Contracts Problems 2

•.  Stirrup, a rancher, and Equinox, a fancier of horses, signed the following writing: "For​ $5,000, Stirrup will sell to Equinox a gray​ horse that Equinox may choose from among​ the grays on Stirrup's ranch."​  Equinox refused to accept delivery of a gray​ horse timely tendered by Stirrup or to choose​ among those remaining, on the ground that​ during their negotiations Stirrup had orally​ agreed to include a saddle, worth $100, and​ also to give Equinox the option to choose a​ gray or a brown horse.  Equinox insisted on​ one of Stirrup's brown horses, but Stirrup​ refused to part with any of his browns or with​ the saddle as demanded by Equinox.  If Equinox sues Stirrup for damages and the court finds that the writing is a partial integration, the court probably will​

•(A) admit the evidence as to both the saddle​ and the option to choose a brown horse.​

•(B) admit the evidence as to the saddle but​ not the option to choose a brown horse.​

•(C) admit the evidence as to the option to​ choose a brown horse but not the​ promise to include the saddle.​

•(D) not admit any of the evidence.

B

•.  During negotiations, the seller of a boat promises the buyer that the engine was warranted to be free of defects for a period of two years.  The parties then sign a written agreement that contains a warranty term with standard disclaimers of express and implied warranties, followed by language stating that "seller warrants that the engine will be free of defects for a period of one year."  After 14 months, the engine develops problems because of a defect.  A court finds that the writing is a partial integration and that the promise was actually made.  Is the seller liable under the warranty?

•A) Yes, because the parties did not intend their writing to be final as to the warranty.

•B) Yes, because the oral promise does not contradict the terms of the writing.

•C) No, because the writing was a final expression of their agreement as to the warranty.

•D) No, because the buyer would have a claim even under the written warranty.

C

•.  During negotiations between two friends over the sale of a boat, the seller tells the buyer that the engine was warranted to be free of defects for a period of two years. The parties finally sign a written agreement that contains no warranty terms.  After 14 months, the engine develops problems because of a defect.  A court finds that the writing is a partial integration and that the promise was actually made.  Is the seller liable under the warranty?

•A) Yes, because the gap fillers will supply an implied warranty.

•B) Yes, because the oral promise does not contradict the terms of the writing.

•C) No, because the writing was a final expression of their agreement as to the warranty.

•D) No, because the buyer would have a claim even under the written warranty.

B

•.  During negotiations, the seller of a boat promised the buyer that the engine was warranted to be free of defects for a period of two years.  The parties eventually signed a written agreement that contained no express warranty terms. Fourteen months after the purchase, the engine developed problems because of a defect.  A court found that the writing is a complete and exclusive statement of the terms of agreement.  Is the seller liable under the oral warranty?

•A) It remains to be determined as a question of fact whether the promise was made.

•B) Yes, because the oral promise does not contradict the terms of the writing.

•C) No, because the writing was a complete and exclusive expression of their agreement.

•D) No, because the buyer would have a claim even under the written warranty.

C

•The Kernel Corporation, through its president, Gritz, requested from Vault Finance, Inc., a short-term loan of $100,000.  On April 1, Gritz and Vault’s loan officer agreed orally that Vault would make the loan on the following terms: (1) The loan would be repaid in full on or before the following July 1 and would carry interest at an annual rate of 5%; and (2) Gritz would personally guarantee repayment.  The loan was approved and made on April 5.  The only document evidencing the loan was a memorandum, written and supplied by Vault and signed by Gritz for Kernel, that read in its entirety:

–“April 5

–In consideration of a loan advanced on this date, Kernel Corporation hereby promises to pay Vault Finance, Inc., $100,000 on September 1.

–Kernel Corporation

–By /s/ Demeter Gritz

–Demeter Gritz, President”

•Kernel Corporation did not repay the loan on or before July 1, although it had sufficient funds to do so.  On July 10, Vault sued Kernel as principal debtor and Gritz individually as guarantor for $100,000, plus 5% interest from April 5.  At the trial, can Vault prove Kernel’s oral commitment to repay the loan on or before July 1?

•(A) Yes, because the oral agreement was supported by an independent consideration.

