Linda runs a manufacturing company. The company makes custom computer systems for users who play video games. She agrees to sell one of the “scratch and dent” computers from the company’s warehouse to Doug, who is 16 years old, if Doug promises to pay for the computer by picking up trash in the company parking lot every day after school for the entire school year. Doug picks up the computer, then shows up after school and picks up trash for the first week of school. After that, he never shows up again and refuses to return the computer. Does the company have a breach of contract claim against Doug?
Seller contracts to manufacture widgets at a specified price for Buyer, based upon technical specifications provided by Buyer. The technical specifications called for the use of “Class A Widget Adhesive.” Seller is concerned that it may not be able to acquire Class A Widget Adhesive, but Buyer assures Seller that Buyer can always find Class A Widget Adhesive at a specified price. Thus, the parties include in their contract the following provision: “Seller’s obligation to produce the widgets is expressly conditional upon Buyer providing 20 kg of Widget Adhesive to Seller at $100 per kg by no later than July 1.” Seller has promised to deliver the widgets on or before December 1. On April 1, Seller contacts Buyer and states that Buyer will not need to procure the Class A Widget Adhesive, as Seller has found an alternative source at a lower price.
Which of the following contracts is most likely to be enforced by way of the remedy of specific performance?
Seller offers to sell his home to Buyer for $180,000. Buyer inspects the home and mails a written acceptance letter indicating that “I agree to buy the home for $180,000, including all of the furniture and window treatments in the house when I inspected it today.” Choose the best answer:
Jenna contracts with Reardon for Reardon to pave Jenna’s employee parking lot at a cost of $18,000. Reardon delegates his duty to perform the work to Mandy. Mandy paves the lots, but some defects in her work result in damages to Jenna in the amount of $5,000.
Manager interviews Candidate. At the end of the interview, Manager offers to hire Candidate on a one-year contract with a salary of $38,000, plus health insurance. Candidate says that he’d have to think about the offer, but that “I’d agree to start tomorrow if the offer was for $50,000.” Manager responds by saying, “I’ll have to ask my boss about that and get back to you.” That night, Manager texts Candidate the message: “Found someone else for the position, but thanks for interviewing and best of luck.” Choose the best answer:
General Contractor enters into a contract with a subcontractor for the provision of sufficient concrete on the job site necessary to complete all concrete work according to the contract specifications. The contract provides that “any failure to comply with the strict terms of this contract subjects the subcontractor to a $10,000 penalty which the subcontractor agrees shall be paid on demand.”
Seller contracts to sell Buyer 1,000 widgets for $1,000. Buyer pays $1,000 for the widgets at the time of contract. At the time of the contract, the fair market value of widgets is $1.50 per widget. At the time of delivery the fair market value of widgets is $2.00 per widget. However, the 1,000 widgets tendered by Seller are painted with the wrong color of paint, a defect which reduces their market value to $1.25 per widget. Buyer accepts the defective widgets.
Able contracts with Baker for Able to paint Baker’s two-story house. The price is $2,500, payable on completion of the house. Prior to the contract, Able met with Baker, looked at the house, and discussed the kind of paint that Able would use and the timing of the completion of the work. Able starts painting the house on Monday Monday afternoon, after Able has painted only one side of the house, Able tells Baker that he will require an additional $500 to finish the job. Baker promises to pay Able $3,000 upon completion of the house. Choose the best answer:
TriCo contracts with ByCo to sell 100 car engines at a cost of $2,000 each. TriCo agrees to deliver the engines in three installments of 100 engines each on April 1, May 1, and June 1. On April 1, TriCo delivers 98 engines together with a note stating that the remaining two engines would be delivered the following day and that all future deliveries would be complete and timely. Does ByCo have to accept the delivery of 98 engines?
Gerard loans Larry $40,000. Larry promises to repay Gerard in 12 months. After 12 months, Larry still has not repaid Gerard. Gerard tells Larry’s wife, Linda, that Gerard will “hold off on suing your husband to get my money back for as long as I feel like it” if Linda will agree in writing to guarantee Larry’s obligation to repay the debt. Linda signs a note promising to guarantee Larry’s debt. What is Linda’s best defense to an action by Gerard to enforce the guarantee?
