first part

Paula and Dan Draper are a married couple with a new baby named Sarah. Dan hates giving Sarah baths. Just before Sarah’s first birthday, Dan says to Paula, “I’ll give you $1,500 if you bathe Sarah until she is two years old.”

Assuming that a reasonable person would think that Dan was serious, is his promise to pay $1,500 enforceable?

No, unless a court finds the promise overcomes the normal presumption that governs such agreements.

Sally Seller and her friend Brian Buyer were at lunch one day when Sally told Brian, “I decided last night I am going to sell my motorcycle for $800.” Brian, who thought this was a deal he couldn’t refuse, responded “I accept, I will buy your motorcycle for $800.” Assume $800 was a fair price for the motorcycle.

Which of the following assertions is true at the time of Brian’s statement?

Both (B) and (C) are correct.

Homeowner calls up Hardware Store (“Store”) on the phone and asks the representative how much Store charges for Acme-brand, two-foot-high vinyl picket fencing. Store’s representative said, “$2 per running foot.” Homeowner said, “Great. I’ll take 200 running feet and will be down this afternoon to pick it up.” Assume no further communication or actions by the parties.

Which is the most accurate description of the parties’ status at this point in time?

Store and Homeowner are not in a valid contract.

Sam Seller tells Barry Buyer that he is considering selling his property. Sam invited Buyer to make an offer. Barry says: “How about $60,000?” to which Sam responds, “No, I wouldn’t consider selling it for less than $75,000.” Barry then says, “I accept, I’ll pay you $75,000 for your property.” There was no further communication between the two parties.

Is there a contract between Sam and Barry?

no , because Seller did not make an enforceable offer, so Buyer did not have the power to accept

Seller put an ad in the paper saying he would sell his land for a minimum of $50,000. Buyer wrote him expressing interest in purchasing the land. Seller e-mailed Buyer telling her she needed to act fast if she was interested, because he had other offers for the property.

The next communication from Buyer to Seller was an e-mail from Buyer stating that she had opened escrow with instructions to the escrow agent to pay Seller $50,000 upon receipt of good title to the property.

Seller wrote back that he had already sold the property to another for $60,000.

If Buyer sued Seller for breach of contract, which of the following is true?

Seller should prevail because they had not entered into a contract.

Rowdy Records is a music store in Indianapolis, Indiana. Rowdy’s took out an advertisement in Monday’s edition of the Indianapolis Star that read: “Freaky Friday Sale! Ten DVD’s for only $1 each to the first customer who walks through our door this Friday!”

Is the ad an enforceable offer?

Yes, because all attributes of an enforceable offer are present.

Sally Seller has an upscale clothing store on Rodeo Drive in Beverly Hills. She puts an advertisement in the LA Times that she is selling skinny jeans for $175, a bargain for this particular designer. Betty Buyer, a fashionista on a budget, was ecstatic to hear about the sale and went to the store that very same afternoon, as soon as she got off work. Betty pulled $175 cash from her purse and said, “I’ll take the skinny jeans in a size 4, please.”

Sally had already sold out of Betty’s size. She explained the situation to Betty, who was furious. Betty became even angrier when Sally refused to give Betty a “rain check,” allowing Betty to purchase the jeans at the same price when her size came in.

Betty sued Sally for breach of contract.

In the suit against Sally Seller, Betty will likely:

Lose, because Sally has not made a valid offer.

Pam saw an advertisement in the Sunday Times stating that Tar–Mart was hiring cashiers, and that all cashiers that are hired would start with, “a base salary of $60,000, with a 5% increase in pay guaranteed every six months the employee remains on the job.” Pam applied and was hired for the job.

She started at $60,000, but after eight months on the job, Tar–Mart had failed to give her a raise. Pam complained, and was told, truthfully, that there had been a good number of customer complaints about Pam’s performance and therefore she had not performed well enough to merit a pay raise.

Can Pam successfully sue Tar–Mart for breach of contract over the failure to increase her salary 5%?

Yes, because even though Tar–Mart did not make an offer by means of the advertisement, it set forth the terms of Pam’s offer in the ad and is bound by the guarantee of a salary increase every six months so long as Pam is employed.

Danny Dude and his friends were having a wine tasting in Danny’s wine cellar. Danny was having a good time and had become rather tipsy. He was slurring his words and stumbling a little.

About an hour into the tasting, Danny was furious to find that he couldn’t find his most precious bottle, a $2,500 bottle of 2000 Chateau Lafite Rothschild. Danny yells at the assembled crowd, “$250,000 to anyone who can produce a 2000 Chateau Lafite Rothschild.”

Everyone laughed at this ridiculous price, but Pearl took Danny seriously. Pearl slipped out of the tasting, immediately went to the nearest wine store, and bought a bottle of 2000 Chateau Lafite Rothschild for $2,500. Pearl brought the bottle back to the event before the wine tasting had finished.

Danny’s offer of $250,000 for the $2,500 bottle of wine is most likely:

Not an offer because a reasonable person would not believe Danny intended to offer $250,000 for a $2,500 bottle of wine.

Peter Pixie and Dean Dant were drinking together at Dan’s house when Dean tells Peter he is dying to purchase his house. Peter, who was feeling tipsy, scoffed at the idea and said “You couldn’t afford it you imbecile.” Dean, who was unaware Peter was feeling the booze so much, responded, “Well, sure I could, I’ll give you $500,000 for it.” Peter shook his head and said, “No, make it $700,000,” and Dean replied, “$600,000 and we have a deal.” Peter said “Ok, $600,000 it is.”

Peter and Dean then wrote up a contract on a napkin that stated that Peter would sell his house to Dean for $600,000, payment was to be made by check on the following Wednesday, and the two even called Dean’s wife into the room whereupon Peter, Dean and Dean’s wife all signed the napkin contract.

The following Wednesday, Dean went back to Peter with a cashier’s check to tender payment. Peter yells, “You fool! I was only joking. I never intended to sell you my property. I was higher than a 747!”

Assuming $600,000 was the fair market value for the home, in a suit between Peter and Dean, what is the likely result?

The two were in a contract if a reasonable person in Peter’s position would believe they had entered into a contract

Pam Poodle was opening a dog salon and needed someone to paint the salon. She wrote Bill Brush, a commercial painter, an e-mail stating “I’m opening up a dog salon next week and need someone to paint. If you come by and paint the shop, I’ll pay you $2,500. Let me know, or just come by next week and start painting.” Pam was out of town buying supplies the next week, but Bill went to the salon and began painting. One week later, Pam saw Bill at the salon and told him she no longer needed him to paint the salon. Pam ordered Bill off her premises and has refused to pay him.

Which of the following statements is most correct?

A contract between Pam and Bill was formed when Bill began painting.

Paul Pack published an ad in his local newspaper offering “$500 to whoever provides information” that results in the recovery of Alice, his dog. Ann calls Paul on Tuesday and says she saw Alice at City Park near Paul’s home. Dana calls Paul on Thursday and tells Paul she saw Alice in the same park. Paul went to City Park and found Alice on Friday afternoon. Paul paid Ann $500, but told Dana that he already had the information about Alice being in City Park before her call, so he did not believe he was obligated to pay her.

Dana sues Paul for breach of contract.

In the suit between Dana and Paul, Dana will likely:

Lose, because Ann had already accepted the reward offer.

Camille Rose was an avid record collector. She had an expansive collection of all of the most popular vinyl records, including all but one David Bowie album. The David Bowie album she did not have was Space Oddity. She placed the following ad on Craigslist:

$100 offered for information on the availability for purchase of a vinyl copy of David Bowie’s Space Oddityalbum, in good condition. Contact Camille at (555) 555–5555.

The ad was placed Friday, May 10 and was to run for a week, starting Sunday, May 12.

Therese Tulip was another record collector, and independently knew that Camille was looking for the vinyl. On Sunday morning, she saw the record at a swap meet. Therese called Camille as soon as she left the swap meet and told her where she could find the record. Therese had not seen the Craigslist ad.

