Formation of Contracts Flashcards
Can Summer sue Rick if (1) Rick promised to give her $500 for her education b/c Summer’s laptop was stolen, (2) Summer bought a spring break travel package for $500 instead, (3) Rick rescinded his offer?
No - Rick’s repudiation didn’t result in any injustice to Summer - even though (1) arguable whether Summer’s purchase is foreseeable to Rick, (2) it isn’t debatable that Summer was induced by the promise, (3) there is nothing showing that Summer suffered injustice
Can Moe sue a manufacturer if (1) Moe bought an industrial freezer after the retailer recommended it, (2) manufacturing defect caused the freezer to malfunction, (3) Moe’s inventory thawed unexpectedly and spoiled?
Yes - the freezer needed to adequately perform its ordinary purpose, making the retailer liable for breach of warranty of merchantability - this applies even though Moe himself is a merchant b/c only the seller needs to be a merchant for this to apply
Can Homer sue Ned to enforce a payment of $200K if (1) Ned was the guide for their hike, (2) he fastened clip to side, but clip gave way and he fell, almost killing both himself and Homer, (3) Ned offered and Homer accepted $200K for saving Ned’s life and promising not to sue, (4) Homer believed he had a good chance of winning, (5) turns out Homer never had a chance of winning b/c clip malfunction was due to manufacturing defect?
No - promise not to bring action doesn’t need to be one that will certainly win - just needs to be either (1) that it is in fact doubtful that Ned was negligent, OR (2) Homer had good faith belief that Ned was negligent - this OR is important b/c it means that even if Homer had no chance of winning, a delusional good faith belief would still be considered valid consideration
Can Moe sue Luanne for the remaining $150 if (1) Luanne hired Barney to be a clown to entertain the children at Milhouses’ wedding, (2) Luanne promised to pay off $400 that Barney owed Moe as compensation, (3) Barney in a clown costume ending up scaring the kids at the party, (4) b/c of this, Luanne refused to pay Moe despite Moe continuing to demand payment, (5) Luanne eventually offered Moe a watch for $250, which Moe accepted, but sued Luanne for the other $150 anyway?
No - Moe already accepted the watch - they created an accord b/c Moe agreed to accept a different performance (the watch) instead of the $400 in satisfaction of Luanne’s duty - different performance or foregoing a defense are both ways that would have made Moe’s accord and satisfaction enforceable
Why can Roger Meyers Jr. enforce specific performance against Krusty Studios if (1) Krusty agreed to rent a studio to Roger for $3K a month, (2) amgt also included option that Meyers can buy the studio before end of agreement, (3) Krusty also promise to add new equipment to agmt but this was never added, (4) before rental end, Meyers refurbished studio, (5) he tried to exercise option by paying $100K but Krusty refused?
The terms of the option were too indefinite - for Meyers’ option to be effective under common law, it needed to have (1) names of Meyers and Krusty, (2) studio purchase subject matter, (3) price and (4) quantity of one studio - here there was no designation of which studio, nor the price - however, no consideration for the option is separately needed since the option was part of the original deal
Can Butters rescind the contract to buy stock of a company from Cartman if (1) Cartman hoping to sell his stock in a company told Butters that the value of the stock would increase dramatically in the next three years, (2) Neither Cartman nor Butters had specific knowledge of the company, (3) Butters nevertheless, reasonably believed that Cartman had such knowledge, (4) Butters didn’t investigate but instead relied on Cartman’s statement to buy the stock?
Yes - Cartman’s statement is a false assertion about the company’s current financial situation - he is liable for fraudulent misrepresentation b/c (1) he said the price would increase dramatically while reckless about the truth of this statement, (2) he intended to mislead Butters, (3) Butters was induced to enter into the contract, (4) Butters justifiably relied on the misrepresentation - normally statement about future situation is an opinion, this was a prediction about a future situation that was based on purported current knowledge - this didn’t need to be material though b/c Butters can rescind the contract regardless of whether it was material