Shawl-Mart places an advertisement online, using a social-media company’s advertising distribution system. The advertisement includes a photograph of a wool shawl with the following message: “Get this cashmere wool shawl, for $10, only at your local Shawl-Mart! Regularly priced at $130!” Gert sees the advertisement and races to her local Shawl-Mart to buy the shawl. When she tells the manager, “I want one of those shawls I saw on the internet,” the manager responds that they have sold out of their entire inventory of cashmere wool shawls. Gert is enraged. Choose the best answer.
Employer hires Employee to serve as the bodyguard to the Employer’s president. The term of the contract is one year. The annual salary is $75,000. Before the employment begins, Employee quits. Employer pays a recruiter $3,250 to find a replacement employee. The recruiter finds a replacement employee who is willing to serve as a bodyguard for an annual salary of $80,000. Choose the best answer:
Alex hires Betty to make a prototype of a new lawnmower Alex hopes to manufacture and sell. Betty agrees to have the prototype ready by June 1. One May 25, Betty calls to tell Alex that she’s almost finished but that it will likely be June 4th or 5th before the prototype is completed. Alex tells her, for the first time, that he was planning to take the prototype to the Lawn Expo in New York City on June 3, and that if the prototype is not ready by then, he will have wasted the $5,000 exhibition fee he paid. Choose the best answer:
ITDone is a software development company. They contract to develop software that will manage BigBox’s inventory. The contract provides that the software will be developed in three phases, and that BigBox’s payment will be due once the third phase is delivered and tested. ITDone completes the first two phases, but not the third. When BigBox refuses to pay ITDone, ITDone sues BigBox for breach of contract. Assume the contract is governed by common law and not the UCC Choose the best answer:
TriCo contracts with ByCo to sell 300 car engines at a cost of $2,000 each. TriCo agrees to deliver the engines in one installment on April 1. On March 20, TriCo delivers 98 engines together with a note stating that the remaining two engines would be delivered the following day. The next day TriCo delivers two engines. Is ByCo entitled to reject the car engines? Choose the best answer:
Buyer and Seller enter into a contract for the sale of goods. The agreement is memorialized in a completely integrated written agreement. A dispute between Buyer and Seller breaks out, and at trial Buyer attempts to introduce parol evidence. Which parol evidence is more likely to be admitted over Seller’s parol evidence rule objection? Assume the Uniform Commercial Code applies.
AlphaCo contracts to sell to BetaCo three custom storefront signs, complete with brackets, and to install all three signs on the front of BetaCo’s three retail locations. Is the transaction covered by the Uniform Commercial Code?
Seller contracts with Buyer to sell 450 widgets at a total cost of 9,000. Seller agrees to deliver the widgets on or before April 1. On April 1, Seller delivers 440 widgets with a note indicating that the last ten widgets necessary to complete the order are “on backorder” and will be delivered within the next 10 to 30 days. Does Buyer have to accept the delivery?
Linda runs a manufacturing company. She meets with Roy, who has worked for the company for 40 years. She verbally promises Roy that if he retires, the company will pay him a monthly retirement benefit until he dies. Roy retires. Linda argues that the alleged verbal agreement is unenforceable because the Statue of Frauds requires that it be in writing. Choose the best answer:
Boss desires to hire Laborer to spread landscaping mulch around an office building. Boss tells Laborer that he will pay him $140 when the work is completed. Assume that Boss makes it clear that performance is the only manner of acceptance that is invited. After three hours of work, Laborer has spread about half of the mulch around the office, as directed. Boss tells Laborer that he will not pay him anything and to leave the job site.
If an offeror makes an offer for a unilateral contract, when will the contract be formed?
Burn! Energy Drink Company (BEDC) markets a caffeinated energy drink to college students. It advertises specially marked six-pack containers of Burn! in retailers near college campuses, and includes packaging that states the following: “Burn! Energy Drink works! If you buy this six-pack, and drink it as instructed, you can study all night long without needing to sleep! We guarantee it! If it doesn’t work, just tell us and we’ll send you another six-back of Burn!” Bob buys the six-pack, and drinks all of it the night before his Microeconomics final exam. He falls asleep at his desk at 3:00 a.m. and doesn’t wake up until after his exam is over. Choose the answer that best describes any contract between BEDC and Bob.
