Quiz 2 Flashcards
Lou sends a letter to his niece Mary saying that he will give her $5,000 if she does not smoke before she is 25. Mary complies, but Lou refuses to pay her the money. Lou says there was no consideration for his promise. If Mary were to sue for breach of contract, how would the court rule?
There was a contract because the promise to not smoke was consideration
Kemal, who is 60 years old and in good health, makes a verbal offer to his nephew Rakin, asking that Rakin take care of Kemal for the rest of Kemal’s life. In return, Kemal will pay Rakin $15,000 per year, plus all of his living expenses. Rakin agrees. If nothing reflecting this agreement is written down, is there an enforceable contract?
Yes, because it could be performed in less than one year
Which of the following is not one of the elements required to form a contract?
Conditions
What are general damages?
The harm that naturally flows from a breach of contract
Larry’s Corner Grocery has replaced its office equipment, and is selling the old equipment. Crystal buys a computer from the store for $450 in cash. Nothing is written down about the transaction. Although the computer worked fine when she tested it at the store, shortly after Crystal starts using it at home, it stops working. Crystal learns that the hard drive is damaged beyond repair. Can Crystal pursue Larry’s Corner Grocery for breach of warranty under Article 2 of the Uniform Commercial Code?
No, because the store was not a merchant
Leroy owns a rare antique oboe, worth $10,000. His friend Floyd says he is interested in purchasing it for that price. Leroy agrees, and he and Floyd draw up an agreement to make the sale. Floyd says that he will give Leroy a check the next day, and will take the oboe at that time. After Floyd leaves, Leroy’s friend Eustace comes by and says he will pay $12,000 for the oboe. Leroy agrees. Floyd comes by the next day, and is told the oboe has been sold to Eustace. If Floyd were to sue for breach of contract, what would his damages be?
$0; however, Leroy would be ordered to sell the oboe to Floyd
Omar tells Clara that he will pay her $500 if she sinks five free-throws in a row. Without saying anything, Clara picks up a basketball, steps up to the free-throw line, and easily sinks five free-throws. Omar then says, “Too bad! You never said you accepted my challenge!” Has Omar breached a contract with Clara
Yes, because she accepted the offer by making the free throws
What are liquidated damages?
An amount of damages agreed upon in advance
What are the five required elements of every contract?
Offer, acceptance, consideration, capacity, and legality
Mae and Rocco make a verbal agreement for Mae to buy Rocco’s house for $250,000. Mae asks if Rocco can give her something in writing so she can apply for financing, and Rocco gives her a signed letter that says “I hereby agree to sell my house at 1164 Morning Glory Circle to Mae.” The next day, Rocco gets an offer from Charlie, who is willing to pay $300,000 for the house. If Rocco sells the house to Charlie instead of Mae, will he be breaching a contract?
No, because the written agreement,met does not satisfy the Statue of Frauds
Emma agrees to buy a truck and some equipment from Martha. They agree on a total price of $16,000 for everything. Emma writes up the agreement to say she will purchase “one pickup truck, $15,000, one log splitter, $500, one air compressor, $500, total $17,000.” After the agreement is signed, Martha demands payment of $17,000. Emma refuses. If the dispute should go to court, what would a court do with this agreement?
The court should reform the agreement to reflect a price of $16,000
Juan agrees to paint Eva’s house for $1,000. When he is halfway through, Eva tells him that she has changed her mind, and doesn’t want the house painted after all. Juan goes ahead and finishes the job. Eva refuses to pay. If Juan sues for breach of contract, what will the court award him?
The cost of the work done when Eva told him to stop
An advertisement is an enforceable offer if:
The advertisement is clear and definite with no room for negotiation
Unless an offer states otherwise or the person making the offer revokes it, an offer remains open:
A reasonable period of time
Steve offered to give Christie five piano lessons for $20 per lesson. Christie responded that she would agree to that arrangement if Steve would include an additional three guitar lessons at no additional cost. Christie’s response is:
A counteroffer
Dave and Pat entered into a valid contract for Dave to build an in-ground swimming pool on Pat’s property. About one week before the agreed start date, Dave finds a more profitable job and notifies Pat that he will no longer be able to install her pool. Which of the following statements is true?
