.

Question 22

Alexus submits a bid to supply goods to the government, which becomes irrevocable when bids are opened. Within reasonable time the Government mails a notice of award of the contract to Alexus.

Answer 22

Until Alexus receives the notice, there is no contract.

Question 23

Alexus sends Kaitlyn by mail an offer dated from Alexus’s house and states as a condition of the offer that an acceptance must be received within three days. Kaitlyn mails an acceptance which reaches Alexus’s house and is delivered to a servant or is deposited in a mailbox at the door within three days.

Answer 23

There is a contract

Question 24

Alexus sends Kaitlyn by mail an offer, but later, desiring to revoke the offer, telegraphs Kaitlyn to that effect. The messanger boy carrying the telegram from the receiving office meets Anna, Kaitlyn’s neighbor, who volunteers to carry the telegram to Kaitlyn, and accordingly is given it by the messenger boy. Anna forgets to deliver it to Kaitlyn until the following morning.

Answer 24

An acceptance by Kaitlyn mailed prior to this time creates a contract

Question 25

Alexus gives several lessons on the violin to Kaitlyn’s child, intending to give the child a course of 20 lessons, and to charge Kaitlyn the price. Kaitlyn never requested to Alexus to give this instruction but silently allows the lessons to be continued to their end, having reason to know Alexus’s intention

Answer 25

Kaitlyn is bound to pay the price of the course

Question 26

Alexus offers by mail to sell Kaitlyn a horse already in Kaitlyn’s possession for 250, saying “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as an acceptance.” Kaitlyn makes no reply, but she does not intend to accept

Answer 26

There is no contract

Question 27

The facts being otherwise stated above, Kaitlyn replies by return mail saying, “I accept your offer”

Answer 27

There is a contract

Question 28

The facts being otherwise stated above, Kaitlyn makes no reply and remains inactive with the intention of thereby expression her acceptance.

Answer 28

There is a contract

Question 29

Alexus sends Kaitlyn a one-volume edition of Shakespeare with a letter, saying “if you wish to buy this book send me $6.50 within one week after receipt hereof, otherwise notify me and I will forward postage for return.” Kaitlyn examinees the book and without replying makes a gift of it to her husband.

Answer 29

Kaitlyn owes Alexus 6.50

Question 30

The facts as stated above, Kaitlyn examines the book and without replying carefully lays it on the self to await Alexus’s messenger

Answer 30

There is no contract

Question 31

The facts being stated above, Kaitlyn examines the book and uses it or gives it to her husband, writing Alexus as the same time that she has taken the book, but that it is only worth 5 dollars and that she will pay no more.

Answer 31

Alexus may at her option treat Kaitlyn as a tort-feasor or as contractive to pay 6.50

Question 32

Under the claim of right made in error but in good faith, Alexus digs a well on Kaitlyn’s unused land and takes water therefrom which has no market value and no value to Kaitlyn, doing no injury to the value of the land. Kaitlyn notifies Alexus that he will charge a 50 a day for every day on which Alexus takes water from her land. Even after it is adjudicated that Alexus right is nonexistent

Answer 32

Alexus does not accept Kaitlyn terms by taking water

Question 33

Alexus offers to buy a book owned by Kaitlyn and to pay 10 dollars in exchange therefor. Kaitlyn accepts the offer and delivers the book to Alexus.

Answer 33

The transfer and delivery of the book constitutes a performance and are considerations for Alexus’s promise/
This is so even though Alexus at the time she makes the offer secretly intends to pay Kaitlyn 10 dollars whether or not he gets the book, or even though Kaitlyn accepts secretly intends to not collect the 10 dollars

Question 34

Alexus receives a gift from Kaitlyn of a book worth 10. Subsequently Alexus promises to pay Kaitlyn the value of the book

Answer 34

There is no consideration for Alexus’s promise. This is so even though Kaitlyn at the time she makes the gift secretly hopes that Alexus will pay her. As to the enforcement of such promises see 86

Question 35

Alexus promises to make a gift of 10 to Kaitlyn. In reliance on the promise Kaitlyn buys a book from Anna and promises to for Anna 10 for it.

Answer 35

There is no consideration for Alexus’s promise. As to the enforcement of such promises so 90

Question 36

Alexus desires to make a binding promise to give 100 to her daughter Kaitlyn. Being advised that a gratuitous promise in not binding, Alexus writes out and signs a fake recital that Kaitlyn sold her car for 1000 and a promise to pay that amount.

Answer 36

There is no consideration for Alexus’s promise

Question 37

Alexus desires to make a binding promise to give 1000 to Kaitlyn. Beings advised that a gratuitous promise is not binding, Alexus offers to buy from Kaitlyn for 1000 a book worth less than a penny.

Answer 37

No consideration

Question 38

Alexus owns land worth 100000 which is subject to a mortgage to secure a debt of 5000. A promise to make a gift of the land to Kaitlyn and to pay off the mortgage and later gives Kaitlyn a deed subject to the mortgage.