•(B) Yes, because the evidence of the parties’ negotiations is relevant to their contractual intent concerning maturity of the debt.

•(C) No, because such evidence is barred by the preexisting duty rule.

•(D) No, because such evidence contradicts the writing and is barred by the parol evidence rule.

D

•Filmore purchased a Miracle color television set from Allison Appliances, an authorized dealer, for $499.  The written contract contained the usual one-year warranty as to parts and labor as long as the set was returned to the manufacturer or one of its authorized dealers.  The contract also contained an effective disclaimer of any express warranty protection, other than that which was included in the contract.  It further provided that the contract represented the entire agreement and understanding of the parties.  Filmore claims that during the bargaining process Surry, Allison’s agent, orally promised to service the set at Filmore’s residence if anything went wrong within the year.  Allison has offered to repair the set if it is brought to the service department, but denies any liability under the alleged oral express agreement.  Which of the following would be the best defense for Allison to rely upon in the event Filmore sues?

•(A) The Statute of Frauds.

•(B) The parol evidence rule.

•(C) The fact that all warranty protection was disclaimed other than the express warranty contained in the contract.

•(D) There was no consideration given for the oral agreement.

B

•.  In late January, the manager of a grocery store announced via flyers and in the local newspaper that he would award a $700 in-store gift certificate to any shopper who generated more than $3,000 in sales on his or her store credit card for goods purchased in the store in the month of February.  A woman with a large family who regularly shopped at the store decided that she had a good chance to win the contest.  As a result, she bought a large freezer for $300 so she could buy food in bulk and store it at home.  She then began buying large quantities of food and racking up purchases on her store credit card that were substantially higher than her usual monthly expenditures.  About two weeks later, the store manager realized that, although a few customers had increased their spending in an effort to win gift certificates, receipts for the month thus far had not increased enough to justify the cost of awarding gift certificates, so he again put up flyers and took out an ad in the local newspaper, this time to announce that the contest was canceled.  Although the woman saw the flyers, she continued to make larger than normal purchases at the store.  At the end of the month, she had totaled more than $3,000 in purchases on her store credit card, but the store manager declined to give her the gift certificate.  If the woman sues for breach of contract, will she prevail?

•A.  No, because the revocation was made in the same manner as the offer and, therefore, was effective.

•B.  No, because the woman knew that the offer had been revoked.

•C.  Yes, because she accepted the offer by purchasing the freezer.

•D.  Yes, because the offer could not be revoked as to the woman once she had begun to perform.

D

•.  At the end of his first year of law school, Lex sold his contracts casebook to a classmate for $50.  Lex only sells his books after he has used them to recoup some of his expenses.  Which of the following is true?

•(a) Lex is not in the business of dealing with law books, so the UCC does not apply to this transaction.

•(b) This transaction is not a sale of goods because the book has no value as a physical object consisting of nothing more than paper.  Its true value is in its content, which is intellectual property—an intangible right and not a "good."

•(c) This transaction is a sale of goods subject to the UCC.

•(d) This transaction is a sale of goods, but Article 2 does not apply because Lex is an occasional seller and not a merchant.

C

•Arlene posts this advertisement on a website that provides news and information to citizens of a certain city: "Leather handbag lost on downtown city bus; $100 reward for its return."  The ad included Arlene’s mailing address, telephone number, and email address.  Jack lives in the city but has not seen Arlene's posting.  Riding the downtown city bus, he finds the handbag.  In it, he discovers a writing that shows Arlene's home address, to which he then travels.  Finding no one at the home, he leaves the handbag in Arlene's mailbox.  Is Jack entitled to the $100 reward?

•A) Yes, because the advertisement was an offer for a unilateral contract.

•B) No, because he failed to deliver the handbag personally.

•C) No, because he acted without knowledge of the advertisement.

•D) No, if he was motivated to return the handbag as a Good Samaritan.

C

•.  On July 15, in a writing signed by both parties, Fixtures, Inc., agreed to deliver to Druggist on August 15 five storage cabinets from inventory for a total price of $5,000 to be paid on delivery.  On August 1, the two parties orally agreed to postpone the delivery date to August 20.  On August 20, Fixtures tendered the cabinets to Druggist, who refused to accept or pay for them on the ground that they were not tendered on August 15, even though they otherwise met the contract specifications.  Assuming that all appropriate defenses are seasonably raised, will Fixtures succeed in an action against Druggist for breach of contract?