Dave’s conduct is an anticipatory breach of his contract with Pat as of the date he notifies Pat he will not install her pool
During a very mild fall, Dave and Pat entered into a valid contract for Dave to build an in-ground swimming pool on Pat’s property. About one week before the agreed start date, the weather suddenly changes, below zero temperatures freeze the ground solid, and an early blizzard shuts down the roads and delays the delivery of necessary supplies. Dave notifies Pat that because of the unexpected bad weather, it is not possible for him to install her in-ground pool until spring. Which of the following statements is true?
Dave is likely to be able to raise the defense of impossibility, excusing him from not completing the contract as drafted
Jessie entered into a valid contract with Bill for Bill to drill a new, deeper well at Jessie’s cabin in northern Wisconsin in order to access a cleaner water supply. Once Bill started the project, he found solid bedrock right below the existing well. Bill knew he could still drill through that rock, but the job was going to take more time and be more difficult than he had assumed when he entered into the contract. Bill decides not to make the second well deeper than the existing one. Which of the following statements is true?
Bill’s failure to perform the contract as agreed will not be excused merely because the job is more difficult than he originally believed
Expectation damages usually:
Include the monetary amount of the benefit that would have been received if the contract had been performed as agreed, reduced by the amount that is saved because the non-breaching party was not required to perform
Damages that are based on the amount a non-breaching party spent to perform a contract based on the expectation of the other party’s performance of his or her obligations are:
Reliance damages
A contract will be unenforceable if:
A statue declares such a contract illegal
Angela promises to work for Barbara during the month of July, and Barbara promises to pay Angela $600 for her services, what kind of contract has been made?
Bilateral
Which if the following is an essential element of fraud?
Misrepresentation of material fact
Clyde received the following letter from Joe: “I will sell you the books you examined yesterday for $10 each or $100 for the entire set.” Clyde, not sure he would get much use from the books, told his brother, Michael, about the offer. Michael tendered Joe $100 for the books, but Joe refused to sell the books to Michael. If Michael sued Joe, the court would probably hold that Michael:
Cannot accept the offer because it was not made to him
Jorge owes his neighbor Leon $500 for helping him prepare the income taxes for his home business. Jorge does not deny owing the money, but for one reason or another he has not paid. Leon has started to step up efforts to get his money. He sends Jorge postcards asking when he will be paid, he telephones him every other evening as soon as Jorge gets home from work, and every time Leon sees Jorge he asks politely if he would like to set up a payment plan. Is Leon violating the Fair Debt Collection Practices Act (FDCPA)?
No, because Leon is collecting his own debt
Jake lost his wallet and put an ad in the online student newspaper saying “Lost wallet. Reward $100. Call Jake.” Melanie, a classmate of Jake’s, saw the ad, and spent two days looking for the wallet, missing three classes. Jake later found his wallet in the student parking lot. When Jake found out about all the work Melanie had done, he thanked her, but didn’t give her $100 or anything for her troubles. Which of the following is true of this situation?
Jake offered a unilateral contract, and Melanie is entitled to nothing because she did not perform.
Diana meets Lyrick at a party and is instantly taken with her. The feeling is not mutual, but Lyrick does not want to hurt Diana’s feelings. She tells her that she has to run, “but I’ll call you next week.” Diana does not believe her, so Lyrick says she will give Diana the necklace she is wearing if she doesn’t call by Thursday. Does Lyrick’s promise create a security interest in the necklace?
No, because value was not given
Hipster Bicycles ordered 10,000 bicycle wheels from Bicycle Wheels Incorporated (BWI) with delivery to be made on October 30. These wheels will be used by Hipster to meet the bicycle demand for the upcoming holiday season. Under which circumstance may Hipster claim that BWI has made an anticipatory repudiation of the contract?
Sole manufacturing plant burned down, but CEO says they will rebuild and honor contract.
Skip rented a car from Trusty Rentals for $50 a day for five days total. When he arrived at the Trusty, they were out of usable cars. Skip had to use the only other rental place in town, Super Rentals, and pay $90 per day for the five days. If Skip sues Trusty for damages and wins
$200 compensatory damages
Kirsten entered into a contract with Brando to remodel Brando’s kitchen by June 1st, as he was putting his house on the market. The contract specifically states that the job was to be completed by June 1st. Kirsten completed the remodeling on June 5th. Max has suffered no loss due to the delay, as no prospective buyers came out to see his house in the first week it was on the market. The job was otherwise done exactly to all contract requirements and specifications. If Brando sues Kirsten for breach of contract due to the missed completion date and if the courts were to award damages, what type of damages would most likely be awarded?
Nominal damages
