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a. Carson Corp., a retail chain, asked Alto Construction to fix a broken window at one of Carson's stores. Alto offered to make the repairs within 3 days at a price to be agreed on after the work was completed. A contract based on Alto's offer would fail because of indefiniteness as to the

rice involved.

b. Certain contracts have absolutely no effect and are not recognized under law. If two or more parties enter into such an agreement, it is

void.

c. Cesare offers to sell a gram of arsenic to Lucrezia for $50. Lucrezia says, "No." However, a moment later she changes her mind and tells Cesare that she accepts his offer:

there is no contract because of Lucrezia's rejection.

d. Charlie thought that he would need $5 to buy a concert ticket, so he entered a contract with Laura to mow her lawn for $5. When Charlie was almost finished mowing the lawn, his friend Tony came by and told Charlie that the cost of the concert ticket would be $10. Charlie stopped mowing the lawn and told Laura that he would not finish unless Laura agreed to pay him $10. If Laura agrees, and Charlie finishes the job:

Charlie may not collect more than $5, because he had a contractual duty to mow the lawn for $5.

e. Chuck, a farmer, has 20 breeding cows. He writes to Pete offering to sell "one of my best breeding cows for $4,000." The cattle are of a variety of breeds. Chuck certainly did not intend to include his number one breeder, El Champeen, worth around $60,000. Pete writes back stating, "accept your offer and will be over this Saturday to pick up my choice, El Champeen."

There is no contract because there is no mutual assent.

f. Consideration is:

what is demanded by the promisor as the price for the promise.

g. Consideration that involves the promise to refrain from doing an act is called:

forbearance.

h. Contract law is significant in that it is basic to other fields of law such as:

sales of personal property.,commercial paper.,secured transactions.

i. Contracts are governed primarily by:

state common law.

j. D owes C a debt the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with D promising to pay C $15,000 and C promising to release D on the $25,000 debt. The settlement agreement:

is binding under UCC section 2-209 even though there is no consideration.

k. D owes C an undisputed debt of $1,000. D writes a check to C for $700, and writes, "paid in full" on the check. C cashes the check.

The creditor can still collect the $300 because there was no consideration given by the debtor for C's promise to accept the amount as paid in full.

m. Dad wants to give his daughter, Priscilla, a new BMW 540i (worth perhaps $50,000) upon her graduation from high school. Priscilla says: "Let's make it a contract, Dad." So Dad promises to give Priscilla 540i when she graduates, in exchange for Priscilla's promise to pay Dad $1. There is no contract here. Why?

Because a genuine bargained-for exchange is not present here

n. Dan Doan negligently injured Paul. Paul told Doan that he would agree not to sue Doan if Doan promised to pay $1000.

Paul is bound by his promise since he received consideration for his promise not to sue.

o. Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so.

The consideration moving from Edward to Darla is the transfer of title to the car.,The consideration moving from Darla to Edward is the promise of $6,000 subject to a condition.

p. Denise Smolen hired David Vause to construct an exercise center in her home. After completing the job, he sent her a bill for $3,000. Based on the cost of similar work done for several of her neighbors, Smolen stated that $2,000 was a fair price. Vause said that the market rate for quality work was $3,000, but that he would accept $2,500. Smolen agreed and remitted a $2,500 check in full payment of the debt. The parties have

reached an accord and satisfaction.

q. Destruction of the subject matter has what effect on the offer?

The offer is terminated.

r. Donna told Jim that she needed someone to feed her cat while she was on vacation. Jim said to Donna, "I'll feed your cat, if you agree to pay me $30." Donna said to Jim, "I'll do it." At that point, Jim and Donna have:

a bilateral, executory contract.

s. Dye sent Hill a written offer to sell a tract of land for $60,000. They were engaged in a separate dispute. The offer stated that it would be irrevocable for 60 days if Hill would promise to refrain from suing Dye during this time. Hill promptly delivered a promise not to sue during the term of the offer. Dye subsequently decided that the possible suit by Hill was groundless. Dye then phoned Hill and revoked the offer. Hill mailed an acceptance. Dye did not reply. Under the circumstances,

Dye's offer was supported by consideration and was not revocable when accepted.

t. Edna, who runs a flower shop, sells Jim a shotgun. Jim is unemployed, and Edna has never before sold a firearm in her life. Which of the following is true?