Randy Record saw Camille’s ad on Monday morning and called her right away to give her a tip on the availability of the record at a local record shop. Randy was the first person to call in response to the ad. Camille thanked Randy, but told him that she had already found the record she needed and did not want a second. Camille also truthfully told Randy that she had already contacted Craigslist at 10:00 a.m. that morning and cancelled the ad for the rest of the week, and therefore felt there was no longer a viable reward offer.

A few days after telling Camille about the record, Therese found out about the ad and reward. She demanded payment from Camille who refused. If Therese sued for the reward will she prevail?

No, Therese cannot collect because she did not know of the offer when she called Camille.

Camille Rose was an avid record collector. She had an expansive collection of all of the most popular vinyl records, including all but one David Bowie album. The David Bowie album she did not have was Space Oddity. She placed the following ad on Craigslist:

$100 offered for information on the availability for purchase of a vinyl copy of David Bowie’s Space Oddityalbum, in good condition. Contact Camille at (555) 555–5555.

The ad was placed Friday, May 10 and was to run for a week, starting Sunday, May 12.

Therese Tulip was another record collector, and independently knew that Camille was looking for the vinyl. On Sunday morning, she saw the record at a swap meet. Therese called Camille as soon as she left the swap meet and told her where she could find the record. Therese had not seen the Craigslist ad.

Randy Record saw Camille’s ad on Monday morning and called her right away to give her a tip on the availability of the record at a local record shop. Randy was the first person to call in response to the ad. Camille thanked Randy, but told him that she had already found the record she needed and did not want a second. Camille also truthfully told Randy that she had already contacted Craigslist at 10:00 a.m. that morning and cancelled the ad for the rest of the week, and therefore felt there was no longer a viable reward offer.

Randy Record also sued Camille for the $500 reward. Will Randy recover?

Yes, because Camille’s attempted revocation was ineffective against Randy.

Drugs, Inc. began a promotion for Sick–Me–Not, a medicine that is supposed to prevent users from catching any illness. Under the promotion, which was described in an ad that ran for three consecutive weeks on page 30 of Time Magazine, rugs, Inc. told consumers it would refund the purchase price of Sick–Me–Not if purchasers used the medicine correctly for six months and still got sick.

Piper Pepper purchased Sick–Me–Not and used it for six months, but still came down with bronchitis. She did not notify Drugs, Inc. that she was taking the medicine.

Four months after Piper began using Sick–Me–Not, i.e., two months before the expiration of the six month period set forth in the ad, Drugs ran an ad for three consecutive weeks on page 30 in Time retracting the offer and saying it would no longer pay for anyone who became ill after using the product during the six month period she was using the product.

Piper thereafter properly filled out the paperwork described in the first series of ads to receive her refund. However, Drugs, Inc. refuses to pay the refund amount.

If Piper sues Drugs, Inc. for breach of contract, what is the most likely result?

Drugs, Inc. must pay Piper because she has begun performance and its attempted revocation was not effective against Piper.

Drugs, Inc. began a promotion for Sick–Me–Not, a medicine that is supposed to prevent users from catching any illness. Under the promotion, which was described in an ad that ran for three consecutive weeks on page 30 of Time Magazine, rugs, Inc. told consumers it would refund the purchase price of Sick–Me–Not if purchasers used the medicine correctly for six months and still got sick.

Piper Pepper purchased Sick–Me–Not and used it for six months, but still came down with bronchitis. She did not notify Drugs, Inc. that she was taking the medicine.

Four months after Piper began using Sick–Me–Not, i.e., two months before the expiration of the six month period set forth in the ad, Drugs ran an ad for three consecutive weeks on page 30 in Time retracting the offer and saying it would no longer pay for anyone who became ill after using the product during the six month period she was using the product.

Piper thereafter properly filled out the paperwork described in the first series of ads to receive her refund. However, Drugs, Inc. refuses to pay the refund amount.

Same facts as above except: (1) assume there were no revocation ads, but (2) Alice Anderson used Sick–Me–Not for six months and submitted the proper paperwork before Piper; and (3) Drugs, Inc. paid Alice’s claim, but still refused to pay Piper.

In response to Piper’s suit against Drugs, Inc., what is the most likely result?

Piper can validly accept, despite Alice accepting the offer first

Paula Pound was out to dinner one night when she discovered her good friend, Darla Deed’s wallet in the women’s restroom. She took the wallet and after dinner started driving the wallet to Darla’s home. On the way, Paula took a cell phone call from Adam Ant, who told Paula that Darla had just posted a $200 reward on her blog for the return of the wallet.

Paula brings the wallet to Darla, and demands the $200 reward. Darla, however does not feel she should have to pay a friend who was going to return the wallet anyway, and refuses to give Paula the reward.

Does Darla have to pay Paula the reward?

Yes, because Paula learned of the reward before she returned the wallet.

Paula Pound was out to dinner one night when she discovered her good friend, Darla Deed’s wallet in the women’s restroom. She took the wallet and after dinner started driving the wallet to Darla’s home. On the way, Paula took a cell phone call from Adam Ant, who told Paula that Darla had just posted a $200 reward on her blog for the return of the wallet.

Paula brings the wallet to Darla, and demands the $200 reward. Darla, however does not feel she should have to pay a friend who was going to return the wallet anyway, and refuses to give Paula the reward.

For the purposes of this question only, assume the following: when Adam tells Paula about Darla’s reward, Paula responds, “I could never ask her to pay me for returning the wallet. That is what friends are for.” Paula then returns the wallet and when Darla tries to pay her, Paula says “Don’t worry about it, I won’t take your money.” Paula leaves without payment. However, on her way home Paula gets in a fender bender. She now has an unexpected payment to fix her car and could really use the reward money. Paula calls Darla and explains that she needs the reward money but Darla says that it is too late.

If Paula sues Darla for the reward within the statute of limitations, what result?

Darla will prevail, because Paula did not intend to accept the reward offer at the time she returned the wallet.

Merchant Buyer (“Buyer”) sends an order to Factory A, owned by Alvin, for 5,000 generic plastic paper clips. The offer could be validly accepted by beginning production of the clips. However, Factory A went out of business before the clips could be manufactured.

As a courtesy to Buyer, Alvin forwarded the order to his friend Byron, the President of Factory B. Without notifying Buyer, Factory B competently fills the order and ships conforming clips to Buyer.

Is there a contract between Buyer and Factory B?

No, because Buyer placed the order with Factory A.

In a face-to-face conversation, non-merchant Seller offers to sell his old smart phone for $100 to non-merchant Buyer. Buyer replies: “I’ll pay you $75 for it.” Seller says: “I cannot reduce the price, but my offer remains open to you until tomorrow.” The next day Buyer tells Seller: “OK, I’ll pay $100 for the phone.”

Are Buyer and Seller in an enforceable contract?

Yes, because Seller said the offer remained open.

Seller offers to sell Buyer her antique record player for $80. Buyer replies, “Wouldn’t you consider taking $50?” Seller says no. Buyer then says “OK, I’ll take the record player for $80.” No further communication existed between the parties.

Has Buyer effectively and enforceably accepted Seller’s offer?

Yes, because Buyer’s response to the $80 offer never terminated his power of acceptance.

On Monday, November 16, Homeowner told Painter she would give him $2,000 to paint the outside of her home by December 5, when she was hosting a party. Painter told Homeowner he would get back to her as soon as he looked up prices for the paint. Later that day, Painter called Homeowner and left a message on her answering machine that said, “This is Painter. I’ve checked the paint prices and I won’t do the job for less than $3,500.”

A job Painter planned to work on fell through and Painter now needed the money. So on Friday, November 20. Painter called Homeowner and left another message, “This is Painter, again. Upon further consideration, I accept your offer to paint your house for $2,000. I’ll do it this weekend.”

Homeowner played the second message just as she was going out of town for a long weekend away, and did not contact Painter. She had made no other arrangements for painting the house. That weekend, Painter went to Homeowner’s home and painted the outside, without Homeowner’s knowledge. When Homeowner returned from her vacation, Painter gave her a bill for $2,000.

Homeowner refuses to pay the bill and Painter brings suit for breach of contract only.

Who will likely prevail in the lawsuit?

Homeowner, because she did not accept Painter’s offer to paint the home for $2,000.

