PART 1. Contract Formation, Breach and Defenses; Chapters 10 and

11.

FACTS.

The MGM Hotel & Casino in Las Vegas enters into a contract with Celine Dion to

perform five nights each week for two years. The contract pays Celine $200,000 for each

performance. During the Christmas holidays, Celine becomes bored and dec

ides to fly to the

Bahamas for New Year's Eve. She calls her friend Madonna and asks if Madonna is willing to

perform on New Year's Eve if Celine agrees to transfer to her the $200,000 which Celine would be

paid under the contract. Madonna is excited abo

ut spending New Year's Eve in Las Vegas and

happily agrees to perform.

QUESTION 1:

What is the legal term for the act of Celine's transfer to Madonna of the right to

receive the contract payment of $200,000? (2 points)

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QUESTION 2:

What is the legal

term for the act of Celine's transfer to Madonna of the obligation to

perform at the MGM Hotel & Casino on New Year's Eve? (2 points)

QUESTION 3:

Can Celine do this without the consent of the MGM Hotel & Casino? Explain your

answer. (5 points)

QUES

TION 4:

Does the MGM Hotel & Casino have a claim against Celine Dion if Madonna secretly

shows up and puts on a smashing show which leaves the MGM customers so deliriously excited and

happy that they spend and gamble away twice as much money as when Celin

e Dion performs?

Explain your answer. (5 points)

FACTS.

On March 1, 201

7

,

Lady Gaga

signed a contract with the Bellagio Hotel & Casino in Las

Vegas to perform on New Year's Eve 201

7

. The contract provides for a total payment of $3,000,000

w

ith an advance payment of $1,000,000. The Bellagio paid

Lady Gaga

the $1,000,000 advance

payment on March 15, 201

7

and he immediately deposited it into

her

bank account.

QUESTION 5:

Donald Trump wants

Lady Gaga

to perform for his daughter's

private pa

rty at Mar A

Largo

on New Year's Eve 201

7

, and offers

Lady Gaga

$5,000,000 to perform.

Lady Gaga

accepts

this offer.

She

then tells the Bellagio that

s

he won't be performing on New Year's Eve.

Can

Lady Gaga

keep the $1,000,000 advance payment? Explain

your answer. (5 points) Your

answer should address two situations. First, Donald Trump does not know that

Lady Gaga

is booked

New Years Eve at the Bellagio. Second, Donald Trump knows tha

t Lady Gaga

is booked and uses all

means at his disposal, including

the promise of a diplomatic ambassadorship if

Lady Gaga agrees to

perform

.

QUESTION 6:

Same facts. Does the Bellagio have a legal claim against

Lady Gaga

if

s

he does not

appear and perform on New Year's Eve 201

7

? Explain your answer by describing the b

asis of the

claim and the Bellagio's remedies. (5 points)

QUESTION 7:

Same facts. Will the Bellagio be successful if it sues

Lady Gaga

for specific

performance or a mandatory injunction to compel

Lady Gaga

to appear and perform on New Year's

Eve 201

7

? W

ill the Bellagio be successful if it sues Donald Trump for convincing

Lady Gaga

to sing

for his daughter? Explain your answer. (5 points)

QUESTION 8:

Same facts. Can the Bellagio recover damages for lost ticket sales and guest

cancellations if

Lady G

aga

does not appear and perform on New Year's Eve 201

7

? Explain your

answer. What is the term used to define these types of damages? (5 points)

QUESTION 9:

If in September 201

7

, three months before the concert on New Year's Eve,

Lady

Gaga

tells the Be

llagio that he will not show up to perform, what duties or obligations does the

Bellagio have in light of

Lady Gaga

's refusal to perform

her

contract? Explain your answer. (5 points)

DIFFERENT FACTS

.

Lady Gaga

fully intends to appear and perform at the

Bellagio on New Year's

Eve 201

7

. On December 30, 201

7

while driving from Los Angeles to Las Vegas,

Lady Gaga

stops at

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the In Out Burger on Interstate Highway 15 near the border community of Primm, Nevada. After

eating h

er

burger,

Lady Gaga

becomes deathl

y ill with food poisoning. On

her

arrival in Las Vegas

he is hospitalized and is physically unable to appear and perform on New Year's Eve 201

7

.