•A.  Yes, because neither the July 15 agreement nor the August 1 agreement was required to be in writing.

•B.  Yes, because the August 1 agreement operated as a waiver of the August 15 delivery term.

•C.  No, because there was no consideration to support the August 1 agreement.

•D.  No, because the parol evidence rule will prevent proof of the August 1 agreement.

B

•Buyer, Inc. contracted in writing with Shareholder, who owned all of XYZ Corporation’s outstanding stock, to purchase all of her stock at a specified price per share.  At the time this contract was executed, Buyer’s contracting officer said to Shareholder, “Of course, our commitment to buy is conditioned on our obtaining approval of the contract from Conglomerate, Ltd., our parent company.”  Shareholder replied, “Fine.  No problem.”  Shareholder is willing and ready to consummate the sale of her stock to Buyer, but the latter refuses to perform on the ground (which is true) that Conglomerate has firmly refused to approve the contract.  If Shareholder sues Buyer for breach of contract and seeks to exclude any evidence of the oral condition requiring Conglomerate’s approval, the court will probably

•A.  admit the evidence as proof of a collateral agreement.

•B.  admit the evidence as proof of a condition to the existence of an enforceable obligation, and therefore not within the scope of the parol evidence rule.

•C.  exclude the evidence on the basis of a finding that the parties’ written agreement was a complete integration of their contract.

•D.  exclude the evidence as contradicting the terms of the parties’ written agreement, whether or not the writing was a complete integration of the contract.

B

•A seller and a buyer have dealt with each other in hundreds of separate grain contracts over the last five years.  In performing each contract, the seller delivered the grain to the buyer and, upon delivery, the buyer signed an invoice that showed an agreed-upon price for that delivery.  Each invoice was silent in regard to any discount from the price for prompt payment.  The custom of the grain trade is to allow a 2% discount from the invoice price for payment within 10 days of delivery.  In all of their prior transactions and without objection from the seller, the buyer took 15 days to pay and deducted 5% from the invoice price.  The seller and the buyer recently entered into a contract for a single delivery of wheat at a price of $300,000.  The same delivery procedure and invoice were used for this contract as had been used previously.  The seller delivered the wheat and the buyer then signed the invoice.   On the third day after delivery, the buyer received the following note from the seller: “Payment in full in accordance with signed invoice is due immediately.  No discounts permitted. /s/Seller.”  Which of the following statements concerning these facts is most accurate?

•A.  The custom of the trade controls, and the buyer is entitled to take a 2% discount if he pays within 10 days.

•B.  The parties’ course of dealing controls, and the buyer is entitled to take a 5% discount if he pays within 15 days.

•C.  The seller’s retraction of his prior waiver controls, and the buyer is entitled to no discount.

•D.  The written contract controls, and the buyer is entitled to no discount because of the parol evidence rule.

B

•A widget seller negotiates with a buyer for the purchase of 100 widgets for $10,000, with delivery 30 days from the signing of the agreement.  After the parties sign the agreement, which contains a merger clause, the buyer asks the seller if delivery could be in 20 days and the seller says, "Yes, I promise we will do that."  The seller does not deliver until 30 days from signing.  The buyer sues the seller and the seller seeks to bar the evidence that the seller promised delivery in 20 days.  Will the evidence be excluded under the parol evidence rule?

•A.  Yes, because it contradicts a term of the written agreement.

•B.  Yes, because it supplements a written agreement that is complete and exclusive.

•C.  No, because it is offered for the purpose of interpreting the writing.

•D.  No, because it is offered on an issue of modification.

D

•.  The owner of a house put an ad for its sale in the paper.  Her neighbor saw the ad and told her that he wanted to buy the house but had to arrange for financing. The owner suggested that they write a contract for sale then and there so that they would not have to waste any time while he got his financing. They orally agreed that the contract would not become binding unless the neighbor obtained financing, but the written contract did not mention this and appeared to be a fully integrated document.  The neighbor could not obtain financing and the owner brings suit to enforce the written contract.  Who will prevail?

