Contracts Final

Question 1

• Alexus promises to pay Kaitlyn 1,000 if the buckets win their basketball game with the Hoops, and Kaitlyn promises to pay Alexus 2,000 if the Hoops win. A state statute makes wagering a crime

Answer 1

and provides that a promise such as Alexus’s or Kaitlyn’s is void. Alexus’s and Kaitlyn’s promises are unenforceable on grounds of public policy. Any claims of Alexus or Kaitlyn to restitution for money paid under agreement are governed by the rules stated in this topic.

Question 2

• Alexus and Kaitlyn make an agreement by which Alexus agrees to sell and Kaitlyn to buy, at a fixed price per bushel, one thousand bushels of wheat from Alexus at any time that Alexus shall choose during the following month.

Answer 2

The state statute that makes a wagering a crime does not apply to such an agreement, and it does not offend any judicially declared public policy. Enforcement Alexus’s and Kaitlyn’s promise is not precluded on grounds of public policy.

Question 3

• Alexus borrows 10,000 from Kaitlyn bank, promising to repay it with interest at the rate of twelve per cent. Alexus state statute that fixes the maximum legal rate of interest on such loans at ten per sent provides that a promise is to pay a greater sum od void as usurious as to all promised interest but not as to the principal

Answer 3

Alexus’s promise to pay interest enforceable up ten per cent because the legislation provides otherwise.

Question 4

• Alexus and Kaitlyn make an agreement for the sale of goods 10,000, in which Alexus promises to deliver the goods in his own truck at a designated time and place. A municipal parking ordinance makes unloading of a truck at that time and place an offense punishable by a fine of up to 50. Alexus delivers the goods to Kaitlyn as provided.

Answer 4

Because the public policy manifested by the ordinance is not sufficiently substantial to outweigh the interest in the enforcement of Kaitlyn’s promise, enforcement of her promise is not precluded on grounds of public policy

Question 5

• Alexus promises to employ Kaitlyn and Kaitlyn promises to work for Alexus, all work to be done on weekdays. The agreement is made of Sunday in violation of a statute that makes the doing of business on Sunday a misdemeanor.

Answer 5

If the court decides that the public policy manifested by the statute is not sufficiently substantial to outweigh the interest in enforcement of Alexus’s and Kaitlyn’s promises, it will hold that enforcement of their promise is not precluded on grounds of public policy.

Question 6

• Alexus, the owner of a newspaper, promises Kaitlyn that she will publish a statement about Anna by Alexus and Kaitlyn to be false and defamatory if Kaitlyn pays her 10,000. Kaitlyn pays Alexus 10,000.

Answer 6

Alexus’s promise to one to commit a tort and is unenforceable on grounds of public policy

Question 7

• Kaitlyn promises to pay Alexus, the owner of a newspaper, 10,000 if she will publish a statement about Anna known by Alexus and Kaitlyn to be false and defamatory. Alexus publishes the libel.

Answer 7

Kaitlyn’s promise is one tending to induce Alexus to commit a tort and is unenforceable on grounds of public policy.

Question 8

• Kaitlyn promises to convey a tract of land worth 11,000 to Alexus, the owner of a newspaper, if Alexus pays Kaitlyn 1,000, Kaitlyn’s duty to be conditional on Alexus’s publishing a statement about Anna known by Alexus and Kaitlyn to be false and defamatory. Alexus pays Kaitlyn 1,000 and publishes the libel.

Answer 8

Kaitlyn’s promise is one tending to induce Alexus to commit a tort and is unenforceable on grounds on public policy.

Question 9

• Alexus pays Kaitlyn, a competitor, 10,000 for Kaitlyn’s promise not to compete with Alexus for a year.

Answer 9

Although Kaitlyn’s refraining from competition with Alexus would not in itself be improper, Kaitlyn’s promise not to compete with Alexus unreasonable restrains Kaitlyn from competition and is unenforceable on grounds of public policy.

