Illustrations (58- 87)

Question 1

A offers to sell a book for B for $5 and states that no other acceptance will be honored by the mailing of B’s personal check for exactly $5. B personally tenders $5 in legal tender, or mails a personal check for $10.

Answer 1

There is no contract (58. Necessity of Acceptance Complying with Terms of Offer)

Question 2

A offers to pay B $100 for plowing Flodden field, and states that acceptance is to be made only by posting a letter before beginning work and before the next Monday noon. Before Monday noon B completes the requested plowing and mails to A a letter stating that the work is complete.

Answer 2

There is no contract (58. Necessity of Acceptance Complying with Terms of Offer)

Question 3

A makes an offer to B, and B in terms accepts but adds, “This acceptance is not effective unless prompt acknowledgement is made of receipt of this letter.”

Answer 3

There is no contract, but a counter-offer (59. Purported Acceptance Which Adds Qualifications)

Question 4

A makes a written offer to sell B a patent in exchange for B’s promise to pay $10,000 if B’s adviser X approves the purchase. B signs the writing in a space labelled “Accepted:” and returns the writing to A.

Answer 4

B has made a conditional promise and an unconditional acceptance. There is a contract, but B’s duty to pay the price is conditional on X’s approval (59. Purported Acceptance Which Adds Qualifications)

Question 5

A makes a written offer to B to sell him Blackacre. By usage the offer is understood as promising a marketable title. B replies, “I accept your offer if you can convey me a marketable title.”

Answer 5

There is a contract (59. Purported Acceptance Which Adds Qualifications)

Question 6

A offers to sell B 100 tons of steel at a certain price. B 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 6

There is a contract, but A is not bound to deliver the installments (61. Acceptance Which Requests Change of Terms)

Question 7

A offers to sell specified hardware to B on stated terms. B replies: “I accept your offer; ship in accordance with your statement. Please send me also one No. 5 hand saw at your list price.”

Answer 7

The request for the saw is a separate offer, not a counter-offer (61. Acceptance Which Requests Change of Terms)

Question 8

A offers to buy cotton from B, the operator of a cotton gin, B to accept by specifying the number of bales in a telegram sent before 8 p.m. the same day. B duly sends a telegram of acceptance and ships the cotton, but the telegram is not delivered.

Answer 8

There is a contract, and A is bound to take and pay for the cotton (63. Time When Acceptance Takes Effect)

Question 9

A mails to B an offer to lease land, stating, “Telegraph me Yes or No. If I do not hear from you by noon on Friday, I shall conclude No.” B duly telegraphs “Yes,” but the telegram is not delivered until after noon on Friday.

Answer 9

Any contract formed by the telegraphic acceptance is discharged (63. Time When Acceptance Takes Effect)

Question 10

A mails an offer to B to appoint B A’s exclusive distributor in a specified area. B duly mails an acceptance. Thereafter B mails a letter which is received by A before the acceptance is received and which rejects the offer and makes a counter-offer. On receiving the rejection and before receiving the acceptance, A executes a contract appointing C as exclusive distributor instead of B.

Answer 10

B is estopped to enforce the contract (63. Time When Acceptance Takes Effect)

Question 11

A sends B by mail an offer dated from A’s house and states as a condition of the offer that an acceptance must be received within three days. B mails an acceptance which reaches A’s house and is delivered to a servant or is deposited in a mail box at the door within three days; but A has been called away from home and does not personally receive the letter for a week.

Answer 11

There is a contract (68. What Constitutes Receipt of Revocation, Rejection, or Acceptance)

Question 12

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

Answer 12

B is bound to pay the price of the course (69. Acceptance by Silence or Exercise of Dominion)

Question 13

A offers by mail to sell to B a horse already in B’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 acceptance.” B replies by return mail, saying: “I accept your offer.”

Answer 13

There is a contract (69. Acceptance by Silence or Exercise of Dominion)

Question 14

A offers by mail to sell to B a horse already in B’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 acceptance.” B makes no reply, but he does not intend to accept.

Answer 14

There is no contract (69. Acceptance by Silence or Exercise of Dominion)

Question 15

A offers by mail to sell to B a horse already in B’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 acceptance.” B makes no reply and remains inactive with the intention of thereby expressing his acceptance.

Answer 15

There is a contract (69. Acceptance by Silence or Exercise of Dominion)

Question 16

A, through salesmen, has frequently solicited orders for goods from B, the orders to be subject to A’s personal approval. In every case A has shipped the goods ordered within a week and without other notification to B than billing the goods to him on shipment. A’s salesman solicits and receives another order from B. A receives the order and remains silent. B relies on the order and forebears to buy elsewhere for a week.

