PROBLEM SOLVING AND ANALYSIS 1. In Chapter 2, we studied Hamer v. Sidwaya case where an uncle offered his nephew $5,000 in return for not drinking, swearing, gambling, and so on, until the nephew was 21. The issue considered in that case was whether the uncle's promise was gratuitous and could be revoked. This problem uses similar facts.

Assume these facts: An uncle made the following offer to his nephew when the nephew was 16 years old: "If you refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until you become 21 years of age, then I will pay you $5,000." Also, assume that the nephew formed a bilateral contract by promising his uncle to refrain from those acts until he was 21 years old.

In the actual case, the nephew fully performed; however, for this hypothetical, assume that the nephew complied with the terms of the offer except for the following. The nephew took one small sip of whisky on his eighteenth birthday. The nephew is now 21 years old and asks his uncle for the $5,000. The uncle refuses to pay the $5,000 because of the sip of whiskey.

The nephew sues for breach of contract, arguing he substantially performed the contract. The uncle argues that he has no duty to pay the $5,000 on the theory that each of the criteria in the offer (including abstaining from drinking) was a condition that had to occur in order for the uncle's duty to arise.

You are a judge hearing the case without a jury. How would you decide the dispute, and what is your rationale?

2. Buyer and Seller enter into a contract for the sale of a grocery store business. The grocery store is in a very good location; however, the building is not owned by Seller. Seller has a 15-year lease on the building with Landlord. The lease between Seller and Landlord provides that the lease cannot be assigned without the consent of the landlord. One provision of the grocery store sale contract between Buyer and Seller states, "This contract is contingent on the Seller procuring a valid assignment of the lease from the landlord." Seller never asks the landlord for an assignment of the lease. Buyer refuses to go through the purchase. Seller sues Buyer for breach of contract. If you were Buyer's attorney, how would you draft an argument that Buyer had no duty to purchase the grocery store?

3. Tenant has a one-year lease with Landlord that states, "At the option of the Tenant, Landlord shall renew the lease for a second year provided that Tenant gives notice of renewal to Landlord by, on, or about July 1." Another provision in the lease provides that any "notice" sent between the partiesincluding the option renewal noticemust be in writing. On July 2, Tenant provides written notice to the Landlord to renew the lease for a second year. Landlord rejects the notice, and refuses to renew the lease. Has Landlord breached the lease agreement? Explain your answer.

4. Farmer and Water Company enter into a contract whereby Water Company will supply a certain quantity of water to irrigate Farmer's fields for each growing season. The growing season runs from April 1 to October 1. One provision states, "Farmer must pay the annual irrigation charges by February 1 for that year's growing season." Another provision states, "Water Company will withhold delivery of water if Farmer has not paid by the start of the growing season."

Starting in January, an unprecedented amount of rain fell in this region. On February 1, Farmer did not pay the irrigation fees for that year. In early March, the rains became so heavy that the dam that held Water Company's water supply broke. On April 1, Water Company informed all of its customersincluding Farmerthat it would not provide water during this growing season because it needed to repair the dam. On April 15, Farmer paid the annual irrigation fee for that year. Water Company returned the irrigation fee to Farmer.

As a result of having no water during the growing season, Farmer's yield of corn and soybean crops was significantly lower than in years when Water Company provided irrigation. Farmer brought a breach of contract claim. Will Farmer succeed in his claim? Explain your reasoning.

5. Danny was employed by Big Acre Farms, operated by Rusty, its president and principal owner, in the summers and other times for seven years. The business of Big Acre was the production of eggs; it was stocked with 4 million hens and staffed with 300 employees. It produced approximately 256,000 dozen eggs per day.

