Part 2-B: Short Answer Questions 1-6

1. List and briefly describe the seven key characteristics that must be present

for a contract to be enforceable.

2. True/False Fantasy. Please state if each of the 5 statements below is true or

false,

explaining your reasoning with each answer

.

a. Walter Lee and Willie are planning to form a partnership to open a liquor

store in Chicago. They agree to all terms of their partnership,

including that they will share all profits 50/50 and that they both will

dedicate their full efforts to the success of the store. They do not

write awritten contract, though. If Walter Lee gives Willie Walter

Lee's share of the initial investment, and Willie then disappears with

the money without upholding his obligations pursuant to the contract, the

contract between Walter Lee and Willie will not be enforceable because it

is not in writing.

b. Mr. Linder sells Mrs. Younger a house in Clybourne Park, Illinois, a

suburb of Chicago. The house is considered a "good" and the contract

will be governed by Article 2 of the UCC.

c. Travis, Walter Lee's 12-year-old son, is not excited about moving from

Chicago to Clybourne Park, until he realizes that he finally will be able

to own and ride a bicycle. He takes some money that his grandmother had

given him and puts a down-payment on an expensive bicycle. In the

installment sales contract, Travis agrees to make monthly payments until

the purchase price plus interest is paid in full. The installment sales

contract also has a provision in it, directly over the signature blocks

and printed in boldface type, that notifies the purchaser that all sales

are final. When Ruth, Travis's mother, learns about the bicycle, she

tells Travis that he needs to return the bicycle to the store and get his

money back. The store owner is required to void the contract and return

Travis's money when Travis returns the bicycle.

d. Mr. Arnold hires Walter Lee as his chauffeur, and they agree to a one-

year contract. Mr. Arnold is impressed with Walter Lee's driving skills

and punctuality. Walter Lee, however, grows dissatisfied and quits his

job without notice only three months into the contract. Mr. Arnold can

sue Walter Lee for breach of contract and get an injunction to force

Walter Lee to complete his contractual obligations.

e. George and Joseph are drinking shots of whiskey one night, arguing over

who would be a better husband for Beneatha, with whom they both are in

love. George ends up having far too many shots than he can handle.

Joseph realizes that George is so intoxicated he does not know what he is

doing, so he convinces George to sell him for $50 an expensive diamond

ring that George was planning to give to Beneatha. When George gets

sober, he can attempt to void the contract with Joseph.

3. When last we encountered Daniel, a resident of Boca Raton, Florida and an

aspiring film maker, in Part 2-B of the Second Semester Exam, he had been

driving his car to New York City when he had an accident in South Carolina.

After getting a loaner car through his insurance company and arriving in New

York City, Daniel had a series of meetings with individuals interested in

financing independent film projects such as those that Daniel planned to

undertake. After one such meeting with Evandro, a wealthy real estate investor

who lived in Manhattan (New York, New York) and who wanted to branch out into

investments in the arts, Daniel and Evandro reached agreement on the terms of

an investment by Evandro in Daniel's current film project. The two of them

agreed at a lunch in Manhattan that Daniel would start production of the film

within 9 months of their agreement, that Evandro would provide $150,000 in

initial financing for the project when Daniel started production of the film

and that Evandro would be entitled to 25% of any profits generated from the

film. Daniel would take all other economic risk with respect to the film

project and would have artistic control over the film's content. The two

shook hands before leaving the restaurant. Later that day, Daniel sent Evandro

an e-mail message detailing the agreement's terms. Evandro replied to the e-

mail message, confirmed his agreement with the summary of terms in Daniel's

message and concluded his reply message as follows: "Thanks for the lunch.

Evandro." Based on Evandro's agreement to provide the initial financing for

the film project, Daniel purchased some specialized camera and microphone

equipment for $30,000 and hired actors, agreeing to pay a total of $75,000 in

compensation to the actors. Daniel was ready to start production of the film 6

months after the meeting with Evandro, and he sent another e-mail message to

Evandro to notify him that the film production was set to begin and to arrange

for Evandro's payment of the $150,000 investment. Evandro replied to this e-

mail message rom Daniel, but he told Daniel that he did not believe that they

had an agreement with respect to the investment. He told Daniel that he would

not make any investment in any film project at this time. Daniel has come to

you for advice concerning his rights against Evandro.

a. Is there a valid contract between Daniel and Evandro with respect to the

investment in Daniel's film project? Why or why not?

b. Where would Daniel be able to file his lawsuit against Evandro? What are

the bases for jurisdiction in each possible court in each possible state

c. If a court were to find that there is no contract between Daniel and

Evandro, is there any other possible basis for Daniel to recover against

Evandro? What would be the basis of that recovery? (Think about our

study of enforcement of non-contracts.)

4. Christian, a fine-art dealer, offers by e-mail to sell a rare piece of Filipino

traditional artwork to Alon, another fine-arts dealer, for $150,000, specifying

in the offer that insurance and shipping are to be paid for by Alon, as the

buyer. Alon responds by return e-mail the next day, stating in pertinent part,

"I accept. Insurance and shipping costs divided equally between seller and

buyer. Payment to be made upon delivery." Christian does not respond to

Alon's e-mail message.

a. Do the parties have a contract? Why or why not?

b. If the parties have a contract, what is the payment term for the contract

(when is payment to be made)?

c. If the parties have a contract, what term applies with respect to

insurance and shipping costs?

d. Christian and Alon have a certain status pursuant to the UCC. What is

that status and why is it important?

5. Let us go back to our aspiring filmmaker friend Daniel. Daniel's production

company is Pan-American Films, Inc., which currently produces Spanish-language

motion pictures for release in the North American market. Because Daniel has

plans to expand Pan-American's business (see question 1 of this Part 2-B),

Pan-American needs to buy custom camera equipment for some of the filming

involved in its latest motion picture project. Pan-American publishes a

request for bids in several trade papers in the motion picture industry,

including a list of its custom specifications and requirements for the camera

equipment and soliciting bids from parties capable of providing the camera

equipment. Interested parties are to submit bids to Daniel's attention. Six

interested parties submit conforming bids to Daniel's attention by the bid

deadline.

a. Did the solicitation of bids constitute an offer? Why or why not? If

the solicitation of bids did not constitute an offer, when was an offer

made pursuant to these facts, and who made the offer?

b. Now, assume that Jude's Custom Camera Works, Inc. submitted the lowest-

priced conforming bid for supplying the custom camera equipment (a bid of

$12,500 per camera, with varying prices for ancillary equipment). Was

there offer and acceptance when Jude's Custom Camera Works submitted the

lowest bid? If not, what action must take place for there to be offer

and acceptance between Pan-American and Jude's Custom Camera Works?