Article 2 of the UCC applies because a shotgun is a personal property.

u. Elmer wrote a letter to his friend Fred offering to sell Fred an 80 acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling.

Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep it open.

v. Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court decision on the offer?

The court decision automatically terminates the offer.

w. Employer promises to pay Retiree a $10,000 per year pension for the remainder of Retiree's life in return for Retiree's promise to pay Employer $1 per year. Retiree foreseeably relies on the promise by taking out a mortgage on a small vacation home. Later Employer, who never intended to pay the pension, unfairly reneges on his promise. Employer's promise:

is binding under these circumstances.

x. Except for gifts, as a general rule offers may be revoked as long as the revocation occurs before the acceptance.

True

y. Express contracts and implied in fact contracts.

Are both legit contracts and equally enforceable

z. Farmer Frances has a long standing relationship with Veronica's Vegetable Market whereby several times a month Frances would drop off a load of produce at the market and return a few days later to pick up her agreed upon percent of the selling price. On one particular delivery day, Veronica notices Frances dropping off her customary load of produce, but no words are exchanged. When Frances returns a week later to pick up her money, the produce is sitting exactly where she had left it, too spoiled to now be sold. When Frances sues Veronica:

the court would find that a contract existed because, under the circumstances, if Veronica did not want the produce she had an obligation to tell Frances.

aa. For an offer to be valid, the following elements must be present:

the offeree must have knowledge of the offer.

bb. For an offer to confer the power to form a contract by acceptance, it must have all of the following elements except

be communicated ~ to the offeree by the offeror.

cc. For there to be consideration for a contract, there must be

a bargained-for detriment to the promisor(ee) or a benefit to the promisee(or).

dd. Gail sent a letter of acceptance to an offer that has expired. Gail has made:

an offer.

ee. Generally, a promise to make a gift:

is not enforceable.

ff. Generally speaking, three of the following four kinds of statements are treated as invitations to make an offer rather than as offers. One of the four, however, generally is regarded as an offer. Which of the following is most likely to be regarded as an offer?

An advertisement offering a reward for the return of lost property

gg. Generally, one who responds to an advertisement by offering to purchase the goods advertised at the advertised price is:

making an offer.

hh. George has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, George rents the 30,000-seat civic center for his birthday party. George's contract to rent the civic center is best described as:

a void contract.

ii. Gina promised to pay Bert $500, if Bert would stop stealing the radio from Gina's car. If Bert stops taking the radio, he will be found to have:

not given consideration for Gina's promise to pay.

jj. Gudrun owned a 2,000-acre country estate. She signed a written agreement with Johann, selling the house on the property and "a sufficient amount of land surrounding the house to create a park." The price was stated to be $200,000. When Gudrun refused to honor the agreement, Johann sued.

Gudrun will win because the agreement is not reasonably definite.

kk. Gus Parker owned a race horse that had not made a good showing in the last 10 races. Disgusted with the horse, Parker stated that he would sell the horse for $1.00. Sam Hood was in the group to whom Parker was speaking and immediately said that he would accept the horse for $1.00. Parker agreed to accept $1.00 after the afternoon's race in which Parker was obligated to participate. In the afternoon's race, the horse won and Parker decided that he did not really want to sell the horse for $1.00.

One dollar constitutes sufficient consideration.

ll. Gus Parker owned a race horse that had not made a good showing in the last 10 races. Disgusted with the horse, Parker stated that he would sell the horse for $25.00. Sam Hood immediately said that he would accept the horse for $25.00. Parker agreed to accept $25.00 after the afternoon's race in which Parker was obligated to participate. The horse won the race with a prize money of $5,000,000, and Parker decided that he did not really want to sell the horse.

$25.00 constitutes sufficient consideration.

mm. Harold Homeowner offers to sell Bill Buyer his house for $95,000 and agrees to keep the offer open for 10 days. On the third day, the house burns down.