Seller contracts to sell Buyer 700 widgets for $700. At the time of the contract, the fair market value for widgets is $1.50 per widget. Buyer pays Seller $700 at the time of contract. Seller fails to tender any of the widgets on Buyer looks to all of his suppliers but cannot find anyone with the widgets he needs. This is problematic, because Buyer has another contract to resell the 700 widgets to WidgetCash, Buyer’s biggest and most important customer. The only other manufacturer with widgets in stock is selling them for $3 per widget. Left with no other choice, Buyer buys 700 widgets for $3 per widget so that he will not default on his contract with WidgetCash. Choose the best answer:
Seller and Buyer agree that Seller will sell as much widget glue as Buyer requires to make widgets during the next 12 months at a price of $2 per gallon. For the first three months of the contract, Buyer requires 100 gallons of glue every month. In the fourth month, Buyer orders 1,200 gallons. Seller only provides 100 gallons to Buyer, and Buyer sues for breach of contract. What evidence is least important to Buyer’s claim?
DeltaLLC and GammaCo have been doing business together for several years. DeltaLLC provides accounting services for GammaCo’s construction business. Last winter, when DeltaLLC had some storm damage at its offices, GammaCo sent some workers over to repair the damage at no cost to DeltaLLC. The following summer, GammaCo found itself being audited by the IRS. DeltaLLC agreed to advise GammaCo during the audit at no cost, as a way of thanking GammaCo for its help the previous winter. Is the agreement between DeltaLLC and GammaCo a bargained-for exchange?
Manager interviews Candidate. At the end of the interview, Manager offers to hire Candidate on a one-year contract with a salary of $38,000, plus health insurance. Candidate asks if he can “sleep on it” and let Manager know his answer the next day. Manager agrees. That night, Manager texts Candidate the message: “Found someone else for the position, but thanks for interviewing and best of luck.” Choose the best answer:
A contracts to sell 100 flashlights to B. The contract price is $600. B wrongfully refuses the flashlights when A delivers them and B refuses to pay for them. A resells the flashlights for $500. Choose the best answer:
Manager interviews Candidate. At the end of the interview, Manager tells the Candidate that he will be in touch. Manager mails a letter agreement that offers to hire Candidate on a one-year contract with a salary of $38,000, plus health insurance. The letter indicates that the agreement must be accepted by January 5. On January 3, Candidate countersigns the letter agreement and mails it back to Manager. On January 4, Manager calls Candidate and tells him that he revokes the offer. On January 6, Manager receives the countersigned letter from Candidate. Choose the best answer.
Buyer and Seller enter into a contract for the sale of goods. The agreement is memorialized in a completely integrated written agreement. A dispute between Buyer and Seller breaks out, and at trial, Buyer attempts to introduce parol evidence. Which parol evidence is more likely to be admitted over Seller’s parol evidence rule objection? Assume the CISG applies.
Lawrence contracts to sell 10,000 widgets to Baxter for $40 per widget. The widgets are to be delivered in 30 days. At the time of contract, it costs Lawrence $30 to make each widget. The day after the contract, one of the essential components for making the widgets, widget glue, has a sharp increase in price. The price increase means that it will cost Lawrence $70 to make each widget it sells. Accordingly, instead of making $100,000 on the contract, Lawrence will lose $300,000 if he has to perform the contract. Choose the best answer:
Donnie owns a parcel of land called Greenacre. He verbally agrees to sell Greenacre to Deena for $100,000. The parcel has a fair market value of $80,000. He transfers the property to Deena, but Deena never pays for it. Assume that the contract is unenforceable because it fails to satisfy a requirement of the Statute of Frauds. What is Donnie’s best argument?
Yans put his house up for sale. He has had trouble over the years with the basement leaking. The basement only leaks when there is heavy rain, so most of the time there is no water in the basement; however, there is some staining on the walls of the basement from leaks that have occurred from time to time. Before a potential buyer, Boris, looks at the house, Yans stacks cardboard boxes up along the wall where the water stains are, so that Boris will not see any evidence that the basement leaks. Boris subsequently contracts to buy the house from Yans. Boris later learns that the basement leaks, and wants to void his contract with Yans. What is his best argument?
