3You are the Chief Operating Officer of Acorp.Over lunch, the President of Magnaco offers to sell Acorp a piece of fully depreciated manufacturing equipment you need for your production line for $1000.You know that this is less than the fair market value of the equipment.You tell the President of Magnaco that you will buy it, and you shake on it.The Magnaco President later changes his mind and decides to keep the equipment.Acorp sues Magnaco for breach of contract.

3-1Is your oral agreement an enforceable contract?Explain why or why not by analyzing and referring to the essential elements of a contract.

3-2Assuming that the contract is enforceable, what remedies can Acorp seek in a lawsuit?What is the best remedy?

3-3Magnaco defends on the grounds that the equipment is really worth $25,000, something the President of Magnaco did not realize at lunch but which you, as Chief Operating Officer of Acorp, knew, making the contract too unfair to enforce.Is this a viable defense?Why or why not?Be sure to use the analytical tools described in the lesson.

3-4Assume the same facts regarding the initial meeting, but the Magnaco owner goes back to Magnaco and finds that the equipment has been sold to someone else.Acorp sues Magnaco for breach of contract.What defenses could Magnaco raise?Would Acorp win the lawsuit?

3-5Assume the same facts but the Magnaco President consumed four martinis at lunch.Magnaco defends on the grounds that the Magnaco President was intoxicated and incapable of understanding what he was doing.Is this a viable defense?Why or why not?