QUESTION 10:

Lady Gaga

claims that he is excused from having to perform on New Year's Eve. Is

this true?

What is the term used to describe this type of excuse of a contractual obligation? Explain

your answer. Can

Lady Gaga

retain the $1,000,000 advance payment? (5 points)

QUESTION 11:

Can the Bellagio recover damages from

Lady Gaga

for lost ticket sale

s and guest

cancellations even though he became ill? Explain your answer. (5 points)

FACTS:

The Bellagio sends a letter to

Lady Gaga

demanding that he repay the $1,000,000 advance

payment.

Lady Gaga

instructs his lawyer to write a letter t

o the Bellagio which states:

Lady Gaga

does not agree with your demand that

s

he repay the

$1,000,000 advance cash payment, but to demonstrate M

s. Gaga's

good

faith,

s

he has agreed to return one

-

half of the advance cash payment in

the amount of $500,000.

Enclosed is M

s. Gaga's

check for $500,000

which will be settlement in full of all claims of the Bellagio against

Ms.

Gaga

.

The Bellagio then deposits the check for $500,000.

QUESTION 12:

Does the Bellagio's deposit of the check end the dispute and r

esolve the Bellagio's

claims in full? Explain your answer. What is the term used to describe the parties' substitution of a

different performance to complete a contract? (10 points)

QUESTION 13:

Does it make any difference if

before

the Bellagio deposi

ts

Lady Gaga

's check for

$500,000, the lawyer for the Bellagio sends a letter to

Lady Gaga

and

her

lawyer which states, in

part:

Thank you for your check in the amount of $500,000. The Bellagio will

credit the $500,000 as partial payment against the adv

ance cash payment

which you are obligated to repay to the Bellagio under our contract.

Thank you very much for this partial payment.

Explain your answer (10 points).

________________________________________________________________

PART 2. Agency; Chap

ter 12.

FACTS.

Chris is a software programmer who has been employed in Reno for ten years by a

software company. For the past five years Chris has been working almost seven days each week on

a new software. He has been so focused on his work that he ha

s neglected his personal affairs,

including maintenance of the house he bought in 1996 for $90,000. Although Chris' home is

structurally sound, cosmetically it is a mess with cracked and faded paint, overgrown landscaping and

weed

-

filled lawn and garden a

reas. His garage and backyard are filled with stacks of old computers

and related equipment.

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Chris' software project is complete and his stock options have paid off. He is anxious to move

back to Seattle, Washington where he intends to revive his high

school rock and roll band. He

decides to sell his house in Reno so he goes on

-

line to find a real estate agent. He finds the name

and telephone number of Aaron Snarkel who is a real estate agent licensed in the State of Nevada.

Chris calls Aaron who ag

rees to meet with Chris that evening. Aaron comes to the house

where the two of them inspect the home and the yard. Aaron recognizes that the house is extremely

well

-

constructed, but that it needs a few days of cleaning, some repairs and a fresh coat of

paint.

Aaron is convinced that in a matter of weeks the house could be sold for as much as $400,000.

Aaron presents Chris with a listing agreement which provides that if Aaron finds a willing and

able buyer at any time during the next six months, Chris

will pay a sales commission equal to 6% of

the selling price. The suggested sale price is $400,000. Chris tells Aaron that the agreement looks

"fine," but that he, Chris, would like to read it that evening and sign and deliver it the next day.

Aaron t

ells Chris that he may have a buyer among the persons who have contacted him about

finding a home in Reno. Chris tells Aaron, "Great. Go ahead and try to sell the house as soon as you

can."

Aaron immediately puts the home on his real estate website and

places an ad on Craigslist

and in the real estate pullout section of the local newspaper. He also sends email messages about

the home to potential customers who have contacted him during the previous month or two.

In response to one of his emails, Aaro

n receives a call from Paul, an officer of a company

which is a prospective purchaser. Paul wants to view the house as soon as possible. Aaron

suggests that they meet at the house for a street view. While standing on the sidewalk in front of the

house,

Aaron and the purchaser encounter Chris. Aaron introduces the two and explains to Chris

that Paul may be interested in purchasing the house. Chris states approvingly, "Go ahead and look

around, Aaron knows what he's doing."

QUESTION 14 (2 points):

As b

etween Chris and Aaron, who is the principal?

