Question 25

4 pts

List and briefly describe the four required elements necessary to form a valid contract.

Mutual Assent: Broad requirement to be met and form enforceable contract Consideration: Is a mutual exchange of benefits each party receive of value resulting in a bargain for exchange Capacity: Contracts will be enforced by the courts only if each party has the legal capacity to enter into a contract. Legality: both the subject matter and performance of the contract must be legal.

Question 22

4 pts

The Battle of the Bands Festival organizing committee entered into a contract last year with Tracy Adams to have her give a one-time singing performance at the festival this year for $1,200. Tracy recently broke off from her former band and is now a solo performance. Since the contract was signed, her solo song, "You are the Shrimp and Grits of my Life" went platinum and Tracy became a big star. Tracy's agent called the festival organizer to tell them that Tracy is no longer available but she has delegated her responsibility under the contract to her former band, the Kentucky Bluegrass Bandits.

Does the Battle of the Bands Festival committee have to accept this substituted performance? Explain why or why not.

Question 21

4 pts

Mary and Penny enter a contract in which Penny agrees to buy Mary's small consignment business for $300,000.00. Penny goes home and realizes the stock market is reducing her financial position and perhaps this is not a good time to buy another business. Penny has lunch with Peter and tells him the situation. Peter says he would love to buy Mary's business.

Can Penny assign her right to buy Mary's business to Peter? Explain why or why not.

Question 20

4 pts

Eagle Company contracts to build a house for Frank. The contract states that "any assignment of this contract renders the contract void." After Eagle builds the house, but before Frank pays, Eagle assigns its right to payment to Good Credit Company. Can Good Credit enforce the contract against Frank? Explain why or why not.

Question 17

4 pts

Explain why, under the parol evidence rule, courts refuse to admit outside evidence, such as testimony, that contradicts the terms of a written contract between two parties. Do not just define the rule; explain the rationale behind it.

Question 16

4 pts

Frank is a small business owner who has unsuccessfully tried to get a contract with Eglin Air Force Base for several years. He finally has become so frustrated he is willing to do almost anything to get the contract. Frank's friend Victor knows some of the Eglin officials. Frank and Victor enter into an agreement in which Frank will give Victor $25,000 cash now and 5% of any government contract Frank eventually gets. Victor promises to use $15,000 of the cash to bribe an Eglin official to give Frank a government contract.

Victor decides to keep all the money and does not even try to bribe anyone. Frank wants to sue Victor for breach of contract. Can Frank win such a lawsuit? Explain why or why not.

Question 15

4 pts

Olivia was interested in buying Jim's car. Olivia asked Jim if the car had been in any accidents, to which Jim responded "no." Olivia also asked him if he was the only owner, to which he said "yes." Olivia agreed to buy the car for $3,500 and paid Jim by check. Olivia's first stop was at her mechanic's where he said the car had been in a wreck, and there was serious damage to the engine that was going to cost more than $1,000. Olivia then did a title search on the car and realized that Jim was actually the second owner. Olivia called her bank and cancelled the check. She called Jim and told him about the cancellation and that he could come get the car any time he wanted.

Jim sued Olivia for breach of contract. Olivia wants to raise a defense showing that Jim fraudulently misrepresented the condition of the car and the number of owners.

a. What are the three elements Olivia must prove to show there was a "fraudulent misrepresentation?"

b. Is Olivia likely to be successful in her defense? Explain why or why not.

Question 14

4 pts

Billy is 16 years old. He really wants the newest XBox. His parents have decided not to buy one for him, as his grades are not very good. One day, Billy finds an ad from Phillip, a 23 year old graduate student, selling a "like new" XBox system. He goes to Phillip's home, looks at the system and agrees to buy it for $200. Billy takes the XBox home and plays it for several weeks. One day he spills soda on it and the XBox stops working. The next day he returns the system to Phillip and demands his money back and Phillip does not refund the money.

If Billy sues Phillip, who will win and why? What are the damages likely to be for the winning party? Explain your answer.