Answer 38

Kaitlyn’s acceptance of the deed is not consideration for Alexus’s promise to pay the mortgage.

Question 39

Alexus and Kaitlyn agree that Alexus will advance 1000 to Kaitlyn as a gratuitous loan. Kaitlyn promises to accept the loan is not consideration for Alexus’s promise to make

Answer 39

But the land when made is consideration for Kaitlyn’s promise to repay.

Question 40

Alexus promises Kaitlyn, aged 16, that Alexus will pay 1000 when Kaitlyn turns 21 if Kaitlyn doe not smoke before then

Answer 40

Kaitlyn’s forbearance to smoke is a performance and if bargained for is consideration for Alexus’s promise

Question 41

Alexus promises Kaitlyn to Guarantee payment of a bill of goods if Kaitlyn sells the goods to Anna.

Answer 41

Selling the goods to Anna is consideration for Alexus’s promise

Question 42

Alexus offers a reward to whoever produces evidence leading to the arrest and conviction of the murdered of Kaitlyn. Anna produces such evidence in performance as her duty as a police officer.

Answer 42

Anna performance is not consideration for Alexus’s promise

Question 43

Anna’s duties are limited to crimes committed in a particular sate, and while on vacation she gathers the evidence to a crime committed elsewhere

Answer 43

Annas performance is consideration

Question 44

In a State where contracts between husband and wife are enforced and spouses are under a duty to not leave without just cause, Alexus’s wife, Kaitlyn leaves without just cause. Alexus promises to pay Kaitlyn 10000 for coming back. Kaitlyn comes back and Alexus doesn’t pay

Answer 44

Alexus is not bound bc Kaitlyn had a legal duty to come back

Question 45

Alexus, an architect, agrees with Kaitlyn to superintend a construction project for a fixed fee. During the course of the project, without excuses, Alexus takes away her plans and refuses to continue, and Kaitlyn promises to her an extra fee if Alexus will resume.

Answer 45

Alexus’s resumption of work is not consideration for Kaitlyn’s promise of an extra fee (duty)

Question 46

Alexus files a claim for total disability under an accident insurance policy written by Kaitlyn. Without investigation, discussion, or dispute, Kaitlyn pays Alexus lesser amount which would be payable for partial disability, and Alexus signs a receipt for full payment of the claim.

Answer 46

The payment is not consideration for Alexus’s promise to accept it in full satisfaction for her claim for total disability

Question 47

Alexus, being insovent and contemplating bankruptcy offers Kaitlyn 30 in full settlement of debt of 100. Kaitlyn dissuades Alexus from going into bankruptcy, accepts the offer, receives the money, and closes the account.

Answer 47

Alexus’s forbearance to seek a discharge in bankruptcy is consideration for Kaitlyns promises not to seek further payment

Question 48

Alexus owes Kaitlyn a matured liquidated debt bearing interest. Mutual promises to extend the debt for a year even at a lower rate if interest is binding.

Answer 48

By such agreement, Alexus gives up the right to terminate the running of interest by paying the debt

Question 49

Alexus and Kaitlyn are engaged to be married. In an antenuptial agreement Anna, Alexus’s mother, promises Kaitlyn that Anne will pay an annuity to Alexus, and Alexus and Kaitlyn will marry in reliance on the promise

Answer 49

There marriage is consideration for Anna’s promise

Question 50

Alexus and her wife Kaitlyn are employed as domestic servants of Anna. Kaitlyn having become ill, Anna employs Alexus to care for Kaitlyn in the home of Alexus and Kaitlyn

Answer 50

Alexus’s care for Kaitlyn is consideration for Anna’s promise to pay wages to Alexus.

Question 51

Alexus contracts with Kaitlyn to install heating units in houses being built by Kaitlyn and Anna. Kaitlyn becomes insolvent and discontinues work, and Anna promises to pay Alexus if Alexus completes the installation in accordance with the contract between Alexus and Kaitlyn

Answer 51

Alexus’s performance is consideration

Question 52

Alexus, an infant, promises Kaitlyn to pay Kaitlyn 50 for a set of books which Alexus does not need. Kaitlyn delivers the books. Alexus becomes of age and threatens to rescind the bargain, as the law permits him to do. Kaitlyn promises Alexus that is Alexus will pay the 50 as originally agreed, Kaitlyn will give Alexus another book. Alexus, induced thereby pays the 50

Answer 52

The payment is consideration

Question 53

Alexus sells good to Kaitlyn, who becomes indebted therefor in the sum of 100. The statute of limitations bars any remedy of Alexus to recover the debt. Alexus promises that Kaitlyn if Kaitlyn pays the debt, Alexus will give Kaitlyn a specified book. Kaitlyn pays the debt

Answer 53

The payment is consideration.

Question 54

Alexus, a ship-owner, has a legal duty to provide maintenance and cure for Kaitlyn, a seaman. Kaitlyn honestly but unreasonably claims that adequate care is not available in a free public hospital and that she is entitled to treatment by a private physician.