•A.  The owner, because the contract was a fully integrated writing.

•B.  The owner, because parol evidence is not allowed to contradict a writing.

•C.  The neighbor, because the oral agreement that the contract would not be binding if the neighbor did not get financing was made contemporaneous with the writing.

•D.  The neighbor, because obtaining financing was a condition precedent.

D

•The owner of a store in a small beach town contacted a manufacturer about buying 100 Adirondack chairs. The parties reduced their agreement to sell and buy the 100 chairs to a signed writing that contained all of the essen­tial terms, as well as a merger clause. When the chairs were delivered to the store owner, she discovered that they were not "Adirondack chairs," as she understood that term and as that term was commonly used, but a different style of chair altogether that was manufactured in the Adirondack region of New York. The store owner refused delivery, and the manufacturer sued the store owner for breach of contract, arguing that he complied with the terms of the contract.  Will the store owner be allowed to introduce evidence of the meaning of the term "Adirondack chair"?

•A.  Yes, because the parol evidence rule does not apply to subsequent modifications.

•B.  Yes, because of the dispute between the parties over the meaning of the term "Adirondack chair."

•C.  No, because the written agreement of the parties was a complete integration.

•D.  No, because the contract was for a sale of goods between merchants.

B

•.  After negotiations, a painting contractor agreed with a homeowner to paint the exterior of her house for $20,000.   The painter further agreed to use only top quality paint because the homeowner wanted the paint to last for many years.   The painter filled out his standard form contract, but deliberately did not include a brand name for the paint that he would use.   After telling the homeowner that the contract contained the terms agreed to, she signed without reading it.  On completion of the job, the homeowner saw some empty paint cans in the painter’s truck and realized that top quality paint had not been used.  If the homeowner sues the paint contractor for misrepresentation, any statements made by the painter before the contract was signed:

• A. Would be barred by the parol evidence rule.

• B. Would not be barred by the parol evidence rule.

• C. Would be admitted but only if the contract was proved to be an incomplete agreement of the parties.

• D. Would not be admitted because they occurred prior to the signing of the contract.

B

•.  Tune Corporation, a radio manufacturer, and Bill's Comex, Inc., a retailer, after extensive negotiations entered into a final, written agreement in which Tune agreed to sell and Bill's agreed to buy all of its requirements of radios, estimated at 20 units per month, during the period January 1, 1988, and December 31, 1990, at a price of $50 per unit.  A dispute arose in late December, 1990, when Bill's returned 25 undefective radios to Tune for full credit after Tune had refused to extend the contract for a second three-year period.  In an action by Tune against Bill's for damages due to return of the 25 radios, Tune introduces the written agreement, which expressly permitted the buyer to return defective radios for credit but was silent as to return of undefective radios for credit.  Bill's seeks to introduce evidence that during the three years of the agreement it had returned, for various reasons, 125 undefective radios, for which Tune had granted full credit.  Tune objects to the admissibility of this evidence.  The trial court will probably rule that the evidence proffered by Bill's is

•(A) inadmissible, because the evidence is barred by the parol evidence rule.

•(B) inadmissible, because the express terms of the agreement control when those terms are inconsistent with the course of performance.

•(C) admissible, because the evidence supports an agreement that is not within the relevant statute of frauds.

(D) admissible, because course-of-performance evidence, when available, is considered the best indication of what the parties intended the writing to

D

•Buyer and Seller deal in electrical equipment.  In its catalog, Seller lists the prices for some of its products, but not for #4 conducting wire.  On July 11, Buyer sends Seller this signed written message:  "We wish immediately to have 4,000 feet of your #4 conducting wire.  We do not see the price listed in your catalog, so we propose that the price be agreed on later.  Please ship."  On July 12, Seller responds with this signed writing:  "Thank you.  We will ship."  Have Buyer and Seller formed a contract?

•A. Yes, because where the goods are bought and sold between merchants, price is not a material term.

•B. Yes, because notwithstanding the open price term, their interaction reflects finality of agreement.

•C. No, because parties do not form a contract if they agree that a material term will be subject to future agreement.

