Week 8: Final Exam

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Question 1

1. Very wealthy uncle told his niece, I really want to make things easier for your grandmother. She has taken incredible care of all of us over the years, and it is time to return the favor. If you will move in with her and care for her until her death, then her mansion is yours (reasonably expected within the next 6 months). The mansion is worth $5 million. I will make sure it goes to you in the will, or I will personally pay you the $5 million upon her death if it does not. Niece cares for her grandmother for 4 months, after which she dies. Uncle did not arrange for the mansion to pass to niece and refuses to pay the promised $5 million. Can niece enforce?

(A)yes, because uncle and niece concluded a binding bilateral contract;

(B)yes, because uncle and niece concluded a binding unilateral contract;

(C)no, because 4 months of personal care is not sufficient consideration in exchange for $5 million;

(D)no, because Uncle's promise was merely a gratuity to his grandmother for past consideration.

		A
		B
		C
		D

3.75 points

Question 2

1. On August 1, Matt, a Manitoba, Canada seller of widgets, mailed a letter to Beth, a Bliss buyer of widgets for use in her manufacturing process. The letter offered "100 grade A widgets, for immediate delivery, at $50 per widget," but stated that the offer "remained fully revocable, as provided by law, and any reliance on it being irrevocable was unreasonable." Beth received the letter on August 4, and mailed an acceptance to Matt the same day (she also happened to take a "selfie" picture as she dropped it into the mailbox, just for good measure). On August 5, Matt called Beth saying he was no longer interested in selling the widgets to Beth and was revoking his offer. Beth said he could not do so, as she had already made plans to use the widgets. Beth's acceptance was lost in the mail and never arrived (but she can of course prove she mailed it with the selfie). Based on the above facts, does Beth have an enforceable contract?

(A)no, because Matt effectively revoked his offer;

(B)no, because the acceptance was lost in the mail;

(C)yes, because the acceptance was effective upon dispatch;

(D)yes, because Beth's reliance precluded Matt's attempted revocation.

		A
		B
		C
		D

3.75 points

Question 3

1. Pursuant to a written, one-year employment agreement, Company hired Employee to work as a manager of its trash processing plant in Alaska. Employee is from Georgia. Under the employment agreement, Employee was to be paid a monthly salary of $6,000. Company agreed to pay for the transportation of Employee's household goods from Georgia to Alaska. The parties also agreed that Employee would sell the car he currently owned, and Company agreed to buy Employee a car in Alaska.

The agreement also provided that, if Employee were discharged before completing a year of employment, Company would "pay for the following Employee relocation expenditures: return airfare to Georgia up to a maximum of $1,000, the cost of transporting Employee's car from Alaska to Georgia up to a maximum of $2,000, and the cost of transporting Employee's household goods back to Georgia up to a maximum of $5,000." After three months of employment, Company discharged Employee. However, Employee loved Alaska so much that he decided to stay.

Because Employee was not returning to Georgia, Company did not pay the relocation expenditures. Employee therefore sued Company for breach of contract. Will Employee's claim be successful?

		Yes. Because there was a valid contract, and Employee was discharged prior to completing a year of employment, Company is obligated to pay the relocation expenses.
		No. Because the car does not need to be moved across state lines, the employer should only be responsible for relocating the employee's household goods.
		Yes. Employee's relocation damages are recoverable under the "benefit of the bargain" rule.
		No. Because Employee did not decide to return to Georgia, Employee incurred no relocation expenses and therefore cannot recover any damages based on expenditures he did not make.

3.75 points

Question 4

Seller owned a single, very lucrative cookie shop called, "It's in the Chips!" Wanting to expand her business, Seller thought it would be a good idea to franchise her business by allowing people to open their own cookie shops and use the name "It's in the Chips!" and her secret cookie recipes. After interviewing several prospective franchisees, Seller agreed in writing to grant Buyer a franchise. The parties' agreement provided for an $90,000 upfront payment by Buyer and also required Buyer to pay Seller 2% of Buyer's annual profits. National cookie chains charge $100,000-$110,000 and 2% of annual profits. One week later, Seller repudiated the contract, deciding that she could afford to open up her own additional shops. She said to Buyer, "Just buy into another cookie chain. There are at least four others." Buyer therefore sued seeking specific performance as his only remedy. Will Buyer succeed in obtaining specific performance?
		Yes. Given the fact that the price was fair and reasonable in light of the fact that Buyer would be acquiring the first "It's in the Chips!" franchise, the court should not deny relief on the grounds that the deal was unfair.
		No. Buyer cannot show that the remedy at law is inadequate because there are four other cookie chains.
		Yes. Buyer can show that the remedy at law is inadequate and there is no discretionary consideration upon which a court of equity should rely in denying relief.
		No. The price is 10% lower than what other cookie franchisors charge, and the court has the discretion to deny relief if the deal is too one-sided.