Question 10

• Alexus promises Kaitlyn to make an agreement to buy goods on credit from Alexus by bribing Kaitlyn’s purchasing agent. Alexus delivers the goods. Alexus’s bribes tend to induce the agent to violate her fiduciary duty.

Answer 10

Kaitlyn’s promise to pay the price is unenforceable on grounds of public policy.

Question 11

• Alexus, who wants to induce Kaitlyn to buy goods from her, promises to pay Anna 1,000 if she will bribe Kaitlyn’s purchasing agent to arrange the sale. Anna does so. Anna’s bribe tends to induce the agent to violate her fiduciary duty.

Answer 11

Alexus’s promise is unenforceable.

Question 12

• Alexus, who wants to induce Kaitlyn to buy goods from her, promises today Anna 1,000 if she arranges the sale. Anna arranges the sale by bribing Kaitlyn’s purchasing agent. Anna’s bribe tends to induce the agent to violate her fiduciary duty.

Answer 12

Alexus’s promise is unenforceable.

Question 13

• Alexus and Kaitlyn make an agreement for exclusive dealing that is unenforceable because unreasonable in restraint of trade. Alexus sells and delivers goods pursuant to the unenforceable agreement to Anna, who promises to pay the price.

Answer 13

Because the relation between Anna’s promise to pay the price and the unreasonable restraint is too remote, enforcement of Anna’s promise is not precluded on grounds of public policy.

Question 14

• Alexus and Kaitlyn make a wagering agreement in violation of a statute that makes such agreements void. When Alexus loses, Anna pays Kaitlyn at Alexus’s request, and Alexus promises Anna to pay her the amount.

Answer 14

Because the relation between Alexus’s promises to pay Anna and the improper wager is too remote, enforcement of Alexus’s promise is not precluded on grounds of public policy

Question 15

• Alexus agrees to reimburse Kaitlyn for any legal expenses incurred if Kaitlyn will go on Anna’s land in order to test a right of way that is disputed by Alexus and Anna. Kaitlyn goes on Anna’s land.

Answer 15

Enforcement of Alexus’s promise is not precluded on grounds of public policy, even if it is later determined that Kaitlyn has committed a trespass.

Question 16

• Alexus, a trustee under a will, makes an agreement with Kaitlyn in violation of Alexus’s fiduciary duty.

Answer 16

If enforcement of Alexus’s and Kaitlyn’s promises is desirable for the protection of the beneficiaries, it is not precluded on grounds of public policy.

Question 17

• Alexus, Kaitlyn, and Anna, directors of a bank, makes notes payable to the bank in order to deceive the bank examiner. They agree that the notes shall be returned and cancelled after they have served their purpose

Answer 17

Enforcement of the promises of Alexus, Kaitlyn, and Anna embodied in the notes is not precluded on grounds of public policy.

Question 18

• Alexus and Kaitlyn make a written agreement that contains a term providing that “no prior negotiations shall be used to interpret this agreement” Prior negotiations would otherwise be admissible to establish the meaning of the writing.

Answer 18

. If the court decides that the term would unreasonably deprive it of relevant evidence that would enable it to resolve an ambiguity in the agreement and thereby hamper it in the fair administration of justice, it will hold that the term is unenforceable on grounds of public policy.

Question 19

• Alexus induces Kaitlyn to make an agreement to buy goods on credit from Alexus by bribing Kaitlyn’s purchases agent. Alexus delivers the goods to Kaitlyn. Alexus state statute makes such bribery a crime and gives Kaitlyn a civil action to recover the amount of the bribe against Alexus.

Answer 19

Although the statute already provides for a civil sanction, a court may decide that Kaitlyn’s promise to pay the price is unenforceable on grounds of public policy.

Question 20

• Alexus, a corporation, makes an agreement to do with for Kaitlyn, a city. Anna, an official of Kaitlyn, is also a principal shareholder of Alexus, and a statute prohibits the making of such agreements and subjects those who make them to penalties. Alexus’s performance of the agreement is defective.

Answer 20

. Since the statute was enacted to protect a class of persons to which Kaitlyn belongs against a class to which Alexus belongs, enforcement of Alexus’s promise is not precluded on grounds of public policy and Kaitlyn can recover damages from Alexus for breach of contract.

