Question 7 7. Which of the following is FALSE? Even if the offeror had very convincing evidence about what he really intended by what he said and/or did, the judge will probably not be swayed to rule in his favor if the jury interpreted his words and actions as having created a live offer from the perspective of the offeree. Generally, silence or inaction cannot serve as an effective means of acceptance. Sally offered to sell her home to Bret for specific and definite terms. Bret counter-offered to buy the home under the same terms but for $20,000 less than Sally offered. It Dan jumped into the picture by offering Sally $10,000 more to buy her house than Bret was offering, she would be legally entitled to accept Dan's offer. If Sally did that, Bret would probably have no valid legal claim against either her or Dan Normally, the offeror would want to nullify the mailbox rule. Assume you lose your dog and post a few signs around your neighborhood offering a reward of $100 for the return of your dog. Your neighbor finds and returns your dog and doesn't ask for the reward because he hadn't yet seen your posted reward offer. Once he sees he he demands that you pay him the $100. Since you made a unilateral offer of contract and he did everything you asked, he has effectively accepted your offer and is legally entitled to collect the reward money. Question 8 Which of the following is FALSE? Generally, the value element of the consideration hurdle requires the economic values of the parties' respective considerations to be roughly the same. In order to encourage her son to drive carefully. mom offered him $1.000 it he had no tickets or accidents caused by his negligence by the time he reached the age of 18. He accepted. Even though this agreement jumped the offer and acceptance hurdle, it did not jump the consideration hurdle making it unenforceable against mom. The general purpose of the consideration hurdle is to objectively show the seriousness of the two contracting parties to enter something binding. Generally. In order for the consideration hurdle to be jumped, both parties must significantly change their legal positions because of their agreement Generally, in order for the consideration hurdle to be jumped, both parties must incur legal liabilities in order to gain legal rights from the other party D Question 9 9. Which of the following is FALSE? In order for a minor to avoid a contract for a non necessity, under the majority rule all she has to do is give back what she bought in whatever condition it is in and she can get all of her money back and cancel all future obligation under the contract without any legal obligation to pay for any damages to the thing bought Barbara hires Martin to put a road across her and for $500,000 About a quarter of the way through the job, a UFO is seen flying over the area in broad daylight and many see it spray some sort of green cloud over the entire area-including Barbara's land on which the road is being made Government officials are called in to investigate. While they cannot measure anything about the residual green fuzz all over the area that would indicate any known human health hazards, the government advises that people leave the area to avoid contact until further tests can be completed. In response. Martin tells Barbara that he will only agree to stay and finish the job if she agrees to double the agreed upon price for the project. She agrees and Martin finishes the road construction. Under these circumstances, Barbara will only legally owe Martin the original contract price since he did nothing more nor less than he originally agreed and hence gave no new consideration sufficient to justify a doubling of the original contract price. The Red Owl case effectively created an exception to the general rule requiring consideration and which is known as "promissory estoppel' or 'detrimental reliance." It an adult makes a contract with a minor, only the minor has the option to avoid the contract because of his minority-not the adult If you are involved in an automobile accident, it may be wise to delay settling with the insurance company over your bodily injuries since you may have experienced some 'soft tissue injuries (like spinal injuries that do not fully manifest themselves immediately. It is possible to settle out with the insurance company regarding the property damage to your car and specifically reserve the right to negotiate a final settlement concerning your personal injuries sometime later. But you should not wait so long that it allows the statute of limitations to expire on your claim. Question 10 10. Which of the following is FALSE? A minor cannot clect to keep part of the contract and avoid the rest-it is an "all or nothing' option regarding his avoidance powers. While a minor is conclusively presumed to lack contractual capacity, an adult is rebuttably presumed to have contractual capacity and if the adult claims otherwise, it is his burden of proof to convince the court that he lacked the ability to appreciate the fact that he was entering something binding Adults will usually have a very difficult time trying to meet that burden of proof After reaching the age of majority, a minor can no longer avoid the contracts he made while he was a minor Over time, the law seems to be chipping away at a minor's power to avoid a contract because of his minority. This is indicated by some modern courts ruling lor state statutes saying) that a minor has to pay reasonable value to avoid a contract for necessities and cannot avoid a contract when he tries to use his avoidance power as an offensive weapon rather than a defensive shield, lies about his age, or makes a contract in context of the minor's own business or while married. Considering the case about a minor named Johnny buying a car from a car dealer through a newly-met adult middle man in a simultaneous 3-party transaction and then destroying the car while out on a joy ride, this case was used to illustrate (1) how dangerous it is for an adult to make a contract with a minor, and (2) the judicial doctrine of "substance over form." Question 11 11. Which of the following is FALSE? In most states 18 is the dividing line between the minor and adult status. We do not have total freedom of contract. The "Legality and Public Policy hurdle effectively defines the legally allowable "held of play regarding contracts. We are free to contract within the defined field of play, but contracts that fall outside the field of play will not be legally enforceable no matter how clear and sincere the intents of the parties were to enter such an agreement Insurance contracts are not considered to be illegal gambling contracts since there is nothing artificial about the risks concerning which the parties contracted they are all naturally occurring risks that people seek to guard against by buying insurance. Assume that Tommy was a minor when he made a contract with Sheryl an adult. When Sheryl finds out he was, and still is a minor, she offers to pay him $100 if he will promise not to exercise his avoidance powers concerning the contract. Assuming that amount is above the token or nominal level relative to the subject matter of the original contract, if he makes that promise in exchange for that money, he will no longer have any avoidance power over the original contract. Gambling was defined as the artificial creation of risk for the mere purpose of assuming it." Question 12 12. Which of the following is FALSE? O An exculpatory clause" seeks to get the other party the contract to pre-waive any legal right he may later have to sue you if and when your future fault causes him any harm. Generally, these clauses are unenforceable as being against public policy since they tend to encourage carelessness instead of carefulness If the law requires you to obtain a protective license before providing some sort of service to the general public and you perform such services while not having that license, you cannot legally force your clients to pay for whatever competent services your perform on their behalves but can still be held liable for professional malpractice to your dients if you perform those services below the level expected of licensed professionals. The reason anti-competition contracts are generally unenforceable, is because competition in a free market tends to make kings and queens out of ordinary consumers when compared to people living in ancient times and even people today who live in the un-free part of the world of covenants-not-to-compete were always unenforceable, then "goodwill would effectively become une table in the context of a sale of a business. Assume you own a pizza parlor in town and Alfonso approaches you and the other pizza parlors with the following proposition after telling you all that he makes the best pizza in the world, he will agree to not start a competing pizza parlor anywhere in Cedar City for one year if you each give him $1.000. After you each agree and pay him the money, he immediately opens a new pizza parlor in town. Since a court would probably find both the geographic and time scope of those agreements to be reasonable they would probably be enforceable and you all could at least get a court judgment ordering Alfonso to pay all your money back because he broke his promises