The destruction of the house brings the offer to an end.

nn. Harold offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

Diane cannot accept the offer, because it wasn't made to her.

oo. Harold ordered an aluminum storm door from Sears for $249.99. Before it was delivered, Sears ran an ad in the paper for the same storm door at $179.99. Harold calls Sears and demands the advertised price. They say okay.

Harold must pay $179.99.

pp. Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the gloves were defective and a dispute arose as to the amount due and owing under the contract. Harold refuses to pay the $800 and Isaac is threatening to sue. Which of the following is correct with regard to this transaction?

If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that amount, the agreement is enforceable.

qq. Harper is opening a small retailing business in Hometown, U.S.A. To announce her grand opening, Harper places an advertisement in the newspaper quoting sales prices on certain items in stock. Many local residents come in and make purchases. Harper's grand opening is such a huge success that she is unable to totally satisfy the demand of the customers. Which of the following correctly applies to the situation?

Harper has made an invitation seeking offers.

rr. Harris wrote Douglas a letter which might be construed alternatively as an offer to sell land, an invitation to commence negotiations, or merely an invitation to Douglas to make an offer. Douglas claims that the communication was a bona fide offer which he has unequivocally accepted according to the terms set forth therein. In deciding the dispute in question, the court will

use an objective standard based on how a reasonably prudent businessperson would have interpreted the letter to Douglas.

ss. Harry promised to sell his guitar to Harriet, who promised to pay him $1,000. After Harriet tendered payment, Harry reneged on his promise, so Harriet filed suit. Which of the following is correct?

The consideration for Harry's promise is sufficient.

tt. Harry's mother, Harriet, calls her son upon the birth of his daughter, Hariette. Mom says, "I'm so happy that you have named the baby after me that I'm going to send you $100 for her!" No money came. Is the promise enforceable?

No, because there is no bargained-for exchange.

uu. If agreed to by both debtor and creditor, in which of the following situations will a smaller sum be unable to discharge a larger debt?

If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency

vv. If Alice wishes to withdraw her bid after the auctioneer's hammer falls:

she may not do so because her offer has been accepted.

ww. If an offer is made to the public, a person can accept that offer even though he has no knowledge that it has been made.

False

xx. If an offer of a reward for finding a lost object is made to the general public, it may be accepted

only by an individual who knew of the reward.

yy. If an offer requires acceptance by fax and the offeree mails acceptance:

there is a contract if the acceptance is actually received within the time the authorized means would have arrived.,under the Restatement, if the acceptance is received within the time the authorized means would have arrived, the acceptance is effective when sent.

zz. If an offeree sends a rejection, then changes her mind and sends an acceptance, a court would hold that:

no contract exists if the rejection is received before the acceptance is received.

aaa. If Kamuela had mailed a revocation the same day Terry telegraphed her acceptance, the court would hold that:

the offer was not revoked since revocations are effective only on receipt, whereas Terry's acceptance was effective when sent.

bbb. If no termination date is specified for an offer, the offer will remain open:

for a reasonable time.

ccc. If not an offer, the first statement made by one of two persons is most properly termed a(n):

invitation to negotiate.

ddd. If the obligor desires to be discharged from his duty, he will have to seek which of the following from the obligee?

a novation

eee. If the offeree dies before the offer has been accepted, the offer:

is automatically revoked by the death of the offeree.

fff. If the offeror has the power to terminate the offer before acceptance, the offeror has

the power of revocation.

ggg. If the specific subject matter of an offer is destroyed before the offer is accepted the:

offer is automatically terminated.

hhh. If the Uniform Commercial Code and the common law of contracts differ, the Uniform Commercial Code would be applied in which of the following situations?

A contract to buy living room furniture

iii. If there is no time specified for the acceptance of an offer, when does the offer terminate?

After a reasonable period of time

jjj. In a bilateral contract, if one party is not bound, neither party is bound.

True

kkk. In a situation in which there is a unilateral mistake the contract is

valid.

lll. In a unilateral contract, the consideration of the promise is:

the doing of the act called for by the promisor.

mmm. In addition to the four basic requirements of a contract, which of the following must also occur in order to have a valid contract?

