Using your knowledge of contract formation and defenses, please review the following scenarios and state whether there is a valid contract, (i.e., an offer, acceptance and consideration) and answer any other questions.

1.Joe asked Leroy, an insurance agent for a large insurance company, to issue him a homeowners' insurance policy in exchange for payment of $500. Joe paid in full and, during a hurricane, said insurance company refused to pay for water damages caused by high winds and flooding. They claim it is "Not Covered." Joe did not ask any questions before paying and Leroy never advised Joe that he was not covered.

a.Is there a contract?

b.Was it breached?

2.Jack and Jill are neighboring gardeners at their local community garden. While discussing tomatoes, Jill says, I have these magical corn beans in my car. They can grow eight ears of corn per bean in less than two weeks. "I will trade you ten of them for ten of your jumbo tomatoes" that will ripen in two weeks. Jack agrees and plants the beans. Two weeks later, Jill demands the award winning tomatoes and Jack, who has two ears of corn refuses.

a.Is there a contract?

b.Was it breached?

3.Three law students agree to share the expenses and rent for an apartment three blocks away from the law school. They verbally agree to pay $900 a month rent to the landlord for the next six months. After three months on contract law, they stop paying rent because the lease is not in writing. Landlord sues for breach of contract.

a.Is there an oral contract?

b.Was it breached?

4.A 17-year-old contracts to buy his neighbor's car. The neighbor is 18-years- old.

a.Is there a contract?

b.Was it breached if the neighbor sells it to someone else for $100 more?

5.A rock band was about to begin a grueling four-month world tour. The band's manager telephoned a massage therapist and said that he would like to reward the band for all their hard work on the tour by booking massages for all of the band members immediately after the last show in the tour. The therapist agreed to perform the massages at a deeply discounted rate because she secretly was a devoted fan of the band and excited to have the opportunity to meet the band members. Just before the first scheduled performance, the band's singer developed a rare throat infection, and as a result, the band had to cancel the tour at great expense. The manager notified the massage therapist that her services would not be needed. The therapist objected and demanded that the manager arrange for her to perform the massages for the band at a different time.

a.Is there a contract?

b.Was it breached?

6.The inventor of a laser-beam vegetable chopper ran a television ad that described the chopper and said, "This chopper is yours for only $49.99 if you send your check or money order" to a specified post office box. The owner of a retail specialty shop wrote to the inventor, "What's your best, firm price for two dozen choppers?" The inventor sent a written reply that said in its entirety, "We quote you for prompt acceptance $39.99 per unit." Two months later, the shop owner subsequently mailed a check to the inventor in the appropriate amount, with a memo enclosed saying, "I accept your offer for 24 choppers."

a.Is there an enforceable contract?

7.A gambler lives in a state where gambling was illegal. Nevertheless, he gambled on a regular basis. He asked his friend to lend him $5,000 to bet on a football game. His friend agreed to lend him $5,000 if the gambler would bet half of it on the friend's behalf. The gambler agreed, took his friend's $5,000, and placed the bet. The gambler won on 4-to-1 odds. He gave his friend his $5,000 back but refused to tender any winnings.

a.If his friend sues the gambler to recover the winnings due under the contract, who will prevail?

8.On November 3, an investor who had watched his stocks sink to unprecedented low levels sent a fax message to a dealer in precious metals: "Please quote your best price on 800 troy ounces platinum bars for immediate delivery at my bank." At 10 a.m. the next morning (November 4) the dealer replied by fax, "My best price is $475 per ounce." The investor received the dealer's message later on that same day.

a.Is there a contract if funds are sent by the end of the day on November 4th?

9.A student and her boyfriend were going away to college and had quite a few personal belongings to transport. The student drove in her car while her father and her boyfriend rode in the father's van. About halfway to the college, while the van and the car were driving down the freeway, the van suddenly swerved out of control and ran off the highway, ending up on its side in the center divider. When the student ran to the van, she discovered to her horror that her father was dead, and her boyfriend appeared to be injured, but not severely. Because her father previously had heart trouble, the student assumed that he had had a heart attack while driving. Filled with remorse, the student told her boyfriend, "I'm so sorry about this. I'll make good any losses you suffer because of this accident."

The boyfriend learned that he had suffered an injury to his spinal column that would prevent him from ever playing basketball again. He had been a scholarship athlete in basketball at the college and was considered to be a certain high draft selection for a professional basketball league when he graduated. The boyfriend brought an action against the student for several million dollars in damages. A subsequent investigation revealed that the accident was caused solely by a defect in the steering mechanism of the van.

a.Is there a valid contract between boyfriend and girlfriend?

b.Assuming there is a contract, can you think of any defenses the student could assert against her boyfriend's claim?

10.The owner of a mint-condition classic car wrote a letter to his trusted car mechanic offering to sell him the car for $45,000, if he bought it before April 15. The mechanic researched the current market value of the car online and discovered that comparable vehicles were being sold for $48,000. On April 1, he was just leaving his home to drive to the car owner's house to give him a check for $45,000 when he received a text from the owner stating that he had changed his mind and the car was no longer for sale. The mechanic drove to the owner's house anyway, where the car was parked out front with a "for sale" sign in its window. The mechanic knocked on the owner's door and, when he answered, tendered the $45,000 certified check and demanded the car. The owner refused.

a.Is there a contract?

b.Was it breached?