Answer 54

Kaitlyn’s forbearance to press the claim is consideration for Alexus’s promise to be responsible for the consequences of any improper treatment in the public hospital

Question 55

Alexus, knowing that she has not legal basis for complaint, frequently complains to Kaitlyn, her mother, that Kaitlyn has made more gifts to Kaitlyn’s other children than to Alexus. Kaitlyn promises that if Alexus will cease complaining, Kaitlyn will forgive a debt owed by Alexus to Kaitlyn.

Answer 55

Alexus’s forbearance to assert her claim of discrimination is not consideration for Kaitlyn’s promise

Question 56

Alexus, knowing that Kaitlyn is married to a man, cohabits with him for several years. During the times that Kaitlyn promises to marry Alexus as soon as she is divorced. After cohabitation ceases, Alexus surrenders all her claims on account of the promise to marry in consideration of Kaitlyn’s promise to pay her 1000 monthly during her life.

Answer 56

Under applicable state law Alexus has no valid claim. If it is found that Alexus knew there was no valid claim, there is no consideration for Kaitlyn’s promise of payment.

Question 57

Alexus promises to pay a debt to Kaitlyn, or to perform an existing contractual duty to Kaitlyn, or to perform her duty as a public official. There legal duty is neither doubtful nor the subject of honest dispute, but Alexus would not have fulfilled the duty but for Kaitlyn’s promise.

Answer 57

Alexus’s promise is not consideration for Kaitlyn’s return promise

Question 58

Alexus promises Kaitlyn to surrender or to forebear suit upon a claim either against Kaitlyn or against Anna. Alexus knows the claim is invalid

Answer 58

Alexus’s promise to not consideration for a return promise by Kaitlyn.

Question 59

Alexus promises Kaitlyn to pay her 5000 if Kaitlyn’s ship now at sea has already been lost, knowing that the ship has not been lost.

Answer 59

Alexus promise is illusory and is not consideration for a return promise.

Question 60

The facts above, Alexus promises not knowing whether the ship has been lost or not.

Answer 60

Alexus promises is consideration even though Alexus has reason to know that the ship has not been lost

Question 61

Alexus sells to Kaitlyn a tract of land said to contain 500 acres. Later Alexus and Kaitlyn agree to have the land surveyed; Alexus promise to pay Kaitlyn 16 for each acre of deficiency; Kaitlyn promises to pay Alexus 16 for each acre of excess.

Answer 61

Alexus’s promises is consideration for Kaitlyn’s promise and other way around

Question 62

Alexus makes a promise in exchange for a return promise by Kaitlyn

Answer 62

The fact that the contract is voidable by Alexus infancy and Kaitlyn’s fraud does not prevent Alexus’s promise from being consideration

Question 63

Alexus contracts to sell property to Kaitlyn. As a favor to Kaitlyn, who is Anna’s friend, and in consideration of Alexus’s performance of the contract, Anna guarantees that Kaitlyn will pay the agreed price.

Answer 63

Alexus’s performance is consideration for Anna’s promise

Question 64

Alexus has executed a document in the form of a guaranty which imposes no obligation on Alexus and has no value.

Answer 64

Kaitlyn surrender of the document to Alexus, if bargained for, is consideration for a promise by Alexus to pay 100000

Question 65

Alexus borrows 300 from Kaitlyn to enable Alexus to begin litigation to recover gold mine, and promises to repay 100000 when she recovers the mine

Answer 65

There is consideration

Question 66

Alexus is pregnant with an illegitimate child of a wealthy man. Alexus promises to give the child Alexus’s surname and His given name, and He promises to provide the support and education of the child and to set up a trust of securitites to provide the child.

Answer 66

The naming of the child is consideration

Question 67

Alexus, knowing that Kaitlyn is going to college, promises Kaitlyn that Alexus will give her 50000 on completion of her courses. Kaitlyn goes to college, and borrows and spends more than 5000 for college expenses. When she ahs nearly completed her course, Alexus notifies her of an intention to revoke the promise.

Answer 67

Alexus’s promise is binging and Kaitlyn is entitiled to payment on completion of the course without regard to whether her performance was bargained for

Question 68

Alexus promises Kaitlyn not to forclose, for specified time, a mortage which Alexus holds on Kaitlyn’s land. Kaitlyn thereafter makes improvements on the land.

Answer 68

Alexus’s promise is binding and may be enforced by denial of foreclosure before this time as elapsed

Question 69

Alexus sues Kaitlyn in municipal court for damages for personal injuries caused by Kaitlyn’s negligence. After the one year statute of limitations has run, Kaitlyn requests Alexus to discontinue the action and start again in the superior court where the action can be consolidated with other action against Kaitlyn arising out of the same accident.

Answer 69

Alexus does so. B implied promise that no harm to Alexus will result bars Kaitlyn from asserting the statute of limitations as a binding

Question 70

Alexus has been employed by Kaitlyn for 40 years. Kaitlyn promises to pay Alexus pension of 300 per month when Alexus retires. Alexus retires and forbears to work elsewhere for several yeats while Kaitlyn pays the pension

Answer 70

Binding