•D. No, because a seller who declines to publish its price shows an intention not to sell.

B

•.  In early July, the owner of a toy store entered into a contract with a craftsman for the purchase of 25 hand-carved wooden rocking horses for the holiday sales season.  The agreement failed to state a delivery date for the horses.  After several months went by without any word from the craftsman, the owner forgot about the agreement.  On October 15, the owner ordered a quantity of mass-produced resin-based rocking horses to sell in his store for the upcoming holiday season. One week later, the craftsman arrived at the toy store with a truck carrying the horses and demanded payment, but the toy store owner refused, stating that he already had more than enough rocking horses to sell. The craftsman sued the owner for breach of contract.  May the craftsman enforce the contract? 

•A. No, because the contract was missing an essential term, the delivery date, at the time of formation.

•B. No, because so much time had passed without word from the craftsman that the toy store owner had reasonable grounds for insecurity and was entitled to cancel the contract and mitigate his damages.

•C. Yes, because the delivery date was reasonable given the nature of the goods.

•D. Yes, because the craftsman accepted the contract by completing the hand-carved horses.

C

•Which of the following requirements must be met for modification of a sales contract under the Uniform Commercial Code?

•(A) There must be consideration if the contract is between merchants.

•(B) There must be consideration if either party is a non-merchant.

•(C) The modification must satisfy the Statute of Frauds if the contract as modified is within its provisions.

•(D) The parol evidence rule applies and thus a writing is required.

C

•Carl goes to a store to buy a television.  At the store, there's a television playing.  Carl thinks the picture and sound on that television are good, so he buys the same model.  He takes it home, plugs it in, and finds that the picture and sound, while reasonably good, aren't as good as what he saw in the store.  He sues for breach of warranty.  If he wins, it will be because

•A. there's a failure of consideration.

•B. there's a breach of the warranty of fitness for a particular purpose.

•C. the demonstration of the model constituted a warranty that proved false.

D. there's a breach of the implied warranty of merchantability.

C

•A seller's form conspicuously states on the front page, "THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED."  Is that language sufficient to disclaim the implied warranty of merchantability?

•A. No, because it does not use the word "merchantability."

•B. No, because it is not conspicuous.

•C. No, because it is disclaimed only when the implied warranty of fitness for a particular purpose is disclaimed.

•D. Yes, because the disclaimer is in writing and conspicuous.

A

•3. John, a law student, is selling his car to Mary.  He says, "This car will get 25 miles per gallon around town.  Of course, I disclaim all express warranties."  The parties then enter into a partially integrated agreement that makes no mention of warranties or warranty disclaimers.  Has John given Mary a warranty that the car will get 25 miles per gallon around town?

•A.  No, because John is not a merchant seller.

•B.  No, because the statement is puffing.

•C.  No, because all express warranties are disclaimed.

•D.  Yes.

D

•. Tom wants to change the oil in his automobile, and to do so, he needs to purchase an oil filter.  He goes to the auto supply store and tells the clerk that he needs to change the oil in his vehicle and wants an appropriate oil filter for his make and model of vehicle.  The clerk recommends oil filter XYZ-2.  Tom purchases the oil filter, takes it home, and puts it on his vehicle.  The oil filter (which has no defects) isn't suited for the vehicle and, as a result, the vehicle is damaged.  Tom can sue the auto supply store successfully based on breach of

•A. implied warranty of fitness for a particular purpose.

•B. implied warranty of merchantability.

•C. implied warranty of merchantability and implied warranty of title.

D. implied warranty of title.

A

•A consumer is test-driving a car of a used car dealership.  She hears a sound under the car and asks the salesperson about it.  The salesperson says, "Don’t worry about that.  We stand behind the cars we sell.  If anything goes wrong in the next 60 days, we will fix it free of charge."  Relieved, the consumer agrees to buy the car.  Two days later, the transmission fails.  She brings it back to the dealer and tells the manager what the salesperson said.  The manager tells her that the salespeople aren’t allowed to negotiate terms and all the terms are found in the writing.  He points out that the writing effectively disclaims all warranties and conspicuously states that the car is sold "AS IS."  He also points out a merger clause that states that there are no promises or understandings other than those found in the writing. Is the consumer likely to recover?