PaintCo contracts to paint one large warehouse on TruckCo’s distribution compound. The contract provides that the contract price will be $40,000. PaintCo paints one of the four sides of the warehouse, but refuses to complete the job. As a result, TruckCo has to hire someone else to paint the other three sides of the warehouse for $30,000. The fair market value of the work performed by PaintCo is $10,000. Choose the best answer:
PaintCo contracts to paint each of three identical warehouses on TruckCo’s distribution compound. The contract provides that the contract price will be $25,000 per warehouse. PaintCo paints the first two warehouses, but not the third. As a result, TruckCo has to hire someone else to paint the third warehouse for $25,000. Choose the best answer:
Drywall, Inc. contracts to install drywall on GC, LLC’s residential construction project. Their contract provides that “GC, LLC shall pay Drywall, Inc. in full for the work performed within 30 days of GC’s payment from the Owner of the project.” Drywall, Inc. completes the work. However, GC, LLC’s contract with Owner is terminated, and Owner never pays GC, LLC for the drywall work provided. Choose the best answer:
Snowplow, Inc. provides snowplowing services to Boxes, LLC, which owns a large retail store with a substantial customer parking lot. The contract between Snowplow and Boxes provides that Snowplow will provide “prompt snowplowing services at the Boxes, LLC parking lot, as frequently as required, at Snowplow, Inc.’s sole discretion.” Snowplow does not always have the driveway plowed as early and as frequently as Boxes, LLC would like. How frequently does Snowplow, Inc. have to provide service? Fully explain your answer, including any rule(s) that supports it.
Tammy manages a medical practice. She contracts with Medical Waste Solutions (MWS) to remove all medical waste, a task that necessitates compliance with legal requirements for disposal at the end of each business Tammy wants to ensure that the medical waste generated by the facility is removed between 5:00 and 6:00 every day, and that if for any reason it is not, that MWS will have an employee on call who will pick up the waste before Tammy leaves each day at 6:30. The salesperson for MWS tells Tammy that they have someone on call 24 hours a day, seven days a week, and that they will pick up any medical waste within an hour of receiving a call. Feeling confident that MWS will do a good job, Tammy signs a one-year contract. However, the contract between the medical practice and MWS includes a provision that only requires that MWS pick up any uncollected waste “within 48 hours of receiving written or telephonic notice from the customer.” The contract is completely integrated. Tammy wants to know whether the term in the writing or the term assured to her by the salesperson controls. Fully explain your answer, including any rule(s) that supports it.
RonKO sells boxing gloves. It contracts to sell 100 pairs of leather boxing gloves to Golden Fist Gym, LLC (GFG) at a price of $30 per pair. RonKO packs the gloves to be delivered and hires a delivery company at a cost of $225 to transport the gloves to GFG’s offices. Prior to the date of delivery, GFG cancels its order. RonKO tells the delivery company, which agrees to return the gloves to RonKO but charges an additional $225 fee for doing so. RonKO resells the gloves to another customer at the market price of $25 per pair. What are RonKO’s damages? Fully explain your answer, including any rule(s) that supports it.
Kinway Transportation (Kinway) is a private courier company, specializing in transporting manufacturing and medical equipment across the United States on an expedited basis. One of Kinway’s drivers falls asleep at the wheel and collides with a semi-truck owned by BoxCar Services (BoxCar). The collision causes substantial damages to the BoxCar truck, trailer, and the cargo contained in the trailer. Counsel for BoxCar threatens Kinway that if a settlement is not reached within 48 hours, BoxCar “is going to sue Kinway for every penny it owes, and the publicity that a lawsuit will bring will not help Kinway’s reputation for safe driving.” Kinway enters into a settlement agreement with BoxCar. Weeks later, Kinway seeks to avoid performing the contract, claiming that it entered into the contract under duress. Do you think Kinway’s argument will be successful? Fully explain your answer, including any rule or rules that support it.