Contract Law: Key Concepts and Case Analyses for Students

Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who lives in France. The contract includes all the costs of insuring and shipping the painting from France to New York. The agent that made the shipping estimate makes a mistake when adding up the costs and, as a result, the shipping cost listed in the contract is $1,000 less than the shipping actually costs. A court will most likely

allow the parties to rescind the contract.

Katie buys a car when she is seventeen. When she is twenty-five, Katie tries to disaffirm the contract and recover all her car payments. A court will likely find that the contract

ratified and Katie cannot recover her payments.

Jolie signs a contract with Keaton, an unlicensed physician, to perform a medical procedure. This contract is enforceable by

no one

Kathleen sells Richard a racehorse for $1,000. Both Kathleen and Richard think that the horse is too slow to win any races. Richard then enters the horse in a race, and it wins easily. He enters it in more races, and the horse soon wins more than $1 million. Kathleen tries to rescind the contract to sell the horse, claiming that it was worth more than $1,000. A court will

enforce the contract

SuperBumperCars, Inc. requires all customers to sign a release that contains a clause that releases SuperBumperCars from all liability in the event of an injury occurring during a bumper car ride, no matter who is at fault. This is an example of

an exculpatory clause

Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle and some weights from a fitness store. Later, Beth decides that she does not want the water bottle or weights. In most states, Beth

can only disaffirm the contract if she returns all the goods.

Rolf is an emergency medical technician. Medical personnel such as Rolf are pro¬hibited by state statute from working more than a certain num¬ber of consecutive hours. One month, Rolf works more than the legal limit. Rolf can recover for

the hours up to the statutory maximum and the extra hours.

The state of Illinois enacts a usury statute. The purpose is to

establish a maximum rate of interest that may be charged for loans.

Betty is selling her used clothing shop on Main Street. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another used clothing shop within 300 miles of the shop she is selling. A court will most likely conclude that this restriction on competition is

unreasonable and may reform the covenant .

Dixie May enters into a contract to buy one hundred pounds of pecans from Margaret. The contract must be in writing if the pecans cost

$500

Olivia, a minor, signs a contract to buy a bike from Phil, the owner of SuperCycles Bike Store. Olivia's right to disaffirm the contract

does not change the fact that Phil is bound by the contract.

Brasilia, a real estate broker licensed only in Connecticut, con¬cludes a land sale in Delaware. She can

not collect the commission, keep it, or foreclose on the property.

Doug agrees with Elinor to sell methamphetamine to patrons of Elinor's nightclub Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the money. Elinor can

not enforce the deal.

Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is a gold mine. A court would

enforce the contract.

Ruthie, a minor, charges the cost of an expensive leather jacket at a Girl's Trend store. Two nights later, Ruthie loses the jacket at Minors Only Club. She disaf¬firms the jacket's purchase. Ruthie owes Girl's Trend the reasonable value of the jacket

if it is deemed "necessary."

Andy knows nothing about horses. Peter, an expert horse trainer, knows that a certain horse has no talent and is not likely to win any competitions. Peter convinces Andy to buy the horse for $500,000 by assuring him that it has great talent. The horse turns out to have no talent and never wins any competitions. Andy can most likely recover damages based on

fraud.

Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who lives in France. The contract includes all the costs of insuring and shipping the painting from France to New York. The agent that made the shipping estimate makes a mistake when adding up the costs and, as a result, the shipping cost listed in the contract is $1,000 less than the shipping actually costs. A court will most likely

allow the parties to rescind the contract.

allow the parties to rescind the contract.

Colleen is intoxicated, but still mentally capable of understanding the consequences of her actions when she signs a contract to sell the rights to her latest phone app design to Addie. The contract is

enforceable even if Colleen attempts to disaffirm it.

Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of

agreement.

Jonathon promises to pay child support and alimony to his ex-wife every month after their divorce. Jonathon has

both a legal and a moral obligation to keep his promise.

Holiday Sales Company and Global Distributors, Inc., enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have

an executory contract.

Kingston promises to pay Melina $500 to install a pump in his warehouse. Melina completes the installation. The act of installing the pump

is the consideration that creates Kingston's obligation to pay Melina.

Bobbie claims that Carly breached their contract. Carly responds that she never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to

the objective theory of contracts.

Cynthia tells Darryl that she will deliver his boxes of Paradise Cookies as he directs. A declaration that one will do something in the future is part of the definition of

a promise.

Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To complete the order, the buyer is required to click on a button that says, in reference to certain terms, "I agree." This is

a click-on agreement.

Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is

not liable, because the statement was an opinion.

Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray's horse is too slow. Ray laughs and jokingly responds, "Yes, he is too slow! I would sell him for $5!" Peter hands Ray $5. This is

not a valid acceptance because Ray's offer was made in jest.

Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making important terms

reasonably clear

Sparky offers Teodora $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

not question the adequacy of the consideration.

Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him in the subject for $500. As an offer, this is

effective

Livewire Company and McCoy's Candy, Inc., sign a document that states Livewire agrees to design a Web page for McCoy's, which agrees to pay for the service. This is

an express contract

Sparky offers Teodora for her collection of rare coins. She accepts. If a dispute arises, a court would likely

not question the adequacy of the consideration

Livewire Company and McCoys Candy Inc. sign a document that states livewire agrees to design a Web page for McCoys which agrees to pay for the service. This is

an express contract

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