•A) Yes, because the warranty of merchantability was not properly disclaimed.

•B) Yes, because the parol evidence rule does not apply to consumers.

•C) Yes, because the writing is not fully or partially integrated.

•D) No, because the writing is a full integration.

D

•A consumer goes to a jewelry store and points out to the clerk a particular watch on display that he wishes to purchase.  The clerk goes to the back of the store and emerges with a watch that he briefly shows to the consumer before wrapping it.  The consumer buys the watch.  When he gets home, the consumer discovers that the watch he purchased differs from the one that he pointed out in the display.  Does the consumer have a claim for breach of warranty?

•A.  Yes, because an express warranty was created by affirmation of fact or promise.

•B.  Yes, because an express warranty was created by sample or model.

•C.  No, because he had an opportunity to inspect the goods before purchase.

•D.  No, because there was no language of warranty.

B

•. At a country auction, P acquired an antique cabinet that he recognized as a "Morenci," an extremely rare and valuable collector’s item.  Unfortunately, P’s cabinet had several coats of varnish and paint over the original finish.  Its potential value could only be realized if these layers could be removed without damaging the original oil finish.  A professional restorer of antique furniture recommended that P use Restorall to remove the paint and varnish from the cabinet.  P obtained and read a sales brochure published by Restorall, Inc., which contained the following statement:  "This product will renew all antique furniture.  Will not damage original oil finishes."  P purchased some Restorall and used it on his cabinet, being careful to follow the instructions exactly.  Despite P’s care, the original Morenci finish was irreparably damaged.  When finally refinished, the cabinet was worth less than 20% of what it would have been worth if the Morenci finish had been preserved.  If P sues Restorall, Inc. to recover the loss he has suffered as a result of the destruction of the Morenci finish, will P prevail?

•A.  Yes, unless no other removal technique would have preserved the Morenci finish.

•B.  Yes, if the loss would not have occurred had the statement in the brochure been true.

•C.  No, unless the product was defective when sold by Restorall, Inc.

D.  No, if the product was not dangerous to persons.

B

•A woman went to her local department store and told the salesperson that she wanted a coat that was extremely warm.  The salesperson went into his stockroom and brought out four different styles of very warm coats.  The woman tried on each of the four but did not like the way any of them looked.   While walking around the store, however, the woman saw a coat she did like and told the salesperson to bring one in her size.   The salesperson brought her the coat and he said that it was made of the finest cashmere and would probably last for years.  The woman tried on the coat and told the salesperson that she would take it and paid him.  After wearing the coat twice, however, she decided it was not warm enough for her climate.   She took the coat back to the department store and demanded her money back.  The store refused.  If the woman sues to get her money back, under which theory would she most likely prevail?

• A. Breach of the implied warranty of fitness for particular purpose.

• B. Breach of the implied warranty of merchantability.

• C. Breach of express warranty.

• D. None of the listed warranties.

D

•Under the terms of a written contract, Karp agreed to construct for Manor a garage for $10,000.  Nothing was said in the parties' negotiations or in the contract about progress payments during the course of the work.  After completing 25% of the garage strictly according to Manor's specifications, Karp demanded payment of $2,000 as a "reasonable progress payment."  Manor refused, and Karp abandoned the job.  If each party sues the other for breach of contract, which of the following will the court decide?

•A)   Both parties are in breach, and each is entitled to damages, if any, from the other. 

•(B)  Only Karp is in breach and liable for Manor's damages, if  any.

•(C)  Only Manor is in breach and liable for Karp’s damages, if any.

•(D)  Both parties took reasonable positions and neither is in breach.

B

•2.  Alpha and Beta made a written contract pursuant to which Alpha promised to convey an apartment house to Beta in return for Beta’s promise (1) to convey a farm to Alpha and (2) to pay Alpha $20,000 in cash six months after the exchange of the apartment house and the farm.  Which of the following statements concerning the order of performances is LEAST accurate?

•(A) Alpha’s tendering of good title to the apartment house is a condition precedent to Beta’s duty to convey good title to the farm.

•(B) Beta’s tendering of good title to the farm is a condition precedent to Alpha’s duty to convey good title to the apartment house.

