1. Blaine and Michael want everything perfect for their wedding. They have rented a ballroom in a fancy hotel, picked their flowers, and hired a band that plays great salsa music. They went around their area to hear bands and loved the group Hot Spice for their reception. They signed a contract for $4,500 with Hot Spice. On the day of the wedding, a band called Hot Spice II showed up. Blaine was in tears. This was not the band she hired. They were going to ruin her perfect day. The Hot Spice II lead singer, Geraldo Diaz, stated that they worked with Hot Spice. Geraldo asked Blaine whether she had read the contract. One of the provisions stated that "either Hot Spice or Hot Spice II would perform at the wedding reception." The clause continued that "both bands will play primarily salsa and Latin music and also are available to play other standard wedding music." Blaine could not believe it. Michael consoled Blaine by telling her not to worry and that he was sure the band would be fine. Anyway, they needed music. Although Hot Spice II rocked the reception, Blaine felt like she had been played. She wants to sue the band for breach of contract. Does Blaine have a case? What are the parties' options in this matter?

2. Jack Wallston wanted to make an offer to purchase a house from Lionel Ingram. The purchase price for the house was $355,000. In the contract for the purchase of the house was a clause that stated, "Buyer shall pay a nonrefundable $15,000 earnest money deposit. In the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to seek actual damages or specific performance." Additionally, the contract contained another clause that stated, "Buyer represents that Buyer has sufficient funds to close this sale in accordance with the agreement and is not relying on any contingent source of funds unless otherwise set forth in this agreement." Wallston went to the bank to secure financing. The bank offered to finance, but also added that Wallston had to secure $100,000 of his own money for closing. Not happy, Wallston sought financing elsewhere. The contract initially had a closing of September 15, but Wallston requested that it be extended to October 1. Ingram refused. He also realized that Wallston did not have adequate money to secure financing. He placed the house back on the market. Ingram received an offer on September 25. Wallston was still having problems with his financing. He contacted Ingram to let him know that he was still trying to get financing for the house. He needed additional time. Ingram notified Wallston that he had found another buyer and that he was going to institute an action for the earnest money deposit. Because Wallston did not secure financing, Ingram believed he was entitled to the earnest money deposit. Your attorney asks you to answer the following questions:

a. Were the liquidated damages enforceable? Why or why not?

b. Are there any viable defenses that Wallston could raise against Ingram? Why or why not?

(the answer should explain the requirements for valid liquidated damages clauses and should discuss whether there are any viable defenses or not and why.)

3. Flowers Factory Outlet entered into a lease with ARD Developers for space located in the warehouse district of the city. The lease was for 10 years. In the lease, the following clause was present: "Flowers Factory Outlet may assign the lease to a subsidiary and at the time of the assignment, the tenant herein named shall have no further responsibility under the terms of the lease." With ARD's knowledge, Flowers assigned the lease to Discount Flowers in year five of the lease. In year six a dispute arose between Discount and ARD causing Discount to stop paying its rent on the lease. Now, ARD wants to sue both Flowers and Discount. Your firm represents Flowers Factory Outlet. Draft a memorandum discussing the legal issues that Flowers can raise in its defense. (Be thorough in your analysis, which includes discussing both sides of the argument.)