Seller offers to sell Buyer his ticket to a popular music festival for $200. Buyer says to Seller: “I plan to keep your offer under advisement, but while I am thinking about it, would you take $125?” Seller doesn’t answer, but Buyer then says, “OK, I’ll take it for $200.” No further conversation occurred between Buyer and Seller.

Is there a contract between Buyer and Seller?

Yes, because Buyer validly accepted the offer to buy the ticket for $200

On April 1, Elizabeth offered to sell Thomas the last puppy from the litter her dog had just birthed for $600. Thomas wanted some time to think about it, but Elizabeth knew her neighbor Amanda was dying to buy the puppy, and Elizabeth really needed the money. Because Elizabeth and Thomas had been best friends for a long time, Elizabeth told Thomas she would keep her offer open until April 8, in exchange for $5 from Thomas. Thomas gave Elizabeth the $5 and went home to think about the deal. Thereafter, Amanda gave Elizabeth $600 in cash for the puppy “just in case” Thomas did not want the puppy.

After a long week of indecision about the responsibility of owning a puppy, Thomas woke up on the morning of April 8 and knew he had to have the puppy. He called Elizabeth immediately to tell her his decision, but she had not paid her phone bill and her line was cut off. Instead, Thomas wrote a check to Elizabeth for $600 and put it in a stamped envelope along with a note that he was accepting the offer to purchase the puppy. The envelope was properly stamped and addressed, and Thomas dropped the envelope in the mailbox at 10:00 p.m. on April 8. The note and check were not received by Elizabeth until April 10.

When Elizabeth had not received the letter, or otherwise heard, from Thomas on April 8, she told Amanda the puppy was hers on April 9.

Who owns the puppy in a jurisdiction that follows the Restatement 2d of Contracts?

Amanda, because Elizabeth sold the puppy to Amanda on April 9th before receiving Thomas’s check.

Buyer and Seller went out to dinner when Seller said “I will sell you this watch for $50.” Buyer never responded and the two went their separate ways after dinner was finished. Three days after their dinner, Buyer called Seller and said: “I accept your offer; I will buy your watch for $50.” This was the first communication between the two since the dinner.

In a jurisdiction using common law presumptions regarding offer and acceptance rules, Buyer and Seller are:

Not in a contract, because Buyer did not accept at dinner.

On Wednesday, Seller offers to sell Buyer her dining room table for $70. Buyer says “I don’t know, will you give me a few days to think about it?” Seller responds, “Sure, how about until next Tuesday?” A few minutes later, though, Seller says, “I changed my mind, I want to keep the table and I am not going to sell it.” Buyer then says, “I’ll take it.”

Is there a contract between Buyer and Seller?

No, because the power of acceptance was terminated when Seller said she was not going to sell the table.

Buyer and Seller enrolled in their employer’s “Get Fit” program, which required all participants to purchase a treadmill to use in their office during lunchtime. Buyer and Seller were on different floors of the employer’s office building.

Buyer bought an inexpensive treadmill without any bells and whistles. Seller purchased a $2,000 state of the art treadmill with a television screen and calorie counter. After several months, Buyer was pleased to find that he could not get enough of the treadmill. He used it every chance he got. Seller, on the other hand, lost interest in the treadmill and dropped out of the “Get Fit” program. When Seller heard how much Buyer enjoyed the program, he wrote Buyer an e-mail describing his treadmill and explaining he had lost interest in the fitness program. The e-mail provided, “If you pick up the treadmill at my office during business hours within the next three weeks, I will let you have it for $750.”

Buyer got busy at work and was unable to pick up the treadmill. Two weeks after Buyer received the offer, Seller’s co-worker was at a meeting with Buyer and accurately told Buyer that Seller had already sold the treadmill to another employee. The co-worker was a good friend of Seller’s and a trustworthy individual.

Nevertheless, the next day, Buyer went to Seller’s office to pick up the treadmill and presented Seller with a check for $750. Seller refused to sell the machine.

The conversation between Buyer and Seller’s co-worker (where the co-worker told Buyer that Seller had sold the treadmill to another employee) should be found by the court to be:

indirect revocation of Seller’s offer.

Buyer and Seller enrolled in their employer’s “Get Fit” program, which required all participants to purchase a treadmill to use in their office during lunchtime. Buyer and Seller were on different floors of the employer’s office building.

Buyer bought an inexpensive treadmill without any bells and whistles. Seller purchased a $2,000 state of the art treadmill with a television screen and calorie counter. After several months, Buyer was pleased to find that he could not get enough of the treadmill. He used it every chance he got. Seller, on the other hand, lost interest in the treadmill and dropped out of the “Get Fit” program. When Seller heard how much Buyer enjoyed the program, he wrote Buyer an e-mail describing his treadmill and explaining he had lost interest in the fitness program. The e-mail provided, “If you pick up the treadmill at my office during business hours within the next three weeks, I will let you have it for $750.”

Buyer got busy at work and was unable to pick up the treadmill. Two weeks after Buyer received the offer, Seller’s co-worker was at a meeting with Buyer and accurately told Buyer that Seller had already sold the treadmill to another employee. The co-worker was a good friend of Seller’s and a trustworthy individual.

Nevertheless, the next day, Buyer went to Seller’s office to pick up the treadmill and presented Seller with a check for $750. Seller refused to sell the machine.

The Restatement (Second) of Contracts rule providing that the death of the offeror terminated the offeree’s power of acceptance is:

Consistent with the subjective theory, but inconsistent with the objective theory of contracts.

Seller offers to sell Buyer his vintage Corvette for $50,000. Buyer says, “Give me a week to think about it.” Seller replies, “Sure, no problem.” Buyer dies the next day.

Buyer’s son, Buyer Jr., whom Buyer had told about the offer prior to his death, wrote Seller an e-mail the next day, correctly stating, “This is Buyer Jr., Dad died last night, but in his will he left the car to me. I am the administrator of his estate, so on behalf of his estate, I accept. Tell me where to wire the money.”

Seller has since decided to keep the car and refuses to sell it to Buyer’s estate.

If Buyer’s estate sues Seller for breach of contract, the estate will:

Lose, because Buyer Jr. did not have the power of acceptance even if he was the administrator of the estate.

Buyer ordered a truckload of a particular pesticide from Seller. Before Seller accepted the order, but after Buyer placed the order, the EPA outlawed both the sale and use of that particular pesticide. Seller thereafter accepts the order, believing that because the offer was placed before the EPA’s actions, the order could be legally fulfilled.

May Seller validly accept Buyer’s order?

No, because the pesticide was outlawed before the acceptance was sent.

Sarah Seller offers to sell Brianna Buyer her first year contracts book for $50, on the condition that Sarah’s favorite singer, Angela Acapella, win “U.S.A. Icon,” a popular singing competition. Brianna accepts. Angela got knocked out of the competition early on. Brianna demands that Sarah still sell her the book, but Sarah refuses.

Is Sarah contractually obligated to sell the book?

No, because Angela did not win “U.S.A. Icon.”

Betty Buyer wishes to enclose her back yard with a fence. She reads reviews online and decides that Sam Carpenter is the best choice to construct the fence. On Monday, she leaves Sam a detailed message that includes the address, the exact type of fence she desires, the time for completing the project, a promise she will pay $600 for the job, and the fact that Sam can either call her back and accept or simply show up and begin work. On Tuesday, without speaking to Betty, Sam shows up at her house and begins to build the fence. When he’s more than halfway through, however, Betty runs into her yard and yells “I revoke!” and orders Sam off her property.

Cannot revoke her offer because Sam has begun to perform

On May 1, Owner orally offered to pay Alex $15,000 if Alex would repair the roof on Owner’s beach cottage. Alex requested some time to think it over. Owner told Alex she could have a couple of days to think about it, but that he had to know Alex’s decision no later than May 4.

On May 3, Alex sent a properly addressed e-mail to Owner, accepting the offer. She started working on the roof on May 4.

If Owner’s offer to Alex is considered an offer unambiguously looking for a unilateral contract, which of the following is true?

Alex may cease, without breach, if she has started to perform; but Owner must hold his offer open for a reasonable period of time.

