1. Anna is having a dinner party and wants everything to be perfect. She asks her good friend, Beth, to come over early to help prepare all of the food so that she doesn’t have to pay a caterer. Anna tells Beth that if she helps out, Anna will write Beth’s term paper for her. The two agree and sign a deal. Is this contract enforceable? (Select 1)

( ) Yes, because there was an intent to create legal relations.

( ) Yes, because both sides were serious.

( ) No, because this was not legal and not moral.

( ) No, because this was a gift, not a bargain.

Question 2

2. Amy asks Brian if he’ll drive her to the airport and pick her up from her return flight if she pays him $20. Brian says he’ll do it if she pays him $40 now. Amy gives him the $40.

Who is the Offeror? (Select 1)

( ) Amy

( ) Brian

Who is the Offeree?

( ) Amy

( ) Brian

What sort of exchange is this?

( ) Promise for Promise

( ) Promise for Performance

( ) Performance for Performance

( ) None of the above

Question 3

3. A woman sends the following email to a local repairman: “I will pay you $600 to come and repair four storm gutters on my garage this Saturday morning, the 23rd. It should take you about 3 to 4 hours to finish the job.” The repairman replies: “Sounds good, but my going rate for this kind of work is $750.” When the repairman arrives at her house on Saturday, the woman is nowhere to be seen. He has turned down other work to be there. He doesn’t do the job because the woman is not there to pay him.

Can the repairman enforce this contract?

( ) No; he was not entitled to request more money from the woman because she, the offeror, was the master of the bargain.

( ) No, because the woman never accepted the repairman’s increased price.

( ) Yes, because the terms of the woman’s email were specific enough.

( ) Yes, because he gave up other work in order to be at the woman’s house at the time she requested.

4. A consultant has been working for the manager of an investment fund for ten years. At the beginning of their working relationship, the consultant sent the investment manager a contract for the first year of work, detailing how much compensation he expected and other terms, which the manager never signed or returned. However, shortly after receiving the contract, the manager sent the consultant some work, and the consultant completed it. The consultant continued to complete a few projects a year for the manager, though he never sent him another contract. The consultant kept track of his time and sent the manager a bill once a year at the end of the year, which the manager always promptly paid. This year, however, the manager is refusing to pay the bill on the grounds that he did not have a contract to pay the consultant for his services.

If the consultant sues the investment manager for the amount of the unpaid bill, will he be successful? (Select 1)

( ) No, because the manager never signed and returned the contract.

( ) No, because after the year of work provided for in the first contract expired, there was no bargaining as to the terms of the continuing relationship.

( ) Yes, because this was an implied contract governed by the pattern of performance and payment that had been going on for several years.

( ) Yes, because the manager has a moral obligation to pay the consultant for services that he has already rendered, and the law will stand behind this obligation.

5. In which of the situations below does contract law provide a remedy? (Select 2 Answers)

( ) Trading stocks based on insider information

( ) False statements made during contract negotiations

( ) One company loses sales of its product due to competition from another company’s product, which is misleadingly advertised

( ) A store sells a customer a cell phone, which both the store and the customer honestly believe is brand new; in fact, the phone has been used previously for four months by an employee of the phone manufacturer

( ) One party’s failure to turn over all relevant information in its possession to the other side during a contract negotiation

6. Judy owns an apartment building, and Juan expresses interest in renting from her. Over the phone on Tuesday, the two agree in principle to a lease and all of its material terms. Juan tells Judy that he will stop by her office on Thursday morning to sign the lease, so that he can move in to the apartment that afternoon. Given the short timeline, Judy scrambles on Wednesday to prepare the apartment for Juan’s coming arrival. She hires a cleaning crew on short notice, and also has a painter clean and repaint the walls.On Thursday morning, though, Juan does not come to Judy’s office and instead calls to say that he is no longer interested in the apartment. Judy—out several hundred dollars from cleaning the place—is upset and wants to collect those costs from Juan. Can she?

( ) Yes. This is a case for reliance damages; Judy had the apartment cleaned in reasonable reliance on Juan’s promise to lease it.

( ) Yes, because the terms of the lease govern, and it almost certainly covered the apartment cleaning.

( ) No, because there was no contract between Juan and Judy.

( ) No, because Judy’s cleaning of the apartment was not a reasonable expenditure.