Answer 16

A is bound to fill the order (69. Acceptance by Silence or Exercise of Dominion)

Question 17

A offers to buy a book owned by B and to pay B $10 in exchange therefor. B accepts the offer and delivers the book to A.

Answer 17

The transfer and delivery of the book constitute a performance and are consideration for A’s promise. See Uniform Commercial Code §§ 2-106, 2-301. This is so even though A at the time he makes the offer secretly intends to pay B $10 whether or not he gets the book, or even though B at the time he accepts secretly intends not to collect the $10 (71. Requirement of Exchange; Types of Exchange)

Question 18

A receives a gift from B of a book worth $10. Subsequently A promises to pay B the value of the book.

Answer 18

There is no consideration for A’s promise. This is so even though B at the time he makes the gift secretly hopes that A will pay him for it. (71. Requirement of Exchange; Types of Exchange)

Question 19

A promises to make a gift of $10 to B. In reliance on the promise B buys a book from C and promises to pay C $10 for it.

Answer 19

There is no consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 20

A desires to make a binding promise to give $1,000 to his son B. Being advised that a gratuitous promise is not binding, A writes out and signs a false recital that B has sold him a car for $1,000 and a promise to pay that amount.

Answer 20

There is no consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 21

A desires to make a binding promise to give $1,000 to his son B. Being advised that a gratuitous promise is not binding, A offers to buy from B for $1,000 a book worth less than $1. B accepts the offer knowing that the purchase of the book is a mere pretense.

Answer 21

There is no consideration for A’s promise to pay $1,000 (71. Requirement of Exchange; Types of Exchange)

Question 22

A offers to buy a book owned by B and to pay B $10 in exchange therefor.

Answer 22

B’s transfer and delivery of the book are consideration for A’s promise even though both parties know that such books regularly sell for $5 and that part of A’s motive in making the offer is to make a gift to B (71. Requirement of Exchange; Types of Exchange)

Question 23

A owns land worth $10,000 which is subject to a mortgage to secure a debt of $5,000. A promises to make a gift of the land to his son B and to pay off the mortgage, and later gives B a deed subject to the mortgage.

Answer 23

B’s acceptance of the deed is not consideration for A’s promise to pay the mortgage debt (71. Requirement of Exchange; Types of Exchange)

Question 24

A and B agree that A will advance $1,000 to B as a gratuitous loan

Answer 24

B’s promise to accept the loan is not consideration for A’s promise to make it. But the loan when made is consideration for B’s promise to repay (71. Requirement of Exchange; Types of Exchange)

Question 25

A promises B, his nephew aged 16, that A will pay B $1,000 when B becomes 21 if B does not smoke before then.

Answer 25

B’s forbearance to smoke is a performance and if bargained for is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 26

A says to B, the owner of a garage, “I will pay you $100 if you will make my car run properly.”

Answer 26

The production of this result is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 27

A has B’s horse in his possession. B writes to A, “If you will promise me $100 for the horse, he is yours.” A promptly replies making the requested promise.

Answer 27

The property in the horse at once passes to A. The change in ownership is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 28

A promises to pay B $1,000 if B will make an offer to C to sell C certain land for $25,000 and will leave the offer open for 24 hours. B makes the requested offer and forbears to revoke it for 24 hours, but C does not accept.

Answer 28

The creation of a power of acceptance in C is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 29

A mails a written order to B, offering to buy specified machinery on specified terms. The order provides “Ship at once.”

Answer 29

B’s prompt shipment or promise to ship is consideration for A’s promise to pay the price (71. Requirement of Exchange; Types of Exchange)

Question 30

A promises B to guarantee payment of a bill of goods if B sells the goods to C.

Answer 30

Selling the goods to C is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 31

A makes a promissory note payable to B in return for a payment by B to C.

Answer 31

The payment is consideration for the note (71. Requirement of Exchange; Types of Exchange)

Question 32

A, at C’s request and in exchange for $1 paid by C, promises B to give him a book

Answer 32

The payment is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 33

A promises B to pay B $1, in exchange for C’s promise to A to give A a book

Answer 33

The promises are consideration for one another (71. Requirement of Exchange; Types of Exchange)

Question 34

A promises to pay $1,000 to B, a bank, in exchange for the delivery of a car by C to A’s son D

Answer 34

The delivery of the car is consideration for A’s promise (71. Requirement of Exchange; Types of Exchange)

Question 35

In consideration of one cent received, A promises to pay $600 in three yearly installments of $200 each.