•(C) Beta’s tendering of good title to the farm is a condition subsequent to Alpha’s duty to convey good title to the apartment house.

•(D) Alpha’s tendering of good title to the apartment house and Beta’s tendering of good title to the farm are concurrent conditions.

C

•ABC Corp hires Sarah as corporate counsel.  The employment contract states that Sarah's employment will terminate automatically if she fails to pass the state bar examination within twelve months of her start date.  Her passing the bar is best classified as what type of contractual term?

•A.  A condition precedent to the initial formation of the employment contract.

•B.  A concurrent condition of employment.

•C.  A condition subsequent that will extinguish ABC Corp’s duty to continue employing Sarah.

•D.  An express warranty regarding Sarah’s professional qualifications.

C

•Albert engaged Bertha, an inexperienced actress, to do a small role in a new Broadway play for a period of six months at a salary of $800 a week.  Bertha turned down another role in order to accept this engagement.  On the third day of the run, Bertha was hospitalized with influenza and Helen was hired to do the part.  A week later, Bertha recovered, but Albert refused to accept her services for the remainder of the contract period.  Bertha then brought an action against Albert for breach of contract.  Which of the following is Bertha’s best legal theory?

•(A) She was never told that an illness might jeopardize her continued employment as an actress.

•(B) Her performance of the literal terms of the contract was physically impossible.

•(C) Her reliance on the engagement with Albert by declining another acting role created an estoppel against Albert.

•(D) Her failure to perform for one week was not a material failure so as to discharge Albert’s duty to perform.

C

•.  Green contracted in a signed writing to sell Greenacre, a 500-acre tract of farmland, to Farmer.  The contract provided for exchange of the deed and purchase price of $500,000 in cash on January 15.  Possession was to be given to Farmer on the same date.  On January 15, Green notified Farmer that because the tenant on Greenacre wrongfully refused to quit the premises until January 30, Green would be unable to deliver possession of Greenacre until then, but he assured Farmer that he would tender the deed and possession on that date.  When Green tendered the deed and possession on January 30, Farmer refused to accept either, and refused to pay the $500,000.  Throughout the month of January, the market value of Greenacre was $510,000, and its fair monthly rental value was $5,000.  Will Green probably succeed in an action against Farmer for specific performance?

•(A) Yes, because the court will excuse the delay in tender on the ground that there was a temporary impossibility caused by the tenant's holding over.

•(B) Yes, because time is ordinarily not of the essence in a land-sale contract.

•(C) No, because Green breached by failing to tender the deed and possession on January 15.

•(D) No, because Green's remedy at law for monetary relief is adequate.

B

•A landowner entered into a single contract with a builder to have three different structures built on separate pieces of property owned by the landowner.  Each structure was distinct from the other two, and the parties agreed on a specific price for each.  After completing the first structure in accordance with the terms of the contract, the builder demanded payment of the specified price for that structure.  At the same time, the builder told the landowner that the builder was “tired of the construction business” and would not even begin the other two structures.  The landowner refused to pay anything to the builder.  Is the builder likely to prevail in a suit for the agreed-upon price of the first structure?

•(A) No, because substantial performance is a constructive condition to the landowner’s duty to pay at the contract rate.

•(B) No, because the builder’s cessation of performance without legal excuse was a willful breach of the contract.

•(C) Yes, because the contract is divisible, and the landowner will be required to bring a separate claim for the builder’s failure to complete the other two structures.

•(D) Yes, because the contract is divisible, but the landowner will be able to deduct any recoverable damages caused by the builder’s failure to complete the contract.

D

•A sporting goods shop contracted with a publisher to buy, for sale in its store, 1,200 posters featuring a professional golfer.  During production, the image of the golfer was inadvertently reversed and the right-handed golfer appeared to be left-handed.  When the posters were delivered on the date provided in the contract, the sporting goods shop noticed the discrepancy, which had no provable significant impact on the effectiveness of the poster.  In the opinion of the shop management, however, the posters did not look as good as they had in the catalog from which the shop had ordered them.  Is the sporting goods shop legally entitled to reject the posters?

