QUESTION 1

After watching the inspiring documentary, "The King of Kong," in which Steve Weibe earned a place in the Guinness Book of World Records after breaking Billy Mitchell's high score in the video arcade game, Donkey Kong, multi-billionaire Bill Fences offered a $1,000,000 award to "anyone who breaks Steve Weibe's world-record high score on a classic, coin-operated Donkey Kong machine." Although Donkey Kong requires near-perfect timing, fast-reflexes, and tremendous hand-eye coordination, a brash young law student, James T. Hart, thought that he was up to the task, and began shopping for his very own Donkey Kong machine to take a stab at the record. He found a merchant, Sarah, selling a Donkey Kong machine on ebay.com, and contacted Sarah to explain that he had no money, but needed the machine to break Steve Weibe's record, and that a reward was being offered by Bill Fences for $1,000,000. Sarah was skeptical of giving away the machine for free, but after James promised to beat Steve Weibe's record, and promised that he would pay her in full after he had done so, Sarah concocted a plan of her own. She told James that she would be willing to give him the machine for free if he promised to give her $500,000 upon beating Steve Weibe's record, and she further made him promise to beat Steve Weibe's record. James agreed to this deal, and the two arranged to have the machine delivered to James' residence the next day. Although Sarah was not a great video-gamer, she knew a lot about computers, and understood the level of skill required to play Donkey Kong successfully. Therefore, she thought that if she could manipulate the motherboard to slow down the game, even if slightly, James would have a much better chance of beating Steve Weibe's record. After several hours, Sarah succeeded in slowing down the game just enough to improve James' chances at beating Steve Weibe's world record, while hiding what she had done to the naked eye. As promised, the next day, Sarah delivered the machine to James, without revealing to James what she had done to the machine, and James accepted delivery. In part due to the slowed-down motherboard, the game was easier than James had remembered it. After several months of playing, during which time James neglected his hygiene, his sleep, and his studies, James finally had the world record in sight. His finals were fast arriving, and he called Sarah to tell her that he probably would have to return the machine to her to start preparing for his finals. He explained that, if he did not start studying, he might get kicked out of law school, and would probably lose his summer job at Dewey Howe and Cheatem, where he would be making $30,000 over the summer. Sarah encouraged him to keep playing, and told him that getting kicked out of law school is not so bad for a millionaire. With her encouragement, James continued to play Donkey Kong, sometimes for as many as 20 hours a day, and finally beat Steve Weibe's high score. All of this came at a pretty high cost, however. He got kicked out of law school, lost his summer job, and spent 3 days in the hospital, where he was treated for dehydration and paranoia due to excessive gameplay. Once he was released from the hospital, he called Bill Fences to collect his reward, but was told that no money would be forthcoming.

Task: Please discuss all contracts issues raised by these facts, including who will sue whom, for what, and who will likely prevail in each claim, and why.