On May 1, Owner orally offered to pay Alex $15,000 if Alex would repair the roof on Owner’s beach cottage. Alex requested some time to think it over. Owner told Alex she could have a couple of days to think about it, but that he had to know Alex’s decision no later than May 4.

On May 3, Alex sent a properly addressed e-mail to Owner, accepting the offer. She started working on the roof on May 4.

For the purposes of this question only, assume Alex began performance on May 4, and that Owner knew of this.

If Owner’s offer to Alex is considered an ambiguous offer, which of the following is true?

Owner would breach the contract if he refused to go forward and revoked the offer, and Alex would breach the contract if she ceased fixing the roof.

Buyer is a furniture store and a regular customer of Seller, who deals in vases. Once an order comes in, Seller selects the vases from inventory, tags them as Buyer’s vases, packages them, and loads them onto a truck to be shipped to Buyer in trucks owned by Seller.

On May 1, Buyer orders 100 vases with a Purchase Order that states, “Order for 100 green vases, Catalogue No. 223, at price per catalogue. Delivery by 6/1” Seller goes through the usual routine: picking the vases, tagging them and loading them onto the truck.

Before the vases leave Seller’s garage, which is the most accurate statement?

Seller cannot terminate the deal, and Buyer cannot revoke without legal consequence.

On January 4, Buyer, a nationwide electronics store, sent a Purchase Order to Seller, a television manufacturer that read, “Send 1,000 Model X–19 52-inch televisions, with delivery by May 15.” Seller did not have enough televisions in stock, and so immediately began to manufacture televisions to fulfill the order.

Seller has no further contact with Buyer until it shipped the televisions on May 8, with delivery guaranteed by May 15.

Which of the following is correct?

Buyer may treat the offer has having lapsed before acceptance.

Retailer sent Manufacturer the following e-mail:

Please immediately send 500 widgets at the listed price of $5/widget. Widgets are urgently needed due to our big sale next week.

/s/ Retailer

Upon receipt of the e-mail, Manufacturer immediately sent Retailer the following response:

We are out of stock of widgets. However, as an accommodation, we are sending you 500 of our semi-widgets at the listed price of $4/semi-widget. Most of our retailers have accepted the semi-widgets as a replacement for the widgets and we believe these will satisfy your customers.

/s/ Manufacturer

Manufacturer sent the semi-widgets the next day. Retailer never responded to the Manufacturer’s e-mail, and the semi-widgets arrived in time for the sale. Retailer returned the semi-widgets rather than put them on sale.

What is the best description of Retailer’s rights arising out of this transaction?

Retailer was not obligated to accept the semi-widgets; however, because it chose not to accept the semi-widgets, it has no right to sue Manufacturer for breach of contract

Owner, a resident of San Francisco, has a vacation home in Palm Springs that he only visits from November–March. Owner makes an offer in June to Painter to repaint the vacation home for $6,000, by September 1. In the offer, Owner let Painter know that Owner would not be at the vacation home until November.

How can Painter accept?

Painter can accept by promise or performance, but if Painter accepts by performance, she must notify Owner or the payment duty of Owner is discharged.

Musician signed up for a monthly streaming music service like Spotify called Musicstream. Under their agreement, Musicstream automatically charged Musician’s credit card $9.95 on the first of each month for that month’s services. The agreement could be cancelled by Musician for any reason, but he had to give thirty days’ notice to do so. Musician had checked out Spotify, which had a promotion going which allowed immediate cancellation with no extra payment, but Musician liked Musicstream’s music library better, and signed up with that company.

Musician was fired from his latest gig and so wanted to trim expenses. He e-mailed Musicstream on February 2 to cancel his account and to promise truthfully that he would no longer listen to any music from the service. Musicstream responded by telling him in a return e-mail that he would be charged for February, but that he would be charged for only one day in March. Musician wanted the charges stopped as of February 1.

If Musician sued Musicstream in small claims court for a refund of the last $9.95 charge on his credit card for the period between February 2 and March 1, Musician should:

Lose, because Musician had given Musicstream reason to understand that assent for thirty days’ worth of service may be manifested by silence or inaction.

Owner owns a plot of undeveloped land in the state of Washegon. Owner went on an extended trip to Europe for several months. While Owner was gone, Contractor, who was having a slow month in terms of business, decided to build a home for Owner on the plot without talking to Owner. Contractor worked day and night for the several months Owner was gone and built a beautiful home. When Owner returned, Contractor told him, “If you use this house, you owe me $500,000 under contract law.” Owner used the house, but was furious and refused to pay.

Contractor sues Owner for breach of contract.

Contractor will:

Lose, because Owner did not have reasonable opportunity to reject the services.

Sam was a landscaper. Both Ashley and Betty owned homes and explained to Sam that they needed their front yards completely landscaped.

On June 15, Sam mailed Ashley and Betty offers to landscape their yards. Sam offered to landscape Ashley’s for $1,000, and offered to do Betty’s yard for $1,500. Both offers stated that Sam’s offer would be open until June 30.

On the morning of June 20, Ashley mailed Sam a properly stamped and addressed letter stating, “I accept your offer.” That afternoon, Ashley spoke with Zack, who said he’d do the job for $700. Ashley immediately mailed a letter to Sam by express mail that read, “Please disregard my other letter. I found someone else to landscape my lawn.”

On June 21, Sam received the letter Ashley sent by express mail. The next day, on June 22, Sam received Ashley’s first letter. Sam demanded that Ashley permit her to do the work for $1,000, but Ashley refused.

On June 24, Betty mailed a letter to Sam stating, “$1,500 is too much, I would agree to pay you $1,000 if you will agree to do the job.” On June 25, Betty spoke to a few other landscapers, who said they would not do the job for less than $2,000. Realizing she could not get a better price, that afternoon Betty sent a letter by express mail to Sam stating, “Disregard my letter of 6/24. I accept your offer.” Sam received both of Betty’s letters on June 26.

On June 27, Betty spoke to Thomas, another landscaper. Thomas said he could to the job for $1,000. Betty immediately called Sam and said (before Sam could say anything), “This is Betty, and the deal is off.” Sam then demanded that Betty permit him to do the work for $1,500. Betty refused.

If Sam sues Ashley for breach of contract, Sam will:

Prevail, because the offer in Ashley’s first letter had legal effect when it was sent, even though Sam did not receive it firs

Sam was a landscaper. Both Ashley and Betty owned homes and explained to Sam that they needed their front yards completely landscaped.

On June 15, Sam mailed Ashley and Betty offers to landscape their yards. Sam offered to landscape Ashley’s for $1,000, and offered to do Betty’s yard for $1,500. Both offers stated that Sam’s offer would be open until June 30.

On the morning of June 20, Ashley mailed Sam a properly stamped and addressed letter stating, “I accept your offer.” That afternoon, Ashley spoke with Zack, who said he’d do the job for $700. Ashley immediately mailed a letter to Sam by express mail that read, “Please disregard my other letter. I found someone else to landscape my lawn.”

On June 21, Sam received the letter Ashley sent by express mail. The next day, on June 22, Sam received Ashley’s first letter. Sam demanded that Ashley permit her to do the work for $1,000, but Ashley refused.

On June 24, Betty mailed a letter to Sam stating, “$1,500 is too much, I would agree to pay you $1,000 if you will agree to do the job.” On June 25, Betty spoke to a few other landscapers, who said they would not do the job for less than $2,000. Realizing she could not get a better price, that afternoon Betty sent a letter by express mail to Sam stating, “Disregard my letter of 6/24. I accept your offer.” Sam received both of Betty’s letters on June 26.

On June 27, Betty spoke to Thomas, another landscaper. Thomas said he could to the job for $1,000. Betty immediately called Sam and said (before Sam could say anything), “This is Betty, and the deal is off.” Sam then demanded that Betty permit him to do the work for $1,500. Betty refused.

Assume Betty’s first letter (the letter not sent by express mail) was received on the morning of June 26, and Betty’s letter sent by express mail was received on the afternoon of June 26. If Sam sues Betty for breach of contract Sam will:

Lose, because Sam received Betty’s first letter before Sam received the letter Betty sent by express mail.

Sam was a landscaper. Both Ashley and Betty owned homes and explained to Sam that they needed their front yards completely landscaped.

