business homework

1. Jennifer is talking to Brion and verbally agrees to sell him her house and land for $125,000. Brion Agrees because he thinks the house is worth $200,000. The following week Brion gets a written contract from Jennifer but the sale price in the written contract is now $250,000. Brion wishes to enforce the original agreed upon price of $125,000. To be legally correct, you should tell Brion

a.) That the $125,000 price that was agreed to previously is not enforceable under the Statute of Frauds

b.) That Brion can enforce the $125,000 price by taking Jennifer to court

c.) That Brion must first pay the $250,000 but can sue Jennifer for the difference in price (125,000).

d.) That Brion can require specific performance, the sale of the house, because it is a unique item

2. To be an enforceable contract four basic requirements must be met, those are:

A. Assent, Benefit, Control, Capacity

B. Writing, Waiver, Signing, Savior

C. Delivery, Determination, Accord , Satisfaction

D. Offer, Acceptance, Consideration, No Defenses

3. In the Indiana Gazette a Reward is written that says… Lost dog named “Peek-a-chew”, miniature poodle, wearing dog tag with owner name and phone number 555-5555, reward $100. With no prior knowledge of the Ad, “Fred” almost hits a dog on his way home… He pulls over and finds the dog Peek-a-Chew as described. He calls the number and returns the dog to the house. The owner says thank you, but does not offer the reward. Feeling as though he did a good deed, Fred returns home and reads his newspaper, and for the first time, sees the reward Ad. What can Fred legally do now about the situation?

a) Run over the Dog

b) Run over the Owner

c) Sue the owner for the reward

d) nothing

4. Brion is dating a girl named “Julia”. Julia really doesn’t like Brion and is using him for free meals and presents. She cheats on him all the time and really doesn’t even think they are “going out”. Over the course of six 6 weeks since they have met, Brion has paid $500 for meals, $300 in concert tickets, $250 for a crystal music box that plays Phantom of the Opera, $800 for airline tickets in her name, and a whopping $1000 to buy her a new plasma TV. Why… Just because he wanted to make her happy… Sometimes she would “hint”… Gee I would really like to see that concert… Or I wish I had a TV. One week after the plasma TV, she tells Brion she is getting married to her fiancée who she was dating/sleeping with during this entire time. Brion always wondered why she was out of town every other week… and the presence of male deodorant and cologne in her bathroom… and the bizarre phone calls and the time some other guy sent flowers… Ok, anyway…In terms of this situation Brion can legally recover from Julia:

a) $250 Music Box, $1000 TV

b) $250 Music Box, $1000 TV, $800 Airline tickets

c) The value of everything he spent

d) Nothing

e) A little self respect are you kidding me…Go to the post office get a change of address form and put her address in the moving from box and an address in Botswana in the moving To Address…

5. A voidable contract is voidable by:

a) either party

b) only the party who is suffering from the disability (excuse)

c) Only the party who is not suffering from the disability (excuse)

6. Brion gets a credit card offer in the mail. Like most such offers, he doesn't open it up and simply puts it in the trash. Three months later when he gets a $25.00 bill from the credit card company that says he must pay an annual fee as part of his acceptance of the credit card. Brion calls the company to question them and a representative says, “didn't you read the offer we sent you...” He says, no I always throw away offers from your company. Well the lady says, "big mistake". Our offer says "the afore-mentioned addressee who this letter was sent to automatically affirms and accepts all terms and conditions contained in this offer, unless they notify the company within 48 hours of receipt that they do not wish to be a part of this offer." In terms of this situation

a) Brion must pay the $25.00

b) Brion doesn't have to pay the $25.00

7. Brion is studying for the bar exam and there is a special one week bar preparation course that is 100% lecture and costs $1000 dollars. Brion does not have $1000, so he sneaks in the back of the room and merely listens to the lectures. On the 5th day, the lecturer calls on him to answer a question and Brion says, "Oh, I’m just listening". Afterwards, the lecturer checks the registered attendees and not seeing Brion's name sends him a bill for $1000 which is the cost of attending the review course. In terms of this situation:

a) Brion will not have to pay because he never accepted the contract to attend the preparation course

b) Brion will not have to pay because of the statute of frauds

c) Brion will have to pay because attending was acceptance and performance

d) Brion will have to pay because of the parole evidence rule

8. Brion and Dan are talking about their cars when Brion mentions he is thinking about selling his car, a 1996 Ford Explorer for $2500. Dan seems interested and says well I'll think it over. That night Brion decides to sell his car to his best friend for only $2000 and the deal is executed. The next day Dan calls Brion and says, I accept your offer. With respect to this situation which is the best answer?