There must be an absence of invalidating conduct and duress.

nnn. In an offer for a unilateral contract, once an offeree has made substantial progress toward rendering the requested performance, most courts would hold that:

the offeror had, at least temporarily, lost the power to revoke.

ooo. In contracts governed by the UCC, an authorized means of communication is:

any medium that is reasonable under the circumstances.

ppp. In deciding whether consideration necessary to form a contract exists, a court must determine whether

there is mutuality of consideration.

qqq. In determining whether the consideration requirement to form a contract has been satisfied, the consideration exchanged by the parties to the contract must be

legally sufficient.

rrr. In general, a mailed notice of revocation is effective:

when received.

sss. In general, if ALL of the elements of a contract are not satisfied, the courts will:

not enforce the contract.

ttt. In general, which of the following will not terminate an offer?

An inquiry by the offeree as to size or materials

uuu. In order to form a contract, the parties must:

manifest their agreement objectively.

vvv. In order to satisfy the consideration requirement to form a contract, the consideration exchanged by the parties must

be legally sufficient.

www. In response to an offer, a rejection is mailed on day 1, followed by an acceptance on day 2, the rejection arrived on day 4, the acceptance arrived on day 3. Which of the following is true?

Contract is formed on day 3.

xxx. In response to an offer, an acceptance is mailed on day 1, followed by a rejection on day 2, rejection arrives on day 3 and acceptance arrives on day 4. Which of the following is true?

Contract is formed on day 1.

yyy. In which of the following circumstances is a debt settlement not a binding contract?

Where the amount of the debt is uncertain and undisputed

zzz. In which of the following instances will silence by the offeree constitute acceptance?

During the course of prior business dealing, the offeree has always sent a rejection if the items were not wanted. The offeror always shipped the items if such a rejection was not received.

aaaa. In which of the following situations does the common law "pre-existing duty" rule not apply?

Where the alleged promise to perform a pre-existing duty really contains some new obligation, no matter how small.,Where unforeseen and unforeseeable circumstances make performance of the pre-existing obligation far more difficult than originally believed.,Where the parties mutually agree to terminate the first contract between them.

bbbb. In which of the following situations does the first promise serve as valid consideration for the second promise?

A debtor's promise to pay $500 for a creditor's promise to forgive the balance of a $600 disputed debt

a. Jack moved from New Hampshire to Florida and decided to have an air conditioner installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the dealer and told him he'd never heard of this service costing more than $500. They argued, but the dealer finally agreed to take $900. Is the agreement enforceable?

Yes, there is consideration for the modified amount.

b. Jack told Abe that Jack would pay Abe $10, if Abe washed Jack's car. Abe washed the car. At that point:

Both Jack and Abe have given consideration.

c. Jackson paid Brady $100 for a 90-day option to purchase Brady's 160-acre farm for $32,000. The option agreement was in writing and signed by both parties. The agreement referred only to the option, its period, a legal description of the farm, and the purchase price. Jackson wrote Brady 30 days later: "I hereby exercise my option to purchase your farm for $32,000 subject to closing details to be worked out by you and my attorney." Jackson's letter

accepts Brady's offer leaving customary details to be worked out during formalization of the contract.

d. James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100?

This is an option contract.

e. James offers to sell his fishing boat to Brenda for $3,000. Brenda says she will apply for a loan and will buy the boat within a week. A contract is formed:

when Brenda tells James she will buy the boat.

f. Jason's mother would like him to go to college, so in June he enrolls at Ivory Towers State University. He also quits his job and tells his mother his plans to continue taking classes. His mother says, "I'm so happy that you are going to college that I want to pay for your books." Jason then sends her a bill for $485. Which of the following is true regarding his mother's promise?

It is unenforceable, because Jason has already enrolled in school and there is no consideration.

g. John Fourcade orders a new Lincoln Continental from Belk Ford of Oxford, Mississippi. Belk Ford receives the new car and services it. They erroneously deliver it to Breck Tyler. When Breck discovers that he has received the car, which one of the following best describes the contract situation that exists between Breck Tyler and Belk Ford?