On June 15, Sam mailed Ashley and Betty offers to landscape their yards. Sam offered to landscape Ashley’s for $1,000, and offered to do Betty’s yard for $1,500. Both offers stated that Sam’s offer would be open until June 30.

On the morning of June 20, Ashley mailed Sam a properly stamped and addressed letter stating, “I accept your offer.” That afternoon, Ashley spoke with Zack, who said he’d do the job for $700. Ashley immediately mailed a letter to Sam by express mail that read, “Please disregard my other letter. I found someone else to landscape my lawn.”

On June 21, Sam received the letter Ashley sent by express mail. The next day, on June 22, Sam received Ashley’s first letter. Sam demanded that Ashley permit her to do the work for $1,000, but Ashley refused.

On June 24, Betty mailed a letter to Sam stating, “$1,500 is too much, I would agree to pay you $1,000 if you will agree to do the job.” On June 25, Betty spoke to a few other landscapers, who said they would not do the job for less than $2,000. Realizing she could not get a better price, that afternoon Betty sent a letter by express mail to Sam stating, “Disregard my letter of 6/24. I accept your offer.” Sam received both of Betty’s letters on June 26.

On June 27, Betty spoke to Thomas, another landscaper. Thomas said he could to the job for $1,000. Betty immediately called Sam and said (before Sam could say anything), “This is Betty, and the deal is off.” Sam then demanded that Betty permit him to do the work for $1,500. Betty refused.

For the purposes of this question only, assume that the letter Betty sent by express mail was received on the morning of June 26, and Betty’s first letter (the letter not sent by express mail) was received on the afternoon of June 26. If Sam sues Betty for breach of contract Sam will:

Prevail, because Sam received the letter Betty sent by express mail before Sam received Betty’s first letter.

Owner calls professional plumber to his home and describes the work he wants done. Plumber says, “I estimate the work will take four hours and I charge $60/ hour. So my estimate is $240.” Owner says, “That sounds reasonable. Go ahead.”

Assuming no further communications between the parties, which is the most accurate statement?

The parties are not in an enforceable contract.

Owner calls professional plumber to his home and describes the work he wants done. Plumber says, “I estimate the work will take four hours and I charge $60/ hour. So my estimate is $240.” Owner says, “That sounds reasonable. Go ahead.”

Assume for this problem only that Plumber does the work described by Owner, but it reasonably and in good faith takes her 4 ½ hours to complete. She submits a bill to Owner of $270, constituting 4 ½ hours at $60/hour.

It turns out Plumber is expensive for the area. Most plumbers would only charge $50/hour, although it would take them 4 ½ hours to do the work as well. As such, their bills to Owner would be $225, constituting 4 ½ hours at $50/hour. However, assume they, too, would have estimated that the job would only take four hours, meaning their estimate would have been 4 hours at $50/hour, or $200.

How much does Owner owe Plumber?

$270 (4 ½ hours x $60).

Dr. Brown, the Head of Trauma Care at prestigious University Hospital, comes across an unconscious car accident victim in the road on her way home. She applies her considerable skill and stabilizes the severely injured man. However, the injuries were too severe, and the man dies in the hospital.

As one of the foremost trauma care specialists in the world, Dr. Brown routinely charges $2,000 per visit when she sees patients in her office. A normal trauma doctor in the area where she practices charges $400 per visit.

If Dr. Brown sought payment from the injured victim’s estate, which is the most accurate statement:

She would be entitled to $400.

Barry, a broke but aspiring chef heard that Francis French–Fry, a famous chef, was giving a free demonstration at a local cooking school. Barry went to the demonstration and was impressed with Francis’s culinary skills. After the demonstration, Francis and his assistants went through the crowd to answer questions and let audience members know that Francis was giving cooking classes every Sunday morning for the next fourteen weeks for $550. For the next fourteen Sunday mornings, however, Barry showed up at the cooking school and participated in the baking lessons. Due to some administrative mix-up, Barry was not initially charged, but Francis is now seeking payment.

What, if anything, will Barry be required to pay for the lessons?

The full $550, under an implied-in-fact contract theory.

On October 1, Doggy Daycare (“Daycare”) sends its own “Purchase Order” form to a dog food supply company (“Company”). The Purchase Order has blanks for type of food, quantity, price and delivery date, all of which Daycare fills in. Pre-printed Clause 15 in the Purchase Order requires Company to use the United States Postal Service for delivering the dog food.

Company receives the Purchase Order, and fills in the blanks in its own “Acceptance of Purchase Order” form. Company fills in the same information regarding type of food, quantity, price, and delivery date as were in the Purchase Order and sends the Acceptance form back to Daycare. However, pre-printed Clause 25 in the Acceptance form states that delivery will be done by U.P.S.

Daycare received the Acceptance form and checked to ensure that the type of food, quantity, price, and delivery date was correct and placed the form in its files.

The stated delivery date comes and goes, however, and Company never delivers the dog food. There is no communication between Company and Daycare other than set forth above.

Is Company liable to Daycare for breach of contract?

Yes, even though there was a discrepancy in the shipping terms between the Purchase Order form and the Acceptance form.

Contractor orders windowpanes from Supplier. Two clauses of Contractor’s Purchase Order provide:

All windowpanes supplied under this resulting contract shall be of stainable quality.

Acceptance of this Purchase Order is limited to terms of the Purchase Order. (“Limitation Clause”)

Supplier immediately sends Contractor an Acceptance of Purchase Order form that is identical to the Purchase Order form, with the exception of: (1) there is no Limitation Clause; and (2) there is a clause which provides:

Supplier warrants that its products are only of paintable, not stainable quality.

The windowpanes are timely shipped and are accepted by Contractor. However, a few weeks later, when Contractor installed the windows and began staining them, he discovered they were not of stainable quality, but of a lesser, paintable quality only.

Contractor sues Supplier for breach of contract, claiming the contract was for stainable quality windowpanes, not the paintable quality windowpanes Supplier sent.

In his suit for breach of contract, Contractor will likely:

Prevail, because Supplier breached the contract when it sent windowpanes that were not of stainable quality.

Buyer submits a Purchase Order for 500 pounds of grapes at a price of $3 per pound. Seller then sends a “confirmation” acknowledging Buyer’s order for “500 pounds of bananas” at a price of $18 a pound. No further communication is exchanged between the parties.

Are Buyer and Seller in an enforceable contract?

No, the two do not have a contract because their forms were too different.

Buyer sent Seller a Purchase Order for 1,500 laptops at a price of $400 per laptop, and the Purchase Order had a clause stating that Buyer would have one year to make any breach of warranty claim. Seller sent Buyer an Acknowledgment confirming it would send 1,500 laptops at $400 per laptop. The Acknowledgment was identical to the purchase order, with these exceptions:

1. Any warranty claim for a laptop supplied under this contract must be asserted within ninety days.

2. Seller’s acceptance is hereby expressly made conditional on Buyer’s assent to the additional and different terms of this Acknowledgment.

The Purchase Order and Acceptance were the only communications regarding the contract exchanged between the parties. (Assume there are no unconscionability issues).

The laptops have not yet been sent. Which is the most accurate statement?

The two are not in an enforceable contract.

Buyer sent Seller a Purchase Order for 1,500 laptops at a price of $400 per laptop, and the Purchase Order had a clause stating that Buyer would have one year to make any breach of warranty claim. Seller sent Buyer an Acknowledgment confirming it would send 1,500 laptops at $400 per laptop. The Acknowledgment was identical to the purchase order, with these exceptions:

1. Any warranty claim for a laptop supplied under this contract must be asserted within ninety days.

2. Seller’s acceptance is hereby expressly made conditional on Buyer’s assent to the additional and different terms of this Acknowledgment.

The Purchase Order and Acceptance were the only communications regarding the contract exchanged between the parties. (Assume there are no unconscionability issues).

Assume the laptops were sent and Buyer accepted and paid for them. Which is the most accurate statement?

The two are in a valid contract with the warranty claims period determined by what the law would provide if the parties had not included the one year or ninety day period in their forms.