a) Brion's statement was an illusory offer thus there was no offer to which Dan could accept.

b) Brion's selling of the Explorer to his best friend acted as a revocation of the alleged offer.

c) all of the above

d) none of the above

9. After watching “Fear Factor” Alana challenges her friend Andrea to eat 20 live crawling roaches in return for $100 dollars. Andrea picks up the first roach by the silvery black of its crawling shell and brings the roach tentatively towards her lips. As the antennae tickle her throat and the legs dance on her tongue she bites down and hears the gritty crunch of Roach death followed by a bitter acid like taste that resonates through her mouth and body. Andrea chokes down a swallow and hears Alana through bursts of laughter say, I just made you eat a roach, I revoke my offer. With respect to this situation.

a) Alana can revoke because of a lack of adequate consideration

b) Alana can revoke the offer because Andrea did not substantially perform

c) Alana cannot revoke the offer because the contract was executed

d) Alana cannot revoke the offer because Andrea has started performance and must be given a reasonable time to perform

10. Eddie’s store publishes exactly the following advertisement in the Silver City Morning News on Monday March 12, 1996

Sale March 17th, Brand New Gold plated bowling balls, selling for $80.00 each

7 Mexican ruby necklaces worth $12,500 now selling for $10,000. First come, First serve, limited quantities.

On March 17th, Bob was the first customer in line the minute the store opened and he was the first to arrive at the store and demanded a Mexican ruby necklace. The store clerk told him that it was store policy to offer the merchandise to employees first and one of the employees had already purchased all the Mexican ruby necklaces on March 16th.

If Bob brings suit against Eddie’s store for their refusal to sell him the necklace, Bob will

a) lose since the advertisement was not an offer

b) lose since Bob did not notify the store in writing that he intended to accept the offer

c) win, because the advertisement should be construed as a binding offer

d) win, because of the Statute of Frauds

11. Brion owns The Tennis Racket of Andre Agassi that he used when he first won Wimbledon. Brion is desperate for money and sells the racket on e-Bay to Monica for $1000. When it comes time to Deliver the racket, Brion sends a more advanced and better racket to Monica but one that was never owned by Andre Agassi. In terms of this situation:

a. Monica has no damages because the replacement good was actually better than the contracted goods

b. Monica must send the racket back to Brion, and go out and buy a replacement racket so that she mitigates her damages and she can collect from Brion the difference between what she spent on the racket and the contract price.

c. Monica can get a court order requiring specific performance and delivery of the Andre Agassi Racket.

d. Monica gets nothings because Brion substantially preformed the contract.

12. Tim who has just been injured in a car accident signs up with a law firm run by a famous and well known local attorney William Mattar... "Hurt in a car, call William Mattar". Tim is pleased because William Mattar assured him that his years of trial practice and his personal representation and expertise will help win the case. William Mattar takes payment from Tim but delegates his duty of performance of representation to another lawyer Brion. In terms of this situation:

a) Tim can force performance by William Mattar because duties cannot be delegated under these circumstances

b) Mattar has properly delegated his duties under the contract

c) Does it really matter, A lawyer... is a Lawyer.... is A Lawyer.... is a rat,

d) Brion is an intended third party beneficiary of the contract and can enforce his rights under the contract thus preventing Tim from mandating that Mattar represent him.

a. $1000

b. $1200

c. $200

d. Specific Performance

e. Liquidated Damages of $800

14. When an accountant sells their "uncollectible" accounts receivable (i.e. customers that owe the company money who might not pay), to a debt collection company for 10% of the value of the receivables. They are in essence...