3.75 points

Question 5

Employee signed a contract to work as a student services professional at X University pursuant to a four-year employment contract at $100,000 per year. Employee's responsibilities included mentoring the freshman class, serving as a resident assistant at one of the freshman dormitories, and hosting events catered to the needs of freshman college students. At the beginning of Employee's second year with X University, X wrongfully fired Employee. Employee, after making extensive, reasonable efforts, was unable to find another job working in student services for a college or university. Employee therefore sued X for breach of contract and asked the court for damages totaling $350,000, including $300,000, her pay for the remaining three years of the contract, and $50,000 to purchase business clothing because Employee wanted her next job to be a management job. May Employee recover the full $350,000?
		No. Employee cannot recover the $50,000 for the wardrobe makeover.
		Yes. Both items of damages are necessary to restore Employee to her rightful position.
		No. Neither item of damages is necessary to restore employee to the rightful position.
		Yes. Both items of damages are the direct and proximate result of X University's breach, and Employee made a reasonable effort to mitigate her damages.

3.75 points

Question 6

School, a private elementary school, recently received a private grant for building maintenance. School's principal decided that School was in greatest need of new doors so the principal contacted a nearby door company. Door Company offered to give School a good deal on the doors, and School therefore placed an order for 20 doors at a total cost of $40,000. The doors were standard, school-grade doors. Door Company provided installation advice to School and informed School that the first payment of $20,000 for the doors was due in one week. Before School made its first payment for the doors, School's principal repudiated the contract. The principal ultimately selected and purchased doors from another door vendor. Door Company has sued School seeking restitution as its only remedy and asking for the $40,000 School had agreed to pay for the doors. Will Door Company's claim be successful?
		Yes. The claim will be successful because Door Company conferred the benefit of giving installation advice to School.
		No. The claim will not be successful because Door Company should have sued for breach of contact and sought damages.
		No. The claim will not be successful because School was not unjustly enriched.
		Yes. Because School breached the contract, Door Company lost $40,000.

3.75 points

Question 7

Seller sold a tract of land to Buyer for $25,000,000. The land has ten acres and is located in the heart of a big city. Seller advertised the land as a great location for a commercial shopping center. Seller promised to deliver the land to Buyer on March 2. Buyer, in preparation for the transfer of the land, purchased $100,000 worth of tomato plants to be delivered May 3. He wanted to be the first in the country to have a farm in the heart of a big city so that city restaurants would have access to truly local crops. Seller was not aware of this goal, but Seller knew Buyer was a great supporter of local food. Seller delayed two months in giving Buyer possession of the land. Because of this delay, the tomato plants, which Buyer could not plant elsewhere, died. Buyer has sued Seller for breach of contract seeking damages for the value of the lost tomato plants. Will Buyer be successful?
		No. Buyer will not be successful because the loss Buyer incurred was not reasonably foreseeable by Seller as a probable result of the breach at the time the contract was made.
		Yes. Buyer will be successful because Seller breached the contract, and Buyer reasonably relied on receiving the property on March 2.
		No. Buyer will not be successful because Buyer acted unreasonably in arranging for the tomatoes to be delivered only one day after title was scheduled to be transferred.
		Yes. Buyer will be successful because the loss was reasonably foreseeable to Seller.

3.75 points

Question 8

1. The basic remedy for breach of contract in the Anglo-American legal system involves awarding money damages to compensate the aggrieved party for the loss of the benefits that the party would have received had the contract been properly performed.

		Expectation Damages
		Restitution
		Reliance Damages
		Specific Performance

3.75 points

Question 9

1. This ismeasured by the amount of money necessary to compensate the aggrieved party for expenses or loss incurred in reasonable reliance upon the contract that was breached.

		Reliance damages
		Expectation Damages
		Restitution
		Specific Performance

3.75 points

Question 10

1. This remedy is torequire the defendant to disgorge the money value of the benefit that the defendant received from the plaintiff'spartial performance of the contract.

		Reliance
		Restitution
		Specific Performance
		Expectancy

3.75 points

Question 11