Buyer sent Seller a Purchase Order for 1,000 apples at a price of $1/apple. Buyer’s Purchase Order expressly limits its acceptance to the terms of the offer.

Seller responded with an Acknowledgement form and the form is identical to Buyer’s Purchase Order, except for the following two clauses:

1. Any dispute under the resulting contract shall be settled by arbitration by the American Arbitration Association under then-pending Commercial Arbitration Rules.

2. Seller’s acceptance is subject to all the terms and conditions in this document, including arbitration.

Seller delivered apples and Buyer accepted. However, several months later Buyer and Seller had a dispute. Buyer sued in district court and Seller moved to dismiss the suit, claiming the dispute had to be arbitrated. Both Buyer and Seller are merchants.

Should the court rule that the dispute must be arbitrated?

No, because the “subject to all the terms” clause was insufficient to turn the acceptance into a counteroffer.

Buyer sends Seller a Purchase Order for 1,000 t-shirts at $5 per t-shirt. There is no clause limiting the acceptance of the Purchase Order to its terms.

Seller timely sends an “Acceptance of Purchase Order” that has the same terms as the Purchase Order except the following, which was prominently and conspicuously displayed: “Under this contract there is no implied warranty of merchantability.” This clause is known as a “warranty disclaimer.”

Both Buyer and Seller are merchants, and assume that Seller’s Acceptance of Purchase Order is an effective acceptance.

Is the warranty disclaimer part of the contract?

No, because both Buyer and Seller are merchants and the warranty disclaimer materially alters the contract.

Buyer, a department store chain, sends Seller a Purchase Order for 1,000 t-shirts at $5 per t-shirt every month for the next ten months. Payment is due thirty days after receipt of the shirts. There is no clause limiting the acceptance of the Purchase Order to its terms.

Seller timely sends an “Acceptance of Purchase Order” that has the same terms as the Purchase Order except the following: “Seller has the option to cancel this contract and refuse to send any additional shirts under it upon Buyer’s failure to meet [pay] any one invoice when due.” This clause is known as the “one invoice default clause.”

Both Buyer and Seller are merchants, and assume that Seller’s Acceptance of Purchase Order is an effective acceptance.

Is the one invoice default clause part of the contract?

No, because both Buyer and Seller are merchants and the one invoice default clause materially alters the contract.

Buyer, a department store chain, sends Seller a Purchase Order for 1000 t-shirts at $5 per t-shirt every month for the next ten months. Payment is due thirty days after receipt of the shirts. There is no clause limiting the acceptance of the Purchase Order to its terms.

Seller timely sends an “Acceptance of Purchase Order” that has the same terms as the Purchase Order except the following: “Seller will charge interest at 6% per year on overdue invoices.” This clause is known as the “overdue interest clause.”

Both Buyer and Seller are merchants, and assume that Seller’s Acceptance of Purchase Order is an effective acceptance.

Is the overdue interest clause part of the contract?

Yes, because both Buyer and Seller are merchants and the overdue interest clause does not materially alter the contract.

Buyer sends Seller a Purchase Order for 500 laptops at $600 per laptop. Seller sends Buyer an Acknowledgment that is the same as Buyer’s Purchase Order with the exception of a clause that states that all disputes arising under the contract must be resolved in arbitration, rather than litigation (“arbitration clause”). Buyer receives the forms and immediately reads the arbitration clause. He immediately calls Seller and tells her that he objects to the arbitration provision. Both Buyer and Seller are merchants.

Is the arbitration clause part of the contract?

No, because Buyer gave Seller notification of objection within a reasonable time after Buyer received notice of the additional term.

Rip–Off, a retailer, advertised vintage Ed Hardy t-shirts for $200 on Amazon.com. Buyer, an individual, e-mailed an offer to purchase one of the shirts, giving his credit card. Rip–Off e-mailed back an “Acceptance of Offer,” which had identical terms to the offer except that it included a clause requiring that any dispute under the agreement had to be decided by arbitration and not litigation (“arbitration clause”).

Assume that Rip–Off’s Acceptance of Offer is an effective acceptance.

Is the arbitration clause part of the contract?

No, unless Buyer specifically agrees to the arbitration clause.

Which of the following statements is (are) FALSE:

I. If there is a contract made by telephone, and Seller thereafter sends a “Confirmation of Order” to Buyer, the situation is not governed by UCC § 2–207 since there is only one form exchanged between the parties.

II. If an offeror provides in its offer that it refuses to engage in arbitration of disputes under the resulting contract, absent a change of heart by the offeror, there can never be an effective arbitration provision in the parties’ final contract (so long as the agreement is formed by an exchange of forms), even if the court determines that an arbitration clause does not materially alter the deal.

III. A clause limiting the time under which the seller must act on complaints made by the buyer will always materially alter the deal.

I and III only.

The following question concerns the "battle of the forms," a topic that may or may not be covered in your course.

If an expression of acceptance states “different” terms from those found in the offer, which approach has been, or which approaches have been, used by courts to determine if the different terms become a part of the contract?

All of the above have been used by courts.

The following question concerns the "battle of the forms," a topic that may or may not be covered in your course.

Buyer sends Seller a Purchase Order for 1,000 notebooks at $3 per notebook. The Purchase Order specifies that the notebooks will be delivered to Buyer’s store by October 1. There is no limitation of acceptance to the terms of the offer clause in the Purchase Order nor is there a clause by which the Buyer states that no other delivery date will be acceptable.

Upon receipt of the Purchase Order, Seller sends Buyer an Acknowledgment form confirming the purchase of 1,000 notebooks at $3 each. However, Seller’s form states that the notebooks will be delivered to Buyer’s store by October 5.

The exchange of the forms is the only relevant communication between the parties.

Under the approach to “different” terms that finds support in UCC § 2–207, Cmt. 3, what will the delivery date be?

October 5, unless the delivery date materially alters the offer.

The following question concerns the "battle of the forms," a topic that may or may not be covered in your course.

Buyer sends Seller a Purchase Order for 1,000 notebooks at $3 per notebook. The Purchase Order specifies that the notebooks will be delivered to Buyer’s store by October 1. There is no limitation of acceptance to the terms of the offer clause in the Purchase Order nor is there a clause by which the Buyer states that no other delivery date will be acceptable.

Upon receipt of the Purchase Order, Seller sends Buyer an Acknowledgment form confirming the purchase of 1,000 notebooks at $3 each. However, Seller’s form states that the notebooks will be delivered to Buyer’s store by October 5.

The exchange of the forms is the only relevant communication between the parties.

Under the “literalist” approach, what will the delivery date be?

October 1, unless Buyer specifically and separately agrees to an October 5 delivery date.

The following question concerns the "battle of the forms," a topic that may or may not be covered in your course.

Buyer sends Seller a Purchase Order for 1,000 notebooks at $3 per notebook. The Purchase Order specifies that the notebooks will be delivered to Buyer’s store by October 1. There is no limitation of acceptance to the terms of the offer clause in the Purchase Order nor is there a clause by which the Buyer states that no other delivery date will be acceptable.

Upon receipt of the Purchase Order, Seller sends Buyer an AcknowThe following question concerns the "battle of the forms," a topic that may or may not be covered in your course.

Buyer sends Seller a Purchase Order for 1,000 notebooks at $3 per notebook. The Purchase Order specifies that the notebooks will be delivered to Buyer’s store by October 1. There is no limitation of acceptance to the terms of the offer clause in the Purchase Order nor is there a clause by which the Buyer states that no other delivery date will be acceptable.

Upon receipt of the Purchase Order, Seller sends Buyer an Acknowledgment form confirming the purchase of 1,000 notebooks at $3 each. However, Seller’s form states that the notebooks will be delivered to Buyer’s store by October 5.

The exchange of the forms is the only relevant communication between the parties.

Under the “Cmt. 6” theory, what will the delivery date be?ledgment form confirming the purchase of 1,000 notebooks at $3 each. However, Seller’s form states that the notebooks will be delivered to Buyer’s store by October 5.

The exchange of the forms is the only relevant communication between the parties.

Under the “Cmt. 6” theory, what will the delivery date be?

There is no delivery term and a gap filler will have to be used to establish this term.