A.) Assigning their rights to collect the debt

B.) Delegating their duties to collect the debt

C.) Making the customer a third party beneficiary to the contract

D.) Doing something illegal

15. The clause represented below is probably best described as:

No Party shall be liable for any failure to perform its obligations where such failure is as a result of Acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or [telephone service], and no other Party will have a right to terminate this Agreement under Clause 19 (Termination) in such circumstances

a) Assignment of Third Party Rights

b) Declaration of Delegation of Duties

c) Force majeure clause

d) A Corli Raff Contract Amendment

16. “Deon” has a contractor build a house and he requests that the house have double pane windows. The contractor builds his house and installs single pane windows. With respect to this situation

A.) The contractor has committed a material breach and Deon can rescind the contract and get all his money back

B.) Deon can destroy the house and charge the contractor for its destruction

C.) The contractor has substantially performed and Deon must mitigate his damages by fixing the problem and charging the Contractor for the extra cost.

D.) None of the above

17. In class we watched the Donald Trump video where he asks Obama to provide him with his original passport application and college applications in return Trump will donate five million dollars to Obama’s favorite charity. In terms of what we watched it can best be said that

a) Trump’s offer would not be considered an offer because no objective reasonable person could consider it an offer.

b) Trump made a valid bilateral offer and Obama could accept simply by responding to Trump yes I will provide those documents

c) Trump made a valid unilateral offer which Obama could accept only by producing the requested documents.

d) Trump did not make an offer because it was not supported by valid consideration

18. Ford has a contract with the US Government to build 500 HumVee Vehicles. In the contract the specifications call for the use of Dunlop brand tires. Ford and the US Government sign the contract. However, the following month the US Government tries to back out of the deal because the war in Iraq has ended and their might not be a need for the HumVee’s anymore. Ford has agreed to let the US Government back out of the deal, but Dunlop refuses to allow the contract to be canceled. With respect to this situation.

a) As long as the two “people” who signed the contract agree to cancel it (Ford and US Government), it will be canceled

b) Ford can agree to cancel the contract because Dunlop is an incidental beneficiary to the contract

c) Ford cannot agree to cancel the contract because Dunlop is a third party intended beneficiary to the contract

d) Ford cannot agree to cancel the contract because Dunlop is a fundamental rights contracting party

e) Dunlop has no right to disagree because they did not sign the contract

19. Farmer Bob has a contract with Viki Vender to buy Corn. The valid contract signed June 1st 2004 says, "Payment of $100 is made today to Viki for shipment of 10 Bushels of Corn to be made on June 30th 2004." On June 15th Viki Vender finds a buyer for her Corn for $200. She sends Bob a letter and check stating, I cannot provide you the corn we contracted for, here is your $100 back. Bob Receives the valid Check and letter on June 16th. The Price of Corn on June 16th is $120 for 10 Bushels. Bob doesn't know what to do, so he waits until the shipment date of June 30th hoping that Viki will change her mind. On June 30th, when Viki doesn't ship the corn, Bob goes out and buys a replacement 10 Bushels of Corn for $180. He wishes now to sue Viki Vender what is the likely result?

a) Bob gets only the $100 check because Viki didn't actually breach the contract until the date of performance had passed.

b) Bob gets the $100 check and $80

c) Bob gets only $80

d) Bob gets the $100 check and $20

e) Bob gets $100 Check and $120

f) Bob Gets the $100 Check and $180

g) Bob gets only $20

20. Mary just turned 16 years old yesterday and decides to spend all her birthday money. She goes to a rental agency and signs a six month rental agreement for a 48 inch color television. She pays $600 upfront, to cover the rental rate of $100 per month for six months. She fills out all the paperwork truthfully including her name, date of birth, and social security number. After three months, she goes back to the rental store, gives them the TV back and says she wants a refund of all her money. The store asks if there is anything wrong with the TV and Mary says, no I just don’t feel like watching TV anymore. The store refuses to give her any money back claiming she breached her written, signed contract. What is the likely result of this situation?

a) Mary will owe the whole $600

b) Mary will owe $300 for the three months she used the TV

c) Mary will owe nothing, she gets the $600 back

d) Mary ratified the contract by using the TV and she will owe $600

21. After this exam, Stefany goes out and gets absolutely “plastered” and does an “all around the world tour of the bar”. A total of 23 Shot concoctions from every country, Tequila, Vodka, and some neon green South American drink called “Anti-freeze”. In her grossly inebriated state, Stefany agrees to sell her brand new 2003 Dodge Viper to Jane, if Jane can Balance a full beer glass on her head while doing the Hokey-Pokey (dance). Jane successfully does the deed and gets the keys to the car. The next morning, Stefany wakes up on the floor of the bar (after all she had no car) and immediately calls Jane to get her car back. With respect to this scenario

a) Jane can keep the car, there was a valid binding contract

b) Jane must give the car back, there was a voidable contract

c) There never was any kind of contract (it was void)

d) There never was a contract because there was no consideration.

e) JANE…. Is LONG…. GONE…. With the Car….

22. Michelle is fascinated with the heavy metal “big hair” bands of the 80’s and decides to form a band called the “Manic Michelle Mashers” (3M for short) and they will perform an all 80’s revival tour. On March 23, 2003, she contacts her friend Kristin who owns a bar called, “Bleached Jeans” and asks to perform at the bar. Kristin says sure, but the first date available to come in would be April 30, 2004. During the conversation, Michelle and her band agree to play at the bar and verbally terms are set for a payment after the performance of $1000 with a concert starting from 11pm-3am. Which of the following is true about this scenario

a) A valid contract exists

b) A valid contract does not exist

23. When a “starving Artist”, with little power such as Billy Joel, first starts their career and is convinced to sign a recording contract that allows them to keep only 2% of the money made from selling albums and concerts, the "starving artist" could best get out of the contract by:

A.) Saying the contract was void as illegal

B.) Saying the contract terms were a unilateral mistake

C.) Saying it is an Unconscionable Contract

D.) Saying that there was a mistake of value because Billy Joel didn’t know at the time of the contract that his songs would sell millions of albums.

24. Luke contracts with Matt to ship 10,000 cases of Red Ripe Tomatoes to his summer home in Florida. The contract states, shipment will be provided by the steamer train. Unfortunately, Matt thought this meant a “steamer” train, a train that is operated by steam power, and Luke thought it meant the very fast “STEAMER” train, a super-sonic high speed electro-magnetic train. The tomatoes are sent by the slower steam powered train and arrive rotten. Luke doesn’t wish to pay. In terms of this situation

a) There is no contract because there is no meeting of the minds

b) This is a mistake of value and thus cannot be rescinded

c) This is a unilateral mistake and cannot be rescinded

d) This is a Fraud and can be rescinded

25. Brion goes to a yard sale at Dan's house and he finds a painting that he hates but likes the frame. Brion buys the painting for $25.00 and takes it home. At home, Brion rips out the painting from the frame and discovers a love letter written between George Washington and Martha Washington. The letter is valued at $3700. Dan finds out about this letter and demands that the purchase be rescinded and the letter be returned because it was a mistake. In terms of this situation:

a) There is no contract because there is no meeting of the minds

b) This is a mistake of value and thus cannot be rescinded

c) This is a unilateral mistake and can be rescinded

d) This is an unconscionable contract and can be rescinded

26. Stefany, 22, graduated from I.U.P. but her family in Vermont misses her and they say to Stefany move back to Vermont and work here and we will provide you with $20,000 to start a new life. With a deal like that Stefany would be a fool to refuse. Stefany says goodbye to her friends here in Indiana, PA and goes back to Vermont. She obtains employment and at first stays with her parents. After six months, she starts asking where her promised 20,000 dollars is. Her parents say, well..here is thing Stefany. Its not going to happen, we cannot afford it. What are Stefany's legal options at this point?

a) None, the cash was a gift and not supported by legal consideration

b) Stefany could sue her parents for breach of contract

c) None, since Stefany's parents had no legal obligation to support Stefany

d) Stefany could sue her parents but her parents could counter sue Stefany for the housing, food and clothes they provided her for the first 18 years of her life.

e) None, Children are prohibited from suing their parents under the Parental Alienation Training and Rehabilitation In Overt Thinking Act

27. Brion goes to The Buffalo Chop House and orders a steak well done for $35.23. Fifteen minutes later the Chef ,while the steak is still cooking, comes out and says the Price is going to be $38.13 because the steak was a little thicker, which is not an abnormal occurrence, and is taking a little longer to cook. If Brion did not want to pay the increase in price his best argument would be

a. The parole evidence rule

b. The Statute of Frauds

c. Preexisting Duty

d. Promissory Estoppel

28. Mike, a Professor, is doing premiere research getting rid of Toe Nail fungus that turns toe nails yellow (ewww) and is actively searching out people with such aliments. While at the gym, Mike discovers someone that has that fungus and says hey, would you like to be a part of my study. The guys says sure I guess. The next day the locker room guy with yellow toe nails goes to Mike, takes the medicine and is cured. The following week Mike sends the guy a bill for $313.23 for the treatment and cure of his toe-nails. With respect to this situation:

a) A valid contract exists because it was performed

b) A valid contract exists because it was for medical services

c) A valid contract does not exist because it was not a "bargained for exchange"

d) A valid contract does not exist because of the parole evidence rule

29. After Brion purchases a new Computer, he also sends in a manufactures rebate coupon for $50.00. Unfortunately, his decimal looks like a comma and they company sends him a check for $5000. Brion cashes the check and spends the money. Later the company asks Brion to pay them for a refund of $4950. Brion asserts a defense that a valid contract exists and it is not his responsibility to ensure the company accurately records the rebates. In terms of this situation

a. Brion will win

b. Brion will lose

30. Questions 30-33 are based on the following fact situation:

Marty Golby was accepted by Nixon School of Law for the fall term of 1991. Several generations of Marty’s family had attended the prestigious law school. On August 14th, at a party to celebrate Marty’s acceptance, his father, Dick Golby, announced to Marty, in the presence of the party attendees, “Son, it’s your obligation to uphold the family tradition of excellence at Nixon. In this regard, if you promise to study a minimum of 5 hours per day, then I shall pay you $1000 for each “A” you achieve during your first; $2500 for each “A” you achieve during your second year and $5000 for each “A” you achieve during your third year. Moreover, I will buy you a baby blue Corvette (car) at the end of the first semester if you promise not to smoke crack cocaine while in law school. Marty replied, “Dad, not only shall I study five hours a day, buy you can order the car today because I promise not to smoke crack as you requested.”

After the first semester, Marty returned home on December 24th and showed his Dad his grade report that indicated that Marty received “A” in three courses. His dad wrote Marty a check for $3000. Mr. Golby (the father), then asked in the presence of Marty’s uncle Homer, “Did you abide by your promise not to smoke crack?”. Marty replied, “yes, father.”. Marty’s father then told Marty that he had already ordered the car and that it would be available for delivery within one month. Uncle Homer then said to Marty, “Marty, I want you to know if anything ever happens to your father, that I will continue to pay you as per your father’s promise, for your any “A” earned at Nixon.

When Marty returned to Nixon the following week, he received tragic news that his father had died suddenly. At Mr. Golby’s funeral, the executor of his estate told Marty that he was not going to give Marty the car. In addition, Uncle Homer approached Marty and told him that he did not believe he would be obligated to pay Marty for any A’s which Marty may receive in the future.

30. The most accurate statement concerning Mr. Golby’s promise to reward Marty for achieving A’s at law school would be that

a.) The promise constituted an unenforceable conditional gift

c.) The promise would be enforceable if a bargained for exchange was so intended

d.) The promise constituted a voidable promise

31. In a law suit against the executor of Mr. Golby’s estate to recover the New car (Corvette) for breach of his father’s oral agreement, Marty will

a.) Succeed (get the car), since Marty gave up something of legal value as consideration

b.) Not succeed, since Mr. Golby’s promise was not reduced to writing

c.) Not succeed, since Mr. Golby’s promise was only a conditional gift

d.) Not succeed, because Marty was not giving up something of legal value as consideration.

32. Uncle Homer’s December 24th, promise to Marty with respect to achieving A’s at Nixon would constitute

a.) An enforceable, promise binding uncle Homer as a surety

b.) An unenforceable promise because Marty’s father had a pre-existing duty to pay Marty

c.) A voidable promise as violating the Statue of Frauds

d.) A void promise

33. Assume for this question only, that during Marty’s first semester at Nixon law school, Marty’s romantic involvement with his girlfriend Louise, resulted in her pregnancy. Louise demanded that Marty furnish child support for the baby. As a result Marty agreed to assign to Louise his right to payment for all “A” which he might receive during his three years at Nixon law school. Marty studied diligently and received four A’s during his first semester. Marty sought payment for the grades from his father (who is alive in this question), and told him that he assigned his right to receive payment to Louise. When Marty’s father refused to honor the assignment, Louise brought suit against Mr. Golby for breach of contract. The court should enter judgment for

a.) Mr. Golby

b.) Louise

By not completing the last four sweat suits, fashion saved $2000. Fashion sold the remaining special blend for $100.

Fashion sued “x” for breach of contract. X argued that Fashion is not entitled to win because (1) an enforceable contract between “x” and fashion coordinates did not exist, and (2) Fashion is not entitled to recover damages because it breached the contract by not delivering the sweat suits by October 16th.

To assist in your answers I have provided the following provisions of the uniform commercial code for your review:

Section 2-201(1):

When the Statute of frauds applies, there must be a writing sufficient to indicate that a contract of sale has been made between the parties and signed by the party against whom enforcement is sought.”

Section 2-615(a): delay in delivery by a seller is not a breach of his duty if performance has been made impracticable by the occurrence of an event where no one thought such event would occur and was a basic assumption of the contract.”

You have been asked to prepare a written response on the following questions:

1. Was there an enforceable contract (one that has the four elements of a contract) for the sale of sweat suits between fashion Coordinates and X? WHY or WHY NOT? Ie what is there and what is missing specifically?

2. What is the role of whether the contract was signed? Why is that important?

3. Is there any importance to the fact that these sweat suits were specially manufactured? Why or Why not? What role does this play in whether there was a contract?

4. Did the non-delivery of the suits by October 16 constitute a breach of contract that would prevent Fashion from obtaining damages. Why or why not?

5. What kind of contract clause could be inserted into the contracts above that would have protected the basketball team owner from having to pay for the suits when his players went on strike?

6. How would the damages of Fashion be calculated? In your answer use these catagories resale price, contract price, shipping costs, manfucatring expense saved, and actually compute the final damages.

ESSAY TWO 20% OF EXAM SCORE.

Seattle Man Loses in Battle With Pepsi for Harrier-Jet Prize The Wall Street Journal, August 9, 1999. John D.R. Leonard took PepsiCo seriously when one of their "Pepsi stuff" commercials made an offer of a Harrier jet, the famous high-tech "jump jet" used by the U.S. Marines . In a TV commercial that aired in 1995, Pepsi jokingly included the Harrier as one of the prizes that could be received with a "mere" 7 million Pepsi points. While that sounds like a lot of points to get from drinking Pepsi products (roughly 190 Pepsis a day for 100 years), the company also allowed customers to purchase points for 10 cents a piece. Leonard did the math, and discovered that the cost of the 7 million points needed for the jet was a mere $700,000. He then put together a business plan, raised the $700,000 from friends and family, and submitted 15 Pepsi points, the check, and an official order form along with a demand for the Harrier jet. PepsiCo wrote back, stating: "The Harrier jet in the Pepsi commercial is fanciful and is simply included to create a humorous and entertaining ad. We apologize for any misunderstanding or confusion that you may have experienced and are enclosing some free product coupons for your use." The free coupons did not satisfy Leonard, who then took PepsiCo to task in court. Finally, on August 5, 1999, a federal judge for the Southern District of New York held that PepsiCo was only joking when it implied in its ad that it was giving away fighter jets. Judge Wood noted that since the jets sell for approximately $23 million each, "no objective person could reasonably have concluded that the commercial actually offered consumers a Harrier jet." Instead, this was a classic example of "a deal too good to be true." If you wish to find out more about this case (and the rationale underlying Judge Wood's decision) you can view the entire opinion and order from the web site of the Southern District of New York's CourtWeb On-line Rulings Information System. (Note: You must have a copy of Adobe's Acrobat Reader installed on your computer to view this document.) Questions are on next page

1. What are the elements of a valid contract? What elements were present here and which were not? Specifically what if any defenses might exist to the formation or enforcement of the contract? 2. Describe the objective theory of contracts. How does that theory apply to this case? 3. Why do you think the court held that there was not a valid agreement here? 4. Are advertisements generally considered offers? Why or why not? 5. How does this case differ from a reward situation, where a unilateral contract is formed upon completion of the requested act?