•(A)   No, because the nonconformity does not materially alter the value of the posters to the sporting goods shop.

•(B)   No, because the publisher must be given an opportunity to cure the nonconformity before the sport­ing goods shop can reject the posters.

•(C) Yes, because the posters do not conform to the contract.

•(D)   Yes, because the publisher has breached an implied warranty of fitness for a particular purpose.

C

•A buyer orders 100 widgets for $10,000.  When the widgets arrive, he discovers that one of them is broken in the box.  He has found another source that will sell him 100 widgets for $9,600, so he figures he can reject the widgets, buy them from the other source, and still come out ahead.  He asks you for advice.  Can he rightfully reject the widgets?

•A.  Yes, because the goods fail to conform to the contract.

•B.  Yes, because the seller has materially breached.

•C.  No, because the seller did not breach.

•D.  No, because his rejection would not be in good faith.

D

•9.  A commercial buyer receives a shipment of goods from a seller and stores them without inspecting them.  Three months later, the buyer discovers a defect in the goods. The buyer immediately informs the seller that it is rejecting the goods and sends them back.  Is the rejection a rightful rejection?

•A.  Yes, because the buyer had a reasonable time to conduct an inspection.

•B.  Yes, because the buyer could revoke its acceptance.

•C.  No, because the buyer had accepted the goods.

•D.  No, because the buyer has waived its right to recover damages from the seller.

C

•.  A farmer ordered a complex irrigation pump system from a seller.  When the pump arrived, the farmer installed it and found that it did not work properly.  The farmer continued to try to get the pump to work and notified the seller of his efforts.   Finally, after the farmer had the pump for two weeks, he returned it to the seller.  The seller sued the farmer, claiming the attempted rejection was wrongful. Did the farmer wrongfully reject the pump?

•A.  Yes, because he had accepted it by keeping it for two weeks.

•B.  Yes, because the goods did not fail to conform to the contract.

•C.  No, because he had a reasonable period of time to inspect the goods.

•D.  No, because there was a material breach by the seller.

C

•.  A seller agrees to deliver 1,000 widgets by June 1.  The widgets are not tendered until June 8.  The buyer accepts delivery of the widgets and then informs the seller that it is seeking damages for the late delivery.  Assuming the buyer suffered some loss, is the buyer entitled to damages?

•A.  Yes, because the seller did not tender the widgets in conformity with the contract.

•B.  No, because the breach was immaterial.

•C.  No, because time is not of the essence.

•D.  No, because the buyer waived its rights by accepting the late delivery.

A

•Fixtures, Inc., in a signed writing, contracted with Apartments for the sale to Apartments of 50 identical sets of specified bathroom fixtures, 25 sets to be delivered on March 1, and the remaining 25 sets on April 1.  The agreement did not specify the place of delivery, or the time or place of payment.  Which of the following statements is correct?

•A.  Fixtures must tender 25 sets to Apartments at Apartments place of business on March 1, but does not have to turn them over to Apartments until Apartments pays the contract price for the 25 sets.

•B.  Fixtures has no duty to tender the 25 sets on March 1 at Fixtures place of business unless Apartments tenders the contract price for the 25 sets on that date.

•C.  Fixtures must deliver 25 sets on March 1, and Apartments must pay the contract price for the 25 sets within a reasonable time after their delivery.

D.  Fixtures must deliver 25 sets on March 1, but Apartments payment is due only upon the delivery of all 50 sets. 

B

•Same facts as the prior slide, but for this question only make the following assumptions.  On March 1, Fixtures tendered 24 sets to Apartments and explained, “One of the 25 sets was damaged in transit from the manufacturer to us, but we will deliver a replacement within 5 days.”  Which of the following statements is correct?

•A.  Apartments is entitled to accept any number of the 24 sets, reject the rest, and cancel the contract both as to any rejected sets and the lot due on April 1.

•B.  Apartments is entitled to accept any number of the 24 sets and to reject the rest, but is not entitled to cancel the contract as to any rejected sets or the lot due on April 1.

•C.  Apartments must accept the 24 sets but is entitled to cancel the rest of the contract.

D.  Apartments must accept the 24 sets and is not entitled to cancel the rest of the contract. 

D (no subst impairment)