Priscilla and Sarah enter into an agreement by which Priscilla would build a custom patio cover for Sarah’s new home. They agreed as to the price ($1,200) and the design, but they did not agree on a start or completion date, but rather they agreed to figure it out at a later date.

Six months after they made the agreement, Priscilla had not started construction on the patio cover and there was no other communication between them. Sarah has now sued Priscilla for breach of contract.

In a jurisdiction that follows common law rules, Sarah will likely:

Lose, because the terms of the contract were too indefinite.

Landlord leased a commercial space to Tenant who wanted to use the space as a restaurant. The lease was for ten years and contained an “option to purchase” clause, allowing Tenant to purchase the property at the end of the lease term. The lease provided that the Tenant had to give notice of its intention to exercise the option six months before the lease ended, but contained no language about the purchase price or language indicating the parties agreed to agree on the price later.

Tenant gave timely notice of its intention to exercise the option to purchase the building nine and a half years into the lease, but Landlord refused to sell, arguing there was no enforceable agreement as to the sale of the building because no price was set and no mechanism for determining the price was mentioned in the lease.

In an action by Tenant against Landlord for breach of contract in a jurisdiction that follows the Restatement 2d, what is the likely result?

Judgment for Tenant, and the sale must take place at a reasonable price.

Mr. and Mrs. Smith contract with Paul’s landscaping service to “landscape our home in Orange County,” twice a month for $150. Unknown to Paul, Mr. and Mrs. Smith have three homes in Orange County: one in Huntington Beach; one in Newport Beach, and one in Irvine.

Paul shows up at the Huntington Beach home on a Saturday when the Smiths are there and they let Paul in the gate to perform the landscaping services. The grounds of the Huntington Beach home were the smallest of the Smiths’ three homes, and the fair market value of his services at the Huntington Beach home was only $100.

Now, Mr. and Mrs. Smith refuse to pay anything, claiming the contract was for the Irvine house. Their argument is the contract was unenforceable based on indefiniteness as to which residence was intended.

In an action by Paul for payment, what result?

The contract is enforceable because Paul was allowed to landscape the Huntington Beach home by the Smiths, and Paul is entitled to $150.

Buyer and Seller entered an agreement by which Buyer was to purchase 200 widgets at $1 per widget. This is the first transaction between the parties and there is no applicable usage of trade. The parties agree that Seller is to deliver the goods to Buyer, but the parties do not determine the exact date of delivery.

Under the UCC, when would the Seller be required to deliver the widgets?

Within two weeks of the agreement, if the court determines that is a reasonable time.

Buyer and Seller entered an agreement by which Buyer was to purchase 200 widgets at $1 per widget. This is the first transaction between the parties and there is no applicable usage of trade. The parties agree that Seller is to deliver the goods to Buyer, but the parties do not determine the exact date of delivery.

For this question only, assume that delivery was set for January 1, but the parties did not agree where delivery of the widgets was to take place or when payment for the widgets was due. Under the UCC, where would delivery take place and when would payment be due?

Delivery is to occur at Seller’s place of business, with payment due when Buyer receives the goods.

Buyer and Seller entered an agreement by which Buyer was to purchase 200 widgets at $1 per widget. This is the first transaction between the parties and there is no applicable usage of trade. The parties agree that Seller is to deliver the goods to Buyer, but the parties do not determine the exact date of delivery.

For this question only, assume that delivery was set for January 1, Seller was to deliver them to Buyer’s place of business with payment on delivery, but the parties did not stipulate if the widgets were to be delivered in one single lot or in multiple installments. Under the UCC, how would Seller be required to deliver the widgets?

Buyer can demand delivery in multiple lots if he does not have the storage space for a single delivery and it would not be an inconvenience to Seller.

Contractor reaches an agreement with Supplier under which Supplier will provide a “truck-load” of lumber for a single-family home that Contractor is building. The parties agreed that the “truck-load” would cost $2000 and delivery was to take place at the jobsite on June 1. The lumber is to be Coastal Pine of excellent quality. Supplier believes that a “truck-load” is 1,000 pounds of lumber.

Which of the following is an accurate statement?

All of the above are accurate.

Dealership and Manufacturer reach an agreement on July 1 under which Manufacturer is to deliver to Dealership a shipment of new cars for Dealership’s summer sale, but the parties do not agree on the date for delivery. The cars are to be delivered in one lot, which is the first and only order and delivery under this agreement.

It is customary in the car business that delivery is to take place two weeks after agreement. However, Dealership and Manufacturer, in all of their past dealings, which included multiple shipments of cars for special sales, have set delivery for one month after agreement.

On July 10, Manufacturer receives an order from another car dealership, and begins work on that order which delays delivery of Buyer’s order until July 30.

Under the UCC, has Seller breached the contract for failing to deliver the cars on time?

No, because delivery by August 1 would be operative due to course of dealing.

Uncle David, a successful businessman, made a promise to his 14-year-old nephew Paul in front of the 100 people present at David’s 50th birthday party. Uncle David promised that if Paul refrained from playing football in high school and college, when Paul turned 21, David would give him $25,000. David was very fearful that Paul would suffer a concussion playing football and hoped that, with football out of the way, there would be nothing to stand in Paul’s way to a successful business career and taking over David’s company later in life. Paul refrained from playing the sport. Upon turning 21, he demanded the $25,000 promised, but David refused to pay.

In an action to enforce the promise, who will prevail? (For purposes of this question, ignore any issues regarding the capacity of a teenager to contract and assume that Paul could enter into a contract in the relevant jurisdiction, and otherwise assume Restatement 2d of Contracts rules apply).

Paul, because Paul’s refraining from playing football was adequate consideration to enforce the promised payment.

Aunt Mary was a rich widow who loved her adult nephew Bill. However, Bill had come across tough times and had become addicted to cocaine. In order to help him put his life together, she invited him to her home and sat down with him in front of friends, family, clergy, and the local newspaper and told him, “Bill, if you forego cocaine for 5 years, I will give you $100,000 to build a new life.” Assume the jurisdiction follows the Restatement 2d.

If Bill later seeks to enforce the promise after foregoing cocaine, will he prevail?

No, because the promise was not supported by consideration.

Patty, a young college graduate, had saved up $5,000 while working on the weekends during her college years. She needed a car to go out for interviews to obtain a professional job and knew her uncle Donald had a car he was not using. She explained her situation to Donald who offered to sell it to her for the $5,000 she had saved to help her out with her job hunt, even though both Patty and Donald knew that similar cars were selling for no less than $8,000 on Autotrader.com and other car selling sites. She accepted on the spot and wrote him a check there and then, which Donald put in his wallet. However, the next day, when she went to pick up the keys and arrange for title to be transferred, Donald said he could no longer give her the car for that price and gave her back her check.

In an action for breach of contract, who will prevail?

Patty, because there was a bargained-for exchange.

All of the following took place in a jurisdiction that follows the Restatement 2d.

Professor Smith looked out his front window one day when he heard some screeching tires. He immediately turned and saw his neighbor Peter hit by a car driven by Daniel.

Dr. Jones, who was driving by, stopped and treated Peter and took him to the hospital. Despite Dr. Jones’s rapid response and competent, expert treatment, Peter died from his wounds at the hospital a few days later.

Professor Smith felt horrible about the whole situation because he had called Peter and asked him to come over because Professor Smith had some homemade cookies he wanted to give Peter.

In order to cheer up Professor Smith, three of his students washed and groomed his prized poodle. The following day, to show his thanks, Smith promised the students he would pay them each $20. (The reasonable value of the wash and grooming was $150).

Although Professor Smith was not legally responsible for Peter’s accident, he felt responsible because Peter was coming to see him and because of that, he promised Peter’s widow $10,000 a week after the crash.

Who, if anyone, is obligated to pay Dr. Jones for the treatment of Peter?

Peter’s Estate.

All of the following took place in a jurisdiction that follows the Restatement 2d.

Professor Smith looked out his front window one day when he heard some screeching tires. He immediately turned and saw his neighbor Peter hit by a car driven by Daniel.

Dr. Jones, who was driving by, stopped and treated Peter and took him to the hospital. Despite Dr. Jones’s rapid response and competent, expert treatment, Peter died from his wounds at the hospital a few days later.