Quasi

h. Joe goes to the dentist to have a tooth extracted. Joe never signs a written contract for this service, and he and the dentist never made an oral agreement either. Later the dentist bills Joe, and Joe refuses to pay. After that, the dentist sues Joe. Which of the following is true?

The dentist can recover under and implied contract theory or quasi contract

i. Joe says to Sue: "I promise to pay you $1500 if you'll paint my house." Sue begins to paint Joe's house. Right now, she is half-finished. At this point in time, the contract between Joe and Sue is:

unilateral and executory.

j. Julian Fagan is owed $10,000 by Larry Berry. Julian has insisted that Larry pay this amount for a period in excess of a year. Larry has refused to pay. Julian writes Larry a letter in which he states, "If you do not pay the $10,000 by December 22, 1983, I shall file suit against you and collect interest and court costs." What is the status of such a threat?

It is perfectly legal.

k. Kay, an art collector, promised Hammer, an art student, that if Hammer could obtain certain rare artifacts within 2 weeks, Kay would pay for Hammer's post-graduate education. At considerable effort and expense, Hammer obtained the specified artifacts within the 2-week period. When Hammer requested payment, Kay refused. Kay claimed that there was no consideration for the promise. Hammer would prevail against Kay based on

unilateral contract.

l. Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher expends $200,000 to remodel the complex. Which of the following is correct with regard to Ken's promise?

Ken's promise is not to foreclose is unsupported by consideration.,Ken's promise is noncontractual.,Ken's promise will be enforced against him based upon the doctrine of promissory estoppel.

m. Last year, a series of arsons occurred in the City of Swelter. Early this year, Swelter's City Council adopted this resolution:The City will pay $10,000 for the arrest and conviction of anyone guilty of any of the arsons committed here last year. The resolution was telecast by the city's sole television station once daily for 1 week. Immediately thereafter the local television station ceased operations. The city's offer will terminate

if the City Council by resolution repeals its reward offer and causes this resolution to be broadcast once daily for a week over two local radio stations.

n. Lee has been declared incompetent by the court and is under the care of his sister. Unknown to his sister, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a:

void contract.

o. Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms.

False

p. Lydia promised to pay Lavinia $10,000 if she refrained from smoking for 1 year. Lavinia refrained and brought suit when Lydia failed to pay. Who will win?

Lavinia will win because Lydia received a legal benefit.

q. Lynn offers to sell his house to Dennis for $50,000. Dennis responds, "I will pay you $50,000 if you will paint the second floor." This response could best be described as:

a counteroffer.

r. Marianne promises to pay Nils $2,500 for one of his original sculptures, if she receives the $3,000 she anticipates receiving from her mother for her birthday.

Marianne has made a conditional promise.

s. Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?

This is a modification of a pre-existing contract, which under common law must be supported by additional consideration on the part of Bravo Builders.

t. Marilyn heard an announcement made at her school offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way.

The advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps.

a. Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:

$60, since the modified agreement is supported by additional consideration.

b. May 1, A hands a written offer to B for the sale of A's car. On May 2, A mails B a letter revoking the offer. On May 3, A calls and tells B that he is revoking. On May 4, B learns that A has sold the car to C. On May 5, A's letter finally gets to B. A's offer terminated on:

May 3.

c. Meed entered into a written agreement to sell a parcel of land to Beel for $80,000. At the time the agreement was executed, Meed had consumed a large amount of alcoholic beverages which significantly impaired Meed's ability to understand the nature and terms of the contract. Beel knew Meed was very intoxicated and that the land had been appraised at $125,000. Meed wishes to avoid the contract. The contract is

voidable at Meed's option.

d. Melissa mailed an offer to Jerry to sell him 8 ounces of gold at $450 per ounce. The letter arrived on May 1, and that afternoon, Jerry sent a letter of rejection to Melissa. The next morning, Jerry learned that the price of gold had gone to $490 per ounce, so he immediately mailed a letter of acceptance to Melissa and asked her to ignore the letter of rejection. The rejection was received by Melissa on May 3, and the acceptance was received on May 4. A court would find that a contract between Melissa and Jerry:

did not come into existence, because the rejection was received by Melissa prior to the receipt of the acceptance.

e. Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Irene has just finished a class in contract law and insists that the store sell her 5 suits for $15.00. Irene threatens to sue Michelle for breach of contract.