7. Synergy Inc. makes televisions, which it sells to consumers through a network of independent distributors. Matthew owns one such distributorship in Storyville, Ames. The relationship between Synergy and Matthew is governed by an elaborate contractual agreement, which among other terms provides price schedules for Matthew’s wholesale purchases, sales incentives for dealing lots of Synergy televisions, and a term that allows either party to cancel the agreement without cause by giving ten days’ notice to the other party.

For thirty years, Matthew sells Synergy’s televisions with great success, generating large profits for Synergy and providing a nice lifestyle for Matthew and his family in Storyville. One day, though, the son of Synergy’s CEO decides that he wants to sell Synergy televisions through his new distributorship in Clarksville, Ames (a mere 5 miles from Storyville). Attempting to drive Matthew out of business, Synergy notifies him that it is cancelling the thirty-year old agreement, effective twenty days later. Matthew is heartbroken, seeing his entire livelihood crumble before him.

Eventually, he calms his emotions and speaks to Vince, Matthew’s high school friend and longtime lawyer. Vince, knowing that Matthew’s life has been built on the basis of selling Synergy televisions, tells Matthew that he can use contract law to prevent Synergy from pulling the deal out from under him. Is Vince correct? (Select 1)

( ) Yes, because there is a long-established course of dealing (over 30 years) between the parties.

( ) Yes, because the contract term allowing cancellation of the agreement is unconscionable.

( ) No, because any argument that Vince might make about acting in good faith or the course of dealing between the parties is defeated by the contract term on cancellation.

( ) No, because changed circumstances frustrated the contract’s objective.

8. Ralph and Henry have a valid contract for Ralph to build Henry’s new house. When negotiating the deal, Ralph estimated that his costs for the project would be $150,000, which would easily be covered by the contract price of $200,000. When Ralph was only partially finished with the job, Henry became angry with him and fired Ralph, making him leave the job site. To that point, Ralph had expended $75,000 in construction and labor costs.

Ralph is upset about being fired and needs the money the job would have brought him. Based on the doctrines you have learned in this course, what is his best option? (Select 1)

( ) He should seek specific performance of the contract, getting a court to force Henry to allow Ralph to complete the job.

( ) He should sue Henry for damages, which would total up to $125,000.

( ) Contract law provides no solutions for Ralph—he should seek other construction jobs instead to cover his lost costs.

( ) He should sue Henry for damages, which would total up to $75,000.

9. Kitty goes to her lawyer, Ross, to have him prepare her will, in which she wants to leave all of her property to her older daughter, Meghan, and none to her younger daughter, Olivia. At their first meeting in Ross’s office, Ross and Kitty sign a representation agreement (a contract), under which Ross must work on Kitty’s business in accord with the normal standards of attorney practice.

Kitty dies fifteen years later. As it turns out, though, Ross did a terrible, terrible job drafting the will (far worse than a lawyer normally would, easily breaching his earlier agreement with Kitty), and the will is thrown out by a court. Because of that, Kitty’s property is distributed according to the state’s default rules, which give half to Meghan and half to Olivia.

( ) Meghan, having received only half of the property she would have if the will were valid, is furious. She wants to sue Ross for the difference. Can she? (Select 1)

( ) No, because too much time has passed and she is barred from suing.

( ) Yes, because lawyers must account for their poor conduct, and Meghan is the best-situated person to bring that suit.

( ) Yes, because Meghan was an intended third-party beneficiary of the Kitty-Ross agreement.

( ) No, because Kitty was the only person who could sue Ross, and she is dead.

10. Ken is one of the largest beef wholesalers in all of East Dakota; Jesse operates one of the most famous and fantastic steakhouses in the state. One day, Ken finds himself with an inventory of especially bad beef; he tried selling it to dog food manufacturers, but even they wouldn’t take it! Needing some cash to make payroll that week and really needing the bad meat gone from his warehouse, Ken mixes some of the poor quality meat in with Jesse’s order of select-grade filet mignons. Not noticing the bad meat in the container (likely because Ken has done his best to hide it), Jesse accepts the delivery and pays Ken for it. He does not notice the bad meat until two days later. Obviously, he is furious and wants his money back from Ken.

If Ken refuses, does Jesse have any remedy under contract law?

( ) Yes, because this is a case of mutual mistake, and the contract can be set aside.

( ) No, because when Jesse took delivery, he assumed any risk of poor-quality meat at that point.

( ) Yes. Jesse can get this contract invalidated, either because Ken failed to perform or because Ken acted fraudulently.

( ) No, because in waiting two days to notify Ken of the problem, Jesse has waived his right to object by allowing too much time to pass.