QUESTION 15 (2 points):

As between Chris and Aaron, who is the agent?

QUESTION 16 (5 points):

What scope or type of authority does Aaron have based on the listing

agreement, assuming that Chris signs it?

QUESTION 17 (5 points):

What scope or type of authority does Aaron have based upon the

conversation among Aaron, Chris and Paul, the prospective purchaser?

QUESTION 18 (5 points):

What scope or type of authority would authorize a real estate agent

like

Aaron to place the home on the realtor's website?

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QUESTION 19 (5 points):

What scope or type of authority would authorize a real estate agent like

Aaron to place an ad on Craigslist or in the local newspaper?

QUESTION 20 (10 points):

Name

five

duties which Aaron has to Chris arising from the relationship

created by the listing agreement assuming it is signed?

QUESTION 21 (10 points):

Name

four

duties which Chris has to Aaron arising from the relationship

created by the listing agreement assu

ming it is signed.

QUESTION 22 (10 points):

If Paul, the

prospective purchaser, is an officer of an investment

company of which Aaron is part owner, what obligations, if any, does Aaron have to Chris if Paul

makes an offer to buy the house? Explain you

r answer.

QUESTION 23 (10 points):

Chris' neighbor Ned notices the "For Sale" sign in Chris' front yard. He

sees Aaron standing on the sidewalk and begins a conversation. Because Ned the neighbor knows

that Chris has been completely out of touch with

the real estate market for five years, the neighbor

makes an offer to Aaron to buy the house for $320,000. Aaron believes this offer is ridiculously low

and considers not telling Chris about it. What are Aaron's legal

and

ethical duties under these

circu

mstances? Explain your answer.

QUESTION 24 (10 points):

Same facts as the preceding question, except that Ned the neighbor

makes an offer for $380,000 with a 90 day delay for closing of the sale. At the same time, Judith,

another prospective purchaser,

makes an offer for $360,000 with a 30 day delay before the closing of

the sale. Aaron is a bit short of cash and is really anxious to earn his sales commission as soon as

possible. Aaron does not want to present the higher offer with the 90

-

day delay to

Chris. What are

Aaron's legal

and

ethical duties to Chris under these circumstances? Explain your answer.

QUESTION 25 (20 points):

While inspecting the house with Chris, Chris informs Aaron that his

basement was once flooded and became moldy. Chris

believes that the problem has been repaired,

but requests that Aaron inform all prospective purchasers of the condition. Aaron does not inform

Ned the neighbor or Judith, the prospective purchaser, about the condition. Ultimately, Aaron and

Judith that J

udith will buy the house for $400,000 which is $20,000 more than the fair market value of

the house ($380,000) due to historic flooding and mold conditions.

What claims does Judith have against Chris and what are Chris' defenses, if any? Explain your

ans

wer.

What claims does Judith have against Aaron and what are Aaron's defenses, if any? Explain your

answer.

What are Judith's remedies in this circumstance? Would your answer change if the fair market value

of the house is only $200,000 as a result of t

he flooding and mold? Explain your answer.

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6

Identify

three

sources of guidelines and operating principles for Aaron's ethical and legal duties as a

real estate agent. Explain your answer.

Part 3 Special Contract Rules

QUESTION 26 (5 PO

INTS)

As part of the deal between Celine Dion and the MGM Grand Hotel &

Casino described in Part 1, Celine agrees to grant a license to MGM Grand Hotel & Casino to use her

photographic image and film of her performances in promotional materials for five (

5) years after her

performance contract expires. Is the license required to be in writing and signed by either party?

Explain your answer.

QUESTION 27 (5 POINTS)

Is the agreement between

Lady Gaga

and the Bellagio Hotel & Casino

described in Part 1 req

uired to be in writing and signed by either party? Would your answer change if

he agreed to perform on New Year's Eve for the next five (5) years? Explain your answer.

QUESTION 28 (5 POINTS)

Is the purchase agreement Chris and Judith described in Part 1

required

to be in writing and signed by either party? Explain your answer.

QUESTION 29 (5 POINTS)

The company for which Chris works is a corporation which is

incorporated in the State of Washington. It enters into agreements to provide maintenance and

updates of its software products. If the software agreement is for six (6) months, must it be written

and signed by the parties? If the software agreement is for six (6) years, must it be written and

signed by the parties? Explain your answer