The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract.

f. Mildred saw a vase in an antique shop. A tag on the vase said "Genuine Chinese Vase, $125." Mildred said to the owner of the shop, "I'll buy this vase for $125." Milford, the owner of the shop, refused to sell the vase. In a lawsuit brought by Mildred against Milford,

Milford will win because he rejected Mildred's offer.

g. Mix offered to sell a parcel of land to Simon for $90,000. The offer was made by Mix in a signed writing and provided that it would not be revoked for five months if Simon promised to pay Mix $250 within 10 days. Simon agreed to do so. Which of the following is correct?

An option contract is formed.

h. Natalie's business law instructor offers to sell his Volvo for $100 to the first student to accept his offer. The Business Department's Associate Dean overhears this as she is walking down the hall and sticks her head into the room and says, "I accept." A moment later Natalie jumps up and yells, "I accept." When the court is asked to make a determination, most likely it will find that:

there is a contract between the instructor and Natalie since she was the first student to accept.

i. Nix sent Castor a letter offering to employ Castor as controller of Nix's automobile dealership. Castor received the letter on February 19. The letter provided that Castor would have until February 23 to consider the offer and, in the meantime, Nix would not withdraw it. On February 20, Nix, after reconsidering the offer to Castor, decided to offer the job to Vick, who accepted immediately. That same day, Nix called Castor and revoked the offer. Castor told Nix that an acceptance of Nix's offer was mailed on February 19. Under the circumstances,

Castor's acceptance was effective when mailed.

j. Offers

use objective standard for intent.

k. On April 1, A makes a valid offer to B. A mails B a revocation on April 2, which B receives on April 4. In the meantime, B mails A a rejection on April 3, which reaches A on April 5. When did this offer terminate?

April 4

l. On April 1, Fine Corp. faxed Moss an offer to purchase Moss' warehouse for $500,000. The offer stated that it would remain open only until April 4 and that acceptance must be received to be effective. Moss sent an acceptance on April 4 by overnight mail and Fine received it on April 5. Which of the following statements is correct?

No contract was formed because Fine received Moss' acceptance after April 4.

m. On April 2, Bonn & Co., CPAs mailed Marble Corp. a signed proposal to perform certain accounting services for Marble provided Marble accepts the proposal by April 30. Under the circumstances

A contract will be formed between the parties if Marble mails an acceptance to Bonn on April 29, even if it is not received by Bonn until May 3.

n. On April 6, Apple entered into a signed contract with Bean, by which Apple was to sell Bean an antique automobile having a fair market value of $150,000, for $75,000. Apple believed the auto was worth only $75,000. Unknown to either party the auto had been destroyed by fire on April 4. If Bean sues Apple for breach of contract, Apple's best defense is

mutual mistake.

o. On Danny's 18th birthday his Uncle Harris promised in writing to pay him $5,000 if Danny would drink no alcoholic beverages for the next two years. Danny drank no alcoholic beverages for the next two years as requested. Uncle Harris refused to pay on Danny's 21st birthday, claiming that Danny actually benefited himself by drinking no alcohol for those two years, thus, there was no consideration. If Danny sues Uncle Harris he will

none of the above.

p. On December 3, Joncie mailed a letter to Stumos offering to buy her stereo for $1,000 upon her delivering it to Joncie's home on or before December 24. Stumos immediately sent a letter to Joncie accepting the offer and promising to make delivery. What is the significance of the letter sent by Stumos?

Joncie could revoke the offer after receiving the letter.

q. On February 12, Harris sent Fresno a written offer to purchase Fresno's land. The offer included the following provision: "Acceptance of this offer must be by registered or certified mail, received by Harris no later than February 18 by 5:00 p.m. CST." On February 18, Fresno sent Harris a letter accepting the offer by private overnight delivery service. Harris received the letter on February 19. Which of the following statements is correct?