Professor Smith felt horrible about the whole situation because he had called Peter and asked him to come over because Professor Smith had some homemade cookies he wanted to give Peter.

In order to cheer up Professor Smith, three of his students washed and groomed his prized poodle. The following day, to show his thanks, Smith promised the students he would pay them each $20. (The reasonable value of the wash and grooming was $150).

Although Professor Smith was not legally responsible for Peter’s accident, he felt responsible because Peter was coming to see him and because of that, he promised Peter’s widow $10,000 a week after the crash.

What are Professor Smith’s obligations regarding the students?

He is not legally obligated to pay the students anything.

All of the following took place in a jurisdiction that follows the Restatement 2d.

Professor Smith looked out his front window one day when he heard some screeching tires. He immediately turned and saw his neighbor Peter hit by a car driven by Daniel.

Dr. Jones, who was driving by, stopped and treated Peter and took him to the hospital. Despite Dr. Jones’s rapid response and competent, expert treatment, Peter died from his wounds at the hospital a few days later.

Professor Smith felt horrible about the whole situation because he had called Peter and asked him to come over because Professor Smith had some homemade cookies he wanted to give Peter.

In order to cheer up Professor Smith, three of his students washed and groomed his prized poodle. The following day, to show his thanks, Smith promised the students he would pay them each $20. (The reasonable value of the wash and grooming was $150).

Although Professor Smith was not legally responsible for Peter’s accident, he felt responsible because Peter was coming to see him and because of that, he promised Peter’s widow $10,000 a week after the crash.

What are Professor Smith’s obligations regarding Peter’s widow?

He is not obligated to pay the widow anything.

While negligently driving his father’s uninsured car, Aaron crashed into a car driven by Brittany. Both Aaron and Brittany were injured. Aaron’s father Carlos, reasonably but incorrectly believing that he would be liable as owner of the vehicle in the jurisdiction, told Brittany that he would “see that she was reimbursed for any losses” she incurred as a result of the accident. At all times relevant, assume Brittany had no thought of suing Carlos.

In an action by Brittany against Carlos for lost wages while she recuperated from the accident, which of the following would be Carlos’s best defense?

Lack of consideration.

While on a cruise, Alex, Brett’s adult son, fell ill for several weeks. Another passenger on the ship, Cornelius, took care of Alex in his ill state. Alex did not have any additional money to pay Cornelius for his care, but Brett wrote to Cornelius expressing his thanks and promised to reimburse Cornelius for any expenses incurred in caring for Alex. Alex and Cornelius returned to their respective homes after the cruise, and Cornelius sent Brett a list of expenses from Alex’s care. Brett refused to pay the expenses.

In a suit by Cornelius to enforce Brett’s promise, Cornelius will:

Lose, because the promise was not supported by adequate consideration.

Borrower owes $10,000 to Lender, but fails to pay it back. The debt consists of a loan with a $7,500 principal, and $2,500 interest on the principal. The statute of limitations has expired and thereafter Borrower tells Lender that he is sorry and promises, “I will pay you back $7,500 by January 31 of the following year” (“January 31 Promise”). Borrower fails to pay the agreed amount by January 31.

In a jurisdiction that follows the Restatement 2d of Contracts, which of the following most accurately states Borrower’s obligation to Lender?

Borrower enforceably owes Lender $7,500.

Dell Computers entered into an exclusive dealing agreement with Best Buy whereby Best Buy was granted the exclusive right to sell its computers nationwide in return for 60% of the sales price of any Dell computers sold, if any. The parties agreed to an initial shipment of 10,000 computers, with more computers to be shipped later, upon mutual agreement, once the initial shipment was sold.

Which of the following best describes Best Buy’s obligations to Dell Computers under the agreement?

Best Buy is required to use “best efforts” in trying to sell Dell computers, but is not obligated to sell any computers.

Sammy’s Scrap Heap entered into a written contract with Carl’s Car Parts under which Sammy’s would supply, and Carl’s would buy, all of the excess scrap metal that Carl’s required from Sammy’s. Sammy’s obtained its supply of scrap from old cars that were donated or that it bought from the city impound. Carl’s ordinarily needed 200 pounds of scrap every month, and that quantity was put in the contract as a good faith monthly estimate that Sammy’s would be required to furnish.

For six months, orders by Carl’s varied between 175–225 pounds. However, one month Carl’s received an extremely large order of car parts and ordered 1,000 pounds from Sammy’s, which Carl’s actually and in good faith needed, but Sammy’s refused to supply that much.

If Carl’s sues Sammy’s for failing to deliver the 1,000 pounds, Carl’s will most likely:

Lose, because of the stated estimate and previous purchases made by Carl’s.

Sammy’s Scrap Heap entered into a written contract with Carl’s Car Parts under which Sammy’s would supply, and Carl’s would buy, all of the excess scrap metal that Carl’s required from Sammy’s. Sammy’s obtained its supply of scrap from old cars that were donated or that it bought from the city impound. Carl’s ordinarily needed 200 pounds of scrap every month, and that quantity was put in the contract as a good faith monthly estimate that Sammy’s would be required to furnish.

For six months, orders by Carl’s varied between 175–225 pounds. However, one month Carl’s received an extremely large order of car parts and ordered 1,000 pounds from Sammy’s, which Carl’s actually and in good faith needed, but Sammy’s refused to supply that much.

Assume that Carl’s in good faith ordered the stated estimate of 200 pounds instead of the 1,000 in the pertinent month. Sammy’s states that it is no longer going to deliver any scrap under the contract because, while it was making a few cents a pound when the contract started, it is now losing a few cents per pound under the deal because of increased energy costs.

If Carl’s sues Sammy’s for failing to deliver, Carl’s should:

Prevail, because 200 pounds is reasonable in light of course of dealing under the contract.

Tony’s Trucking agreed to transport lumber from Larry’s forest property in Oregon to Larry’s lumber yard in Northern California. The price was fixed at $1,000 per truckload and the contract was for a four year term. Three years into the agreement, the price of gasoline unexpectedly and suddenly rose from $3.10 per gallon (the gas price at the start of the contract) to $4.50 per gallon. As a result of the increase, Tony is now losing money on each delivery.

Tony asks Larry if he would be willing to raise the price from $1,000 to $1,250 per truckload for the remaining year of the contract which would allow Tony to stop losing money and break even. Larry agrees to this.

In a jurisdiction which follows the Restatement 2d of Contracts, is Larry’s promise to pay $1,250 per delivery enforceable?

Yes, because the modification is fair and equitable in light of circumstances not anticipated when the contract was entered into.

Uncle told Nephew that he would give Nephew a valuable gold watch (worth $12,000) if Nephew would drive 400 miles to Uncle’s house to pick it up. Uncle didn’t like Nephew all that much, but Nephew was his only living relative and Uncle felt that his valuable watch should stay within the family. Nephew took two days off from work and drove the 400 miles to Uncle’s house. When he got there, Uncle told Nephew that he had changed his mind and did not wish to part with the watch at this time.

Does Nephew have a viable claim under any theory against Uncle?

Yes, if a court finds that justice requires enforcement.

At a family reunion, Pauline sat next to her grandmother Daniella. She told her that she was hoping to go to Paris the following summer after graduation. That spring, she received a card from her grandmother wishing her safe travels with a note stating: “Because of your trip, I will transfer $2,000 into your savings account when you return.” Relying on the card and note, Pauline went to Paris and spent $1,000 of her savings on the trip. However, when she returned, Daniella refused to transfer the $2,000.

To what extent, if any, can Pauline enforce her grandmother’s promise to pay her, in a jurisdiction governed by the Restatement 2d?

The promise is enforceable, but only for $1,000.

Donee calls a St. Jude’s telethon to contribute to the charity and pledges $500. However, when the charity later calls Donee back to inquire when to expect its payment, Donee tells them that she has changed her mind and that she will no longer be donating.

In a jurisdiction controlled by the Restatement 2d of Contracts, in an action by St. Jude’s seeking the pledge, who will prevail?

St. Jude’s, because it is a charitable organization, even if St. Jude’s did not rely on the pledge.