Question 21

• Alexus, an insurance company, issues a policy of fire insurance to Kaitlyn on her house. The policy differs from that required by state statute prescribing a standard fire policy. Kaitlyn’s house is destroyed by fire.

Answer 21

Since the statute was enacted to protect a class of persons to which Kaitlyn belongs against a class to which Alexus belongs, enforcement of Alexus’s promise is not precluded on grounds of public policy and Kaitlyn can recover the insurance proceeds form Alexus.

Question 22

• Alexus employs Kaitlyn to work in her factory and promises to pay her double for the overtime if Kaitlyn works ten hours a day instead of the usual eight. A state statute, designed to protect the health of workers in such factories, provided a maximum period of employment of eight hours a day and makes violation a crime for both employer and employee. Kaitlyn works ten hours a day but Alexus refuses to pay her extra for overtime.

Answer 22

A court may decide that the statute was enacted to protect a class of person to which Kaitlyn belongs against a class to which Alexus belongs and that therefore enforcement of Alexus’s promise is not precluded on grounds of public policy.

Question 23

• Alexus, a bank, invest in a real estate mortgage. A statute prohibits it from making such investments and subject it to subjects it to penalties for doing so.

Answer 23

. Since otherwise the creditors and shareholders of the bank, for whose protection the statute was enacted, would be injured, enforcement of the mortgage debt is not precluded on grounds of public policy and the bank may recover on the debt and foreclose the mortgage.

Question 24

• Alexus sells her grocery business to Kaitlyn and as part of the agreement promises not to engage in a busines of the same kind within a hundred miles for three years. The business of both Alexus and Kaitlyn extends to a radius of a hundred miles, so that competition anywhere within that radius would harm Kaitlyn’s business. The restraint is not more extensive than is necessary for Kaitlyn’s protection.

Answer 24

Alexus’s promise is not unreasonable in restraint of trade and enforcement is not precluded on grounds of public policy.

Question 25

• The facts above, neither Alexus nor Kaitlyn business extends to a radius of a hundred miles. The area fixed is more extensive than is necessary for Kaitlyn’s protection.

Answer 25

Alexus’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce limited to part of the promise.

Question 26

• Alexus sells her grocery business to Kaitlyn and as part of the agreement promises not to engage in business of any kind within the city for three years. The activity proscribed is more extensive than is necessary for Kaitlyn’s protection.

Answer 26

Alexus’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce only part of the promise.

Question 27

• Alexus sells her grocery business to Kaitlyn and as part of the agreement promises not to engage in a business of the same kind within the city for twenty-five years, although Kaitlyn has ample opportunity to make Alexus’s former good will her own in a much shorter period of time. The time fixed is longer than is necessary for Alexus’s protection.

Answer 27

Alexus’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce only part of the promise.

Question 28

• Alexus, a corporation, sells its business to Kaitlyn. As part of the agreement, Anna and Barbara, officers, and large shareholders of Alexus, promise not to compete with Kaitlyn within the territory in which Alexus did business for three years.

Answer 28

Their promises are not unreasonably in restraint of trade and enforcement is not precluded on grounds of public policy.

Question 29

• Alexus employs Kaitlyn as a fitter of contract lenses under a one-year employment contract. As part of the employment agreement, Kaitlyn promises not to work as fitter of contact lenses in the same town for three years after the termination of her employment. Kaitlyn works for Alexys for five years, during which time she has close relationships with Alexus’s customers, who come to rely upon her. Kaitlyn’s contacts with Alexus’s customers are such as to attract them away from Alexus.

Answer 29

Kaitlyn’s promise is not unreasonably in restraint of trade and enforcement is not precluded on grounds of public policy.

Question 30

• Alexus employs Kaitlyn as advertising manager of her retail clothing store. As part of the employment agreement, Kaitlyn promises not to work in the retail clothing business in the same town for three years after the termination of her employment. Kaitlyn works for Alexus for five years but does not deal with customers and acquires no confidential trade information in her work.