Fresno's letter constituted a counteroffer.

r. On January 1, Lemon wrote Gina Martin offering to sell Martin a ranch for $80,000 cash. Lemon's letter indicated that the offer would remain open until February 15 if Martin mailed $100 by January 10. On January 5, Martin mailed $100 to Lemon. On January 30, Martin telephoned Lemon stating that she would be willing to pay $60,000 for the ranch. Lemon refused to sell at that price and immediately placed the ranch on the open market. On February 6, Martin mailed Lemon a letter accepting the original offer to buy the ranch at $80,000. The following day, Lemon received Martin's acceptance. At that time the ranch was on the market for $100,000. Which of the following is correct?

Martin's letter of February 6 formed a binding contract based on the original terms of Lemon's January letter.

s. On July 1, Silk, Inc., sent Blue a telegram offering to sell Blue a building for $80,000. In the telegram, Silk stated that it would give Blue 30 days to accept the offer. On July 15, Blue sent Silk a telegram that included the following statement: "The price for your building seems too high. Would you consider taking $75,000?" This telegram was received by Silk on July 16. On July 19, Tint made an offer to Silk to purchase the building for $82,000. Upon learning of Tint's offer, Blue, on July 27, sent Silk a signed letter agreeing to purchase the building for $80,000. This letter was received by Silk on July 29. However, Silk now refuses to sell Blue the building. If Blue commences an action against Silk for breach of contract, Blue will

win, because Blue effectively accepted Silk's offer of July 1.

t. On June 15, Peters orally offered to sell a used lawn mower to Mason for $125. Peters specified that Mason had until June 20 to accept the offer. On June 16, Peters received an offer to purchase the lawn mower for $150 from Bronson, Mason's neighbor, Peters accepted Bronson's offer. On June 17, Mason saw Bronson using the lawn mower and was told the mower had been sold to Bronson. Mason immediately wrote to Peters to accept the June 15 offer. Which of the following statements is correct?

Peters' offer had been revoked and Mason's acceptance was ineffective.

u. On May 1, Melforth Realty Company offered to sell Greenacre to Dallas, Inc. for $1,000,000. The offer was made by telegraph and stated that the offer would expire on May 15. Dallas decided to purchase the property and sent a registered letter to Melforth on May 10 accepting the offer. As a result of unexplained delays in the postal service, the letter was not received by Melforth until May 22. Melforth wishes to sell Greenacre to another buyer who is offering $1,200,000 for the tract of land. Has a contract resulted between Melforth and Dallas?

No

NEEDED: Tutor for Business Law I. I don't know a tort from a torte. $10.00 an hour. Call Wendy, 555-3335, evenings.On May 4, Sarah saw the sign and left a message with Wendy's roommate that Sarah accepted Wendy's offer. On may 5, Wendy wrote in red ink across the sign, "Forget it! Dropped the class." Later that evening Wendy received Sarah's message.

No contract was formed because no offer was made by Wendy.

a. On May 1, X writes Y a letter offering to pay Y $1000 if Y will promise to paint X's house. The offer says nothing about stipulated or authorized means of acceptance. On May 2, Y sends X a letter rejecting X's offer. On May 3, Y changes his mind and (saying nothing about his May 2 letter) telephones X to accept the offer. On May 4, X goes completely insane. On May 5, X receives Y's rejection letter. Which of the following is true?

There is a contract here.

b. On November 1, Yost sent a telegram to Zen offering to sell a rare vase. The offer required that Zen's acceptance telegram be sent on or before 5:00 p.m. on November 2. On November 2, at 3:00 p.m., Zen sent an acceptance by overnight mail. It did not reach Yost until November 5. Yost refused to complete the sale to Zen. Is there an enforceable contract?

No, because Zen did not accept by telegram.

c. On September 10, Harris, Inc., a new car dealer, placed a newspaper advertisement stating that Harris would sell 10 cars at its showroom for a special discount only on September 12, 13, and 14. On September 12, King called Harris and expressed an interest in buying one of the advertised cars. King was told that five of the cars had been sold and to come to the showroom as soon as possible. On September 13, Harris made a televised announcement that the sale would end at 10:00 p.m. that night. King went to Harris's showroom on September 14 and demanded the right to buy a car at the special discount. Harris had sold the 10 cars and refused King's demand. King sued Harris for breach of contract. Harris's best defense to King's suit would be that Harris's

advertisement was not an offer.

d. On September 27, Summers sent Fox a letter offering to sell Fox a vacation home for $150,000. On October 2, Fox replied by mail agreeing to buy the home for $145,000. Summers did not reply to Fox. Do Fox and Summers have a binding contract?

