MBEs I got Wrong Flashcards
A client entered into a written contract with his lawyer for the lawyer to provide legal services with regard to the purchase of land. The contract specified that the lawyer was to be paid a flat fee of $2000 for his services prior to completion of the purchase. The lawyer orally assigned his interest in the contract to a third-party landscaper in exchange for services the landscaper had performed for the lawyer. The lawyer then rendered the legal services necessary for the completion of the purchase of the land. Can the third-party landscaper collect the lawyers fee from the client?
No, because the assignment was not in writing.
No, because the contract between the client and the lawyer was for services.
Yes, because the assignment was supported by consideration.
Yes, because the lawyer assigned his interest to the third-party.
In response to a phone query by a manufacturer of fans, a supplier of motors offered to sell the manufacture up to 10,000 motors at the price of $15 each. The supplier assured the manufacturer before ending the call that this price was good for 60 days. one month later, the manufacturer ordered 5000 motors from the supplier. The supplier informed the manufacturer that the price was now $20 per motor. Of the following, which is the manufacturer’s weakest argument that the price is $15 per motor?’
The suppliers assurance of the $15 price was irrevocable for 60 days.
A month is a reasonable time in which to except the offer.
The supplier could reasonably foresee that the manufacturer would rely on the suppliers offer.
The supplier had not revoked its offer.
At an auction without reserves, the auctioneer called for bids for an antique chair. The first bidder, a consumer without specialized knowledge about antique furniture, bid $10,000. Her bid was acknowledged by the auctioneer. A second bidder bid $11,000, which was also acknowledged by the auctioneer. Before the auctioneer announced the sale of the item to the second bidder, she withdrew her bid. The auctioneer then announced that the chair was sold to the first bider for $10,000. Can the first bidder successfully challenge the sale?
Two individuals entered into a written contract for the sale of the moped for $475. The contract required delivery of the moped on July 1 and provided that oral modification of the contract was prohibited. On June 25, the seller called the buyer and asked if the seller could deliver the moped on july 2, explaining that the seller was overseas and could not return until july 2 due to work commitments that he could not change. The buyer agreed. On June 30 the buyer called the seller, informing him that he was disregarding the modification and demanding delivery of the moped on July 1. The seller delivered the moped on july 2, but the buyer refused to accept or pay for it. Has the buyer breached the contract?
Distributor sold a retailer an assortment of tools on credit. Immediately prior to the sale, the distributor, concerned about the retailer’s financial health, telephoned the retailer to ask if the retailer would be able to pay for the tools. The retailer assured the distributor that it was solvent, even though the retailer knew it might not be before it paid for the tools. 12 days after the retailer received the tools, the distributor learned that the retailer was insolvent and immediately sought to reclaim the tools. Can the distributor do so?
In July, a toy store entered into a written agreement with a local supplier for 500 costumes at $25 per costume. Under the agreement, the costumes were to be delivered on or before October 1. On August 17, the supplier told the store that it would not under any circumstances be able to supply the costumes. The next day, the store contracted with a company to supply 500 similar costumes for $30 each for delivery on or before October 5. On September 1, the store filed a complaint against the local supplier for breach of contract. the supplier moves to dismiss the complaint. How should the court rule on this motion?
A buyer agreed in writing to purchase sports memorabilia related to a legendary sports figure, which was on display at a museum, from the owner for $500,000. The agreement called for the payment to be made and the memorabilia handed over at the end of the display., 60 days after the agreement was signed by both parties. 45 days later, a record held by the sports legend was broken and the fair market value of the memorabilia dropped to 275,000. The buyer repudiated the contract. the following week, before the owner could locate another buyer, the memorabilia, on loan for public display, was destroyed by no fault of either the buyer or the owner. the owner had only insured the memorabilia for $100,000. How much is the owner like to likely to recover from the buyer?
Homeowner hired a roofer to install a new roof on his house. The homeowner scheduled the installation to take place during the week when he was to be on vacation. Although the contract specified that the color of the shingles was to be brown, the homeowner returned to find that the roofer instead had installed red shingles. Although the new roof was structurally sound, the homeowner refused to pay the roofer. The roofer sued the homeowner. The factfinder determined that the roofer had materially breached the contract. Under what theory of damages is the roofer most likely to recover?
In need of money, the owner of a ring prepared an email one evening proposing to sell the rain to a friend for $500, but only if he responded within 24 hours. Unable to bring herself to send the email, the owner began drinking. When she was thoroughly intoxicated, she sent the email without realizing it. After the owner sobered up the following afternoon, she called her friend and said that she had never meant to send the email, but her friend informed her that she had already responded by email, agreeing to the transaction. Does a valid contract exist?
A writer sent a four-page synopsis of an idea for a new television series to a Hollywood producer. He sent it in response to an ad for new ideas in an industry publication. He discussed it with the producer’s assistant in a phone call, and mentioned his expectation of compensation. She said, “Well, of course, we always pay for a writer’s work.” She said she would go over it with her boss to see if he liked it. Several months later, the writer saw a casting call for a new series. The plot and characters were nearly identical to those described in his synopsis. He sued the producer for breach of contract. The producer defended by arguing that there was no contract. What is the likely ruling of the court?
This is an example of an implied in fact contract, where the terms are not expressed in words but instead are expressed through conduct and interpretation of the surrounding circumstances. A voluntary acceptance of the benefit of a bargain (taking the idea) is the same as an assent to all the obligations rising under it.