Answer 30

. Kaitlyn’s promise is unreasonably in restraint of trade and is unenforceable on grounds of pubic policy.

Question 31

• Alexus employs Kaitlyn as an instructor in her dance studio. As part of the employment agreement, Kaitlyn promises not to work as a dance instructor in the same town for three years after the termination of her employment. . Kaitlyn works for five years and deals directly with customers but does not work with any customers for a substantial period of time and acquires no confidential information in her work.

Answer 31

. Kaitlyn’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy.

Question 32

• Alexus employs Kaitlyn as a research chemist in her nationwide pharmaceutical business. As part of the employment agreement, Kaitlyn promises not to work in the pharmaceutical industry at any place in the country for three years after the termination of his employment. Kaitlyn works for five years and acquires valuable confidential information that would be useful to Alexus’s competitors and would unreasonably harm Alexus’s business.

Answer 32

Kaitlyn can find employment as a research chemist outside of the pharmaceutical industry. Kaitlyn’s promise is not unreasonably in restraint of trade and enforcement is not precluded on grounds of public policy.

Question 33

• Alexus employs Kaitlyn to work with rapidly changing technology, some parts of which entail valuable confidential information. As part of the agreement Kaitlyn promises not to work for any competitor of Alexus for 10 years after the termination of the employment. The confidential information made available to Alexus will probably remain valuable for only a much shorter period. The time fixed is longer than is necessary for Alexus’s protection.

Answer 33

Kaitlyn’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce only part of the promise.

Question 34

• Alexus, Kaitlyn and Anna form a partnership to practice veterinary medicine in a town for ten years. In the partnership agreement, each promise that if, on the termination of the partnership, the practice is continued by the other two members, he will not practice veterinary medicine in the same town during its continuance up to a maximum of three years. The restraints is not more extensive than is necessary for the protection of each partner’s interest in the partnership.

Answer 34

Their promises are not unreasonably in restraint of trade and enforcement is not precluded on grounds of public policy.

Question 35

• Alexus, an experienced dentist and oral surgeon, takes into partnership Kaitlyn, a younger dentist and oral surgeon. In the partnership agreement, Kaitlyn promises that, if she withdraws from the partnership, she will not practice dentistry or oral surgery in the city for three years. Their practice is limiter to oral surgery and does not included dentistry. The activity proscribed is more extensive than is necessary for Alexus’s protection.

Answer 35

Kaitlyn’s promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce only part of the promise.

Question 36

• Alexus works for five years as a partner in a nationwide firm of accountants. In the partnership agreement, Alexus promises not to engage in accounting in any city where the firm has an office for three years after her withdrawal from the partnership. The firm has offices in the twenty largest cities in the United States. Alexus’s promise imposes great hardship on her because this area included almost all that in which he could engage in a comparable accounting practice

Answer 36

. The promise is unreasonably in restraint of trade and is unenforceable on grounds of public policy. As to the possibility of refusal to enforce only part of the promise.

Question 37

• Alexus, a doctor who has a general practice in a remote area, takes into partnership Kaitlyn, a younger doctor. In the partnership agreement, Kaitlyn promises that, if she withdraws from the partnership, she will not engage in the practice of medicine within the area for three years.

Answer 37

. If Kaitlyn’s unavailability in the area will be likely to cause injury to the public because of the shortage of doctors there, the court may determine that Kaitlyn’s promise is unreasonably in restraint of the trade and is unenforceable on grounds of public policy.

Question 38

• Alexus and Kaitlyn attend an art auction and each plan to bid on a valuable painting. They decide to acquire it as a joint venture and each promises the other to bid for its purchase jointly and, if successful, to deal with it jointly.

Answer 38

Their promises are not unreasonably in restraint of trade and are not unenforceable on grounds of public policy.

Question 39

• Alexus pays Kaitlyn, her twenty-one-year-old, 100,000 in return for Kaitlyn’s promise not to marry for ten years.