Rusty had instituted extensive bonus programs, some of which were for one day only, or one event or activity only. While the terms of the bonuses varied, one term existed in all bonus programs: During the period of the bonus, the employee must not be tardy for even a minute, and must not miss work any day for any cause whatever, even for illness. If the employee missed any days during the week, he could sometimes make them up on Saturday and/or Sunday. Any missed work not made up within the same week worked a forfeiture of the bonus. These rules were explained to the employees and were stated in a written policy.

The bonus programs were voluntary, and not all employees participate in them. Rusty was strict about tardiness and absenteeism, whether an employee was on a bonus program or not. If an employee was tardy, his pay would be docked to the minimum wage, or he would be sent home and lose an entire day. The purpose of the bonus programs and penalties was to discourage absenteeism and tardiness and to promote motivation and dependability.

In June, Rusty called in Danny and other construction crew leaders and offered a bonus of $6,000 each if certain detailed construction work was completed in 12 weeks. In the tenth week, Danny came down with strep throat. On Thursday of that week, he reported to work with a temperature of 104 degrees and told Rusty that he was unable to work. Rusty told him that if he went home, he would forfeit the bonus. Rusty offered him the opportunity to stay there and lie on a couch or make up his lost days on Saturday and/or Sunday. Rusty told him he could sleep and still qualify for the bonus. On Thursday, Danny stayed at the farm and slept on sofa. Danny did not show up for work on Friday or Saturday, but did arrive on Sunday and worked a full day.

Rusty paid the bonus to every other construction leader, but he refused Danny the bonus stating that he changed his mind and did not think Danny deserved the bonus.

Danny brings a breach of contract claim. You are a clerk for a judge who has asked you to research the law and draft a short analysis of what the outcome should be based on these facts.

6. Turner entered into a contract to purchase 20 training sessions from 24 Hour Fitness, which is a chain of gyms. According to the agreement, Turner had to use the training sessions within six months of purchase. Turner knew of these terms when she entered the agreement. During the six-month period, 24 Hour Fitness had trainers available, but Turner did not use all of her sessions. At the end of the six-month period, Turner attempted to schedule her unused sessions; however, 24 Hour Fitness refused to do so. Turner brought a breach of contract lawsuit, seeking damages based on a theory of forfeiture. Put yourself in the role of the attorney for 24 Hour Fitness. How would you use the law of conditions to argue that the company had no duty to provide trainers after six months? Does the forfeiture exception apply here?

7. Westinghouse, a broadcasting company, contracted with the New England Patriots to air their football games on TV. Between 1976 and 1978, Westinghouse had consistently made late payments of the royalties due under the agreement. The Patriots threatened litigation; however, after some negotiation, the parties amended their agreement to set up monthly installment payments. Part of the amended agreement provided Westinghouse with an option to renew the contract in 1980. The amendment required that Westinghouse "must" make timely payments in 1979; otherwise, the option was void. One of the checks from Westinghouse in 1979 was made three days after the deadline and received by the Patriots nine days late. After the late payment, the Patriots notified Westinghouse it had lost its 1980 option.

Westinghouse sought specific performance of the option. Westinghouse argued that failing to make the payment on time was a trifling matter and that they stood to lose a substantial and important contract that was key to their success in the New England market.

Answer each of the following questions: A. Using all of the relevant facts and the law, analyze whether the contract contained a condition. Assuming there is a condition, identify whether it is a condition precedent or condition subsequent? Which of the excuses to a condition best fits Westinghouse's argument? Explain your reasoning.

B. For this question, assume there was not a condition. Analyze the degree to which Westinghouse breached the agreement based on these facts i.e., partial, material, or total breach. Explain your reasoning.

C. For this question, consider the two principal cases in this chapter as controlling precedent for this dispute. Although the transaction in this dispute is not a lease agreement like in the cases, there is similarity in that the cases and this problem deal with an option renewal. Determine the outcome of the "excuse" issue. Analogize the appropriate case to your conclusion by drawing parallels between the facts and rationale from the case to the facts in this problem. Distinguish the other case using the facts and rationale from the case to show how the outcome here should be different.