Answer 35

The one cent is merely nominal and is not consideration for A’s promise (79. Adequacy of Consideration; Mutuality of Obligation)

Question 36

A owes B $100 and the claim is not yet barred by the statute of limitations. A promises B in a signed writing to pay the debt.

Answer 36

The promise is binding, and the statute of limitations will not bar the claim for the statutory period after the making of the new promise (82. Promise to Pay Indebtedness; Effect on the Statute of Limitations)

Question 37

A owes B three debts of $500 each. All of the debts are barred by the statute of limitations. A writes to B, “I promise to pay you one of those $500 debts which I owe; the other two I shall not pay.”

Answer 37

A’s promise of $500 is binding (82. Promise to Pay Indebtedness; Effect on the Statute of Limitations)

Question 38

A is indebted to B on a judgment, which is barred by a twelve-year statute of limitations, and makes a written promise to B to pay the debt.

Answer 38

The subsequent promise does not revive the judgment, but may be the basis of an action (82. Promise to Pay Indebtedness; Effect on the Statute of Limitations)

Question 39

A owes B $500, and writes B “I cannot pay you now, but I will never set up the statute of limitations against your claim.” B delays bringing an action to collect his claim until more than the statutory period from the time of A’s promise not to set up the statute has expired.

Answer 39

A may then successfully assert the bar of the statute (82. Promise to Pay Indebtedness; Effect on the Statute of Limitations)

Question 40

A owes B $100 and is about to go into bankruptcy. Immediately before filing his petition he promises B to pay the debt in spite of any discharge that he may get in bankruptcy.

Answer 40

The promise is not binding but would have been binding if it had been made after the petition in bankruptcy was filed (83. Promise to Pay Indebtedness Discharged in Bankruptcy)

Question 41

A owes B $100, and the debt is discharged in A’s bankruptcy. Thereafter A promises in writing to pay the debt “as soon as I sell the mill.” Two years later A sells the mill.

Answer 41

B can recover the debt from A by an action brought within the period fixed by the statute of limitations after the sale. If the subsequent promise were oral, B would be limited in most States to an action within the statutory period after the original debt became due (83. Promise to Pay Indebtedness Discharged in Bankruptcy)

Question 42

A contracts to build a house for B for $50,000 according to specifications furnished by B. A builds the house according to the specifications.

Answer 42

A’s duty to build the house is discharged (235. Effect of Performance as Discharge and of Non-Performance as Breach)

Question 43

A contracts to build a house for B for $50,000 according to specifications furnished by B. A builds the house according to the specifications except for an inadvertent variation in kitchen fixtures which can easily be remedied for $100.

Answer 43

A’s non-performance is a breach (235. Effect of Performance as Discharge and of Non-Performance as Breach)

Question 44

A contracts to build a house for B, for which B promises to pay $50,000 in monthly progress payments equate to 85% of the value of the work with the balance to be paid on completion. When A completes construction, B refuses to pay the $7,500 balance claiming that there are defects that amount to an uncured material breach.

Answer 44

If the breach is material, A’s performance is not substantial and he has no claim under the contract against B, although he may have a claim in restitution. If the breach is not material, A’s performance is said to be substantial, he has a claim under the contract against B for $7,500, and B has a claim against A for damages because of the defects (237. Effect on Other Party’s Duties of a Failure to Render Performance)

Question 45

A gives emergency care to B’s adult son while the son is sick and without funds far from home. B subsequently promises to reimburse A for his expenses.

Answer 45

The promise is not binding under this Section (86. Promise for Benefit Received)

Question 46

A lends money to B, who later dies. B’s widow promises to pay the debt.

Answer 46

The promise is not binding under this Section (86. Promise for Benefit Received)

Question 47

A finds B’s escaped bull and feeds and cares for it.

Answer 47

B’s subsequent promise to pay reasonable compensation to A is binding (86. Promise for Benefit Received)

Question 48

A saves B’s life in an emergency and is totally and permanently disabled in doing so. One month later B promises to pay A $15 every two weeks for the rest of A’s life, and B makes the payments for 8 years until he dies

Answer 48

The promise is binding (86. Promise for Benefit Received)

Question 49

A leases a farm to B and later gives B an “option” to buy the farm for $15,000 within five years. With A’s approval, B makes permanent improvements in the farm buildings, builds roads, drains and dams, and contours plow land, using his own labor and expending several thousand dollars. Toward the end of the five years, A purports to revoke the option, demanding a higher price. B then gives written notice of acceptance in accordance with the terms of the offer.

Answer 49

Specific performance by A may be decreed (87. Option Contract)