A man went shopping to buy a used car. He found one on a used car lot that was offered “as is.” He looked at it thoroughly. The tag on the window indicated a special 30-point inspection was done on the car. The 30 points included the drive train, the engine, spark plugs, oil, transmission, and numerous other major items. The man put a $1,000 down payment on the car. He took the car to an independent mechanic who told him that the car had been in an accident and had sustained severe damage, including a cracked engine block. The mechanic offered that the dealer must have known of that kind of massive damage. The man tried to return the car and get his down payment back, but the dealer refused, claiming the car was sold “as is,” and all express or implied warranties under the Uniform Commercial Code were disclaimed in the purchase contract. Stuck with a lemon, the man sued the company under a common law fraud theory. The company counterclaimed for the balance of the purchase price. Will the man likely prevail in the litigation against the car dealer?
This is an example of fraud, which is the intentional misrepresentation of a material fact or the knowing failure to reveal material information.
The test for determining if a fact is material for consumer fraud is whether knowledge of the fact would have led the consumer to act differently. The “as is” designation does not hold up in the face of intentional misrepresentation and common law fraud. The purchaser who has been deceived may return the car, rescind the contract and sue in fraud for damages.
A vendor and a purchaser eached signed a memo stating that the vendor agreed to sell and purchaser agreed to purchast a tract of land and that the cotntract should be closed and conveyance made and accepted “by tender of general warranty deed conveying a good and marketable title” on a date specified. The memo signed by the parties contains all the elements deemed essential and necessary to satisfy SOF applicable to the transaction except tha thtere was ommission of a recitation to the agreed upon purchase price. The vendor has refused to perform the contract, and in action by the purchaser for specific performance, the vendor relies on SOF as a defense. If the purchaser offers evidence, in addition to the written memorandum, that the parties discussed and agreed upon a purchase price of 35k just prior to signing, the purchaser should:
Fail, because the price agreed upon is a essential element of the contract and must be in writing.
This is the correct answer because it identifies that the missing price term will render the agreement unenforceable. Contracts for the sale of an interest in land fall within SOF, meaning that they require a writing to be enforceable (unless they are partially performed). In order to satisfy the Statute of Frauds, the writing must specify with reasonable certainty:
- the contract’s subject matter
- the parties identities
- promises (by whom and to whom made) and essential terms and conditions
- the signature of the party to be charged.
While waiting in line to open an account with a bank, a customer read a poster on the bank’s wall that said “New Customers! $25 for 5 minutes. If you stand in line for more than 5 min, we will pay you $25. We like happy customers (this offer may be withdrawn at any time). The customer started timing his wait and just as 5 min was about to pass, the bank manager tore the poster down and annoucned “The $25 stand-in-line promotion is over.” The customer waited in line for ten more minutes before being served.
In the customer’s action against the bank for $25, will the customer prevail
Yes, becuase the bank could not revoke its offer once the customer had commended performance.
The bank’s unilateral offer was irrevocable once the customer started to stand in line. An offer is unilateral if it allows acceptance only by performing the requested act. Here, the bank’s offer of $25 is unilateral since it is only acceptable by actually standing in line for 5 minutes, not by promising to do so. A unilateral offer becomes irrevocable once the offeree begins performance.
As a result, the offer from the bank to the customer became irrevocable the moment the customer got in line. Since the offer was irrevocable, the bank manager’s attempt to revoke it was ineffective. The statement on the sign that “This offer may be withdrawn at any time” has no effect.
In the example where a bank promises to give $25 to customers who wait in line for longer than 5 minutes, why is this not a gift promise?
In order to be enforceable, a contract must be supported by consideration. A party to a contract can provide consideration by either doing something he is not legally obliged to do or by refraining from doing something he is legally permitted to do. There is no requirement that the bargained-for-consideration provide any benefit to the other party.
Here, the customer furnished consideration by standing in line, which he was not obligated to do. As a result, the contract between the bank (promising $25 to customers who waited in line for longer than 5 min) and the customer (standing in line) was binding.
A chef purchased the front portion of the land needed for a restaurant he desired to build and operate, but the back portion was the subject of a will dispute between a brother and his sister. The sister’s attorney advised her that her claim was doubtful. The chef, knowing only that the unresolved dispute existed, agreed in a signed writing to pay the sister 6k payable 1k annually in exchange for a quitclaim deed (a deed containing no warranties) form the sister, who promptly executed such a deed to the chef and received the chef’s first annual payment. Shortly therafter, the probate court handed down a deicison in the brother’s favor, ruling that the sister had no interest in the alnd. This decision has become final. The chef subsequently defaulted when his second annual installment came due.
In an action against the chef for breach of contract, the sister will probably:
Win, because the chef bargained for and received in exchange a quitcalim deed from the sister.
The chef’s promise of payment to the sister was supported by consideration. When the sister issued the quitclaim deed, she was effectively settling–by assigning to the chef–her claim against the property. So the question is whether one who promises to make payment in exchange for the surrender of an invalid claim has recieved consideration. (If the chef didn’t receive consideration in return for his promise, that promise wouldn’t be enforceable).
The answer is that the surrender of the cliam that turns out to be invalid nonetheless consititutes consideration if either 1) the claim is in fact doubtful because of uncertainty as to the facts or the law; or (2) the surrendering party believes that the claim may be valud.
Here (1) was the case becuase the sister’s attorney told her that her claim was doubtful, not that it was definitely invalid. Since the sister’s surrender of the claim in a bargained-for exchange in return for the chef’s prmise of payment constituted consideration, the chef’s promise is enforceable.
If the sister had surrendered a claim that she knew was definitely invalid, that surrender (by issuance of the quitclaim deed) would indeed not be a “legal detriment”— she would not have worsened her legal position. But because waht the sister surredndered was a “doubtful claim” rather than a claim she knew to be invalid, her surrender is deemed to constitute consideartaion.