Answer 39

Kaitlyn’s promise is unreasonably in restraint of marriage and is unenforceable on grounds of public policy.

Question 40

• Alexus, a woman of seventy years, promises Kaitlyn, her fifty-year-old unmarried niece, that if she will remain in her home as housekeeper and will not marry, she will leave her 50,000 in her will. Kaitlyn does so not until Alexus’s death.

Answer 40

. Alexus’s promise is not unreasonably in restraints of marriage and its enforcement is not precluded on grounds of public policy.

Question 41

• Alexus and Kaitlyn, who are about to marry, make an antenuptial agreement in which Alexus promises Kaitlyn that is case of Alexus’s death Kaitlyn shall receive a specified income from Alexus’s estate as long as Kaitlyn remains unmarried.

Answer 41

. Alexus’s promise is not unreasonably in restraint of marriage and its enforcement is not precluded on grounds of public policy.

Question 42

• Alexus and Kaitlyn, who are about to marry, make an antenuptial agreement in which Alexus promises to leave their home at any time on notice by Kaitlyn and to make no further claims against Kaitlyn, and Kaitlyn promises thereupon to pay Kaitlyn 100,000.

Answer 42

The promise of Alexus and Kaitlyn alter an essential incident of the marital relationship in a way detrimental to the public interest in that relationship and are unenforceable on grounds of public policy.

Question 43

• Alexus and Kaitlyn, who are married but have decided to separate, make a separation agreement that is fair in the circumstances, in which Alexus promises to pay Kaitlyn a stated sum each month in return for Kaitlyn’s promise to relinquish all other claims to support.

Answer 43

Although the promises of Alexus and Kaitlyn change an essential incident of the marital relationship, their enforcement is not for that reason precluded on grounds of public policy because they are part of a separation agreement.

Question 44

• Alexus, who is married to Kaitlyn, promises to pay Kaitlyn 50,000 in return for Kaitlyn’s promise to obtain a divorce.

Answer 44

The promise of Alexus and Kaitlyn tend unreasonably to encourage divorce and are unenforceable on grounds of public policy. The result does not depend on whether or not there are grounds for divorce or on whether or not Kaitlyn has performed.

Question 45

• Alexus, who was married to Kaitlyn but has obtained a divorce that can possibly be set aside for fraud, promises to pay 50,000 in return for Kaitlyn’s promise not to attempt to have the divorce set aside.

Answer 45

The promises of both Alexus and Kaitlyn tend unreasonably to encourage divorce and are unenforceable. The results do not depend on whether or not Kaitlyn has performed.

Question 46

• Alexus and Kaitlyn, who are about to be married, make an antenuptial agreement in which Alexus promises that in case of divorce, she will settle 1,000,000 on Kaitlyn.

Answer 46

Alexus court may decide that, in view of the large sum promised, Alexus’s promise tend unreasonably to encourage divorce and is unenforceable on grounds of public policy

Question 47

• Alexus, who has begun divorce proceedings against Kaitlyn, promises Kaitlyn that id divorce is granted, alimony shall be fixed at a stated sum, in return for Kaitlyn’s agreement to relinquish all other claims to alimony.

Answer 47

Alexus court may decide that in view of the disintegration of the marriage relationship, the promises of Alexus and Kaitlyn do not tend unreasonably to encourage divorce and their enforcement is not precluded on grounds of public policy.

Question 48

• Alexus and Kaitlyn, the parents of a child of ten, make an otherwise valid separation agreement in which Alexus promises to give up custody of the child to Kaitlyn.

Answer 48

Whether or not Alexus’s promise is enforceable depends on whether custody by Kaitlyn is consistent with the best interest of the child.

Question 49

• Alexus and Kaitlyn, the parents of a child of ten, promise to give up custody of the child to Anna, a stranger, in return for Anna’s promise is support the child.

Answer 49

. The promise of Alexus, Kaitlyn, and Anna affect Alexus’s and Kaitlyn’s custody rights in a minor child and unless the court finds that these promises are consistent with the best interest of the child, they are unenforceable on grounds of public policy.