Exam 3 (legal part 1) Flashcards
Air Flo, Inc., and Banyan Grove Apartments enter into an oral contract in which Air Flo agrees to provide air-conditioning and heating maintenance for Banyan Grove’s facilities for two years. This contract is enforceable by
none of the choices
At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand phonograph, believing that it is worth more than the price asked. When the item proves to be less valuable, Dulcinea is
liable on the bid
Creighton applies to BigData Corporation for a position as a software engineer. Creighton has no training in computers or programming and no background as an engineer. After Creighton is hired, BigData learns the truth. BigData can
rescind the contract on the basis of fraud.
Daisy files a suit against Elton to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if
Daisy foreseeably and justifiably relied on Elton’s promise to her detriment.
Dumont threatens physical harm to force Eddie to sell his business, Citywide Vending, Inc., to Dumont for a below-market price. This is
duress
Dwight believes that a new phone to be sold by Ear Candy Corporation will become the most widely bought and used phone in the global market. Dwight enters into a contract to buy 500 shares of Ear Candy stock, anticipating an increase in its value. If the price of the stock does not rise, Dwight can recover
nothing
Garland induces Jules to enter into a contract for the purchase of a Chef’s Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth, he can
rescind the contract on the basis of fraud.
Gene, an accountant, convinces his client Lucille to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Lucille did not act out of her free will. This is
undue influence
Grant and Hester enter into a contract for a sale of Hester’s Pastoral Valley Orchard. This contract
must be in writing to be enforceable
Hanson and Taylor sign a written contract for the transfer of Hanson’s Foot & Ankle Clinic to Taylor. Hanson claims that the parties later orally agreed to modify it. Any oral modification is likely not enforceable if it falls under
the statute of frauds
In La Junta, Carlos and Alvaro contract for the sale of five hundred head of Carlos’s cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. Alvaro is
not required to pay due to the bi-lateral (mutual) mistake.
In selling a 300-acre farm to Rural Land Investments, Inc., Simone tells Rurals that the land “will be worth twice as much by next year.” This is
opinion
On Monday, Merlin buys a tablet for $500 from a Pads & Pods store. On Tuesday, he returns to the store and buys a GPS device for $200. On Wednesday, he downloads $100 worth of tunes from singsong.com. To be enforceable, the contract must be in writing for the purchase of
the tablet only
Phoebe enters into a contract with Everest for a guided tour of Whitewater Canyon. Everest acts as though he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Phoebe is most likely a victim of
frauds
Fact Pattern 12-1
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos’s bid is significantly low.
Refer to Fact Pattern 12-1. Any contract with AgriCo-op that includes the mistake may be rescinded
if the error was made inadvertently and without gross negligence.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos’s bid is significantly low.
Refer to Fact Pattern 12-1. Any contract with AgriCo-op that includes the mistake may be rescinded
if AgriCo-op knew or should have known of the mistake.
Fact Pattern 12-2
Charlie and Dill sign a written contract for the sale of Dill’s Honky-Tonk Country Dance Hall to Charlie. The parties intend their written contract to be a final statement of the terms of their agreement.
Refer to Fact Pattern 12-2. Later Dill disputes some of the provisions in the deal with Charlie. If the dispute results in litigation, a court will most likely exclude evidence that
contradicts the written terms.
Fact Pattern 12-2
Charlie and Dill sign a written contract for the sale of Dill’s Honky-Tonk Country Dance Hall to Charlie. The parties intend their written contract to be a final statement of the terms of their agreement.
Refer to Fact Pattern 12-2. The writing that Charlie and Dill signed is
a completely integrated contract.
Sharon agrees to assume a debt owed by Tom’s Guitars Inc. to United Funds Bank. The agreement is not in writing. To be enforceable under the “main purpose” rule, the promise must be for the benefit of
sharon
Ulrich files a suit against Vern to enforce a written contract. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove
an orally agreed-on condition precedent.
Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the beneficiary. This is
a third party intended beneficiary contract.
Carpets n’ Rugs, Inc., agrees to carpet Downtown Realty’s offices, using a particular brand of durable carpet. Carpets n’ Rugs completes the job but uses a different brand of wear- and weather-resistant carpeting. This is most likely
substantial performance.
D’Alemberte contracts with Ella to render pesonal nursing services for the benefit of Federica. This is
a third party beneficiary contract.
Emma, a professional photographer, and Ferris enter into a contract under which Emma agrees to photograph and video Ferris’s family reunion in exchange for $750. The contract can expressly prohibit and prevent the transfer of
Ferris’s right to receive PERSONAL SERVICES
Forrest makes and sells furniture. Forrest and Glenda enter into a contract for the delivery of Forrest’s products to Glenda’s Gear retail locations for which she agrees to pay the invoiced price. Forrest transfers the right to payment under the contract to Haulers Trucks & Trailers. This transfer is
an assignment
Gilly agrees to buy Howard’s Bakery on the express condition that the bakery’s suppliers extend the same credit terms to Gilly that the suppliers currently extend to Howard. This approval is
a condition precedent
Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit on Hilda’s daughter Jackie as the designated beneficiary. Jackie’s rights under the contract will vest
if she demonstrates her consent to the promise at Hilda’s request.
Hilton enters into a contract to erect a fence around Irene’s cattle pasture. When the fence is built, Hilton’s performance will be
complete
Iggy and Jon sign a contract by which Iggy agrees to deliver and install a gas fireplace on October 15 in exchange for Jon’s promise to pay the $500 price within ten days of the install date. The delivery and installation of the fireplace and the payment of the price are examples of
concurrent conditions
Ilene and Jerry enter into a contract under which Ilene agrees to provide groundskeeping services for Jerry’s Family Fun Center. Under an antidelegation clause, the contract can prohibit and prevent the transfer of
all duties under the contract.
