R5 M3 - Contracts: Part III

Question 1

What makes a contract legally enforceable?

Answer 1

You need to meet all the three requirement for a contract to be enforceable.

• An offer must be made and accepted
• Something must be exchange ( money for service, exchange of goods)
• No defense ( meaning that nobody was forced , influence , put under duress to sign a contract)

Question 2

What is an express contract vs implied in fact contract?

Answer 2

An express contract is a contract that can be done orally or in writing.

Implied in fact contract is a contract formed by conduct (nobody says anything and nothing is written).

For example: You visit the doctor it is assumed that you are sick and he may prescribe you medicine.

Question 3

Modification of a sales contract under the uniform commercial code?

Answer 3

If a sale contract has been modified, it is the contract as it has been modified that determines whether it has to be written or not.

Example:

I signed a contract for $540 and I asked that the price be reduced in good faith to $480. The modification is done without a writing because the contract is below $ 500 or more.

Three Statute of Frauds that require a written contract would be:

-Section R5 M2: Contracts: Part II

1. Contracts for the sales of goods for $500.00 or more
2. Contracts which by their terms can’t be performed in a year.
3. Contracts by an executor or representative to pay estate debt out of personal funds.

Question 4

Grill deals in the repair and sale of new and used clocks. West brought a clock to Grill to be repaired. One of Grill’s clerks mistakenly sold West’s clock to Hone, another customer. Under the Sales Article of the UCC, will West win a suit against Hone for the return of the clock?

A.	Yes, because Grill could not convey good title to the clock.

B.	No, because Grill is a merchant to whom goods had been entrusted.

C.	No, because the clerk was not aware that the clock belonged to West.

D.	Yes, because the clerk was negligent in selling the clock.

Answer 4

Choice “B” is correct. Generally, a person cannot pass on better title than the person has. However, if the owner of goods entrusts them to a merchant who deals in goods of that kind, and the merchant sells them in the ordinary course of the merchant’s business, then the merchant has the power to transfer title to the goods. West was the owner of the clock, and he entrusted the clock to Grill, who deals in new and used clocks. Grill sold the clock to Hone in the ordinary course of business. Thus, Grill had the power to pass on good title to the clock and did so when one of Grill’s clerks mistakenly sold the clock to Hone. Because Hone has title to the clock, West cannot recover it from Hone. However, West does have an action for damages against Grill.

Choice “A” is incorrect. As discussed above, a seller can convey better title than he has under the entrustment doctrine, which applies under the facts here.

Choice “C” is incorrect. Although “C” gives the correct result, it is irrelevant whether or not the clerk was aware that the clock belonged to West.

Choice “D” is incorrect. It is irrelevant whether the clerk was negligent.

Question 5

Method of contract formation:

Answer 5

Unilateral Contract