No, because Fox's letter was a counteroffer.

e. On the first day of the month, Thomas and Moore orally agreed that Thomas was to deliver to Moore's place of business a case of fruit on each Monday of the current month. Moore was to pay the $100 price on the first day of the following month. On the 15th of the month, the agreement should be classified as

executory.

f. One of the most frequently occurring applications of the doctrine of promissory estoppel is to charitable subscriptions.

False

g. Opal offered, in writing, to sell Larkin a parcel of land for $300,000. If Opal dies, the offer will

automatically terminate prior to Larkin's acceptance.

h. Ordinarily, a promise to perform an existing legal obligation is:

not consideration.

i. Ordinarily acceptance of an offer is effective at the time the acceptance is dispatched. The rule does not apply if

the offer provides that an acceptance shall not be effective until actually received.

j. Parr is a CPA licensed to practice in State A. Parr entered into a contract with Jet, Inc. to perform an audit in State B for $50,000 (including expenses). After Parr had satisfactorily performed the audit, Jet discovered that Parr had violated State B's licensing statute by failing to obtain a CPA license in State B. Parr incurred $10,000 in expenses in connection with the audit. jet refuses to pay any fee to Parr, arguing that it could have engaged a local CPA licensed in State B to perform the same services for $35,000 (including expenses). If Parr sues Jet based on breach of contract, Parr will be entitled to recover a maximum of

$0.

k. Past consideration

is not adequate consideration.

l. Promises to make gifts to charities are generally

enforceable.

m. Promissory estoppel is a contractual doctrine that includes the following considerations:

The courts use the doctrine of promissory estoppel to enforce noncontractual promises.,Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so.

n. S agrees to sell a used typewriter to B for $1. The market value is $250.00. B accepts. Both the offer and acceptance are in writing.

S is bound because the law doesn't inquire into the fairness or adequacy of consideration.

o. Sally Smith loses her pet Persian cat. She posts a $100 reward offer. This offer is made to the public generally. Bill Jones finds the cat. Which of the following is most correct concerning his ability to claim the reward?

He may not collect the reward unless he knew of the reward.

p. Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?

Yes, because the early payment of the loan is consideration that makes the bank's promise binding.

q. Sam Patten owns a very successful shoe shop known as the Progressive Shoe Store. Arlen Coyle desires a franchise in order to open a similar store. Mr. Coyle contacts Mr. Patten and is told, "If you will buy Lot 21 in Section 18 and build a building according to the specifications and plans that I provide, I will grant you a Progressive Shoe Store franchise." Mr. Coyle performs these tasks and requests his franchise. Patten refuses to grant the franchise and contends there was no consideration and Coyle cannot hold him liable. Which of the following is most correct?

The doctrine of promissory estoppel applies.

r. Sam Student was hit by a car crossing the street and knocked unconscious. Fast Ambulance Service took him to the hospital while he was sill unconscious. What is Sam's liability for Fast Ambulance's fee?

Liable under quasi-contract (implied-in-law contract) theory

s. Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the doghouse has not yet been built, which term describes the type of contract in existence?

Executory contract

t. Sandy fraudulently induced Fred to enter a contract with her. A court would treat the contract as:

voidable.

u. Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out of town, Allison paints the apartment. This is best described as:

a unilateral contract.

v. Sarah Citizen hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted.

The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Sarah has accepted.

w. Sarah offered to buy a sofa from Mark for $400 and stated, "This offer must be accepted in writing by August 5." On August 2, Mark wrote a letter to Sarah that stated that Mark accepted the offer. Mark signed the letter, but then changed his mind and tore up the letter. The court will find that:

there was no valid contract between Sarah and Mark, because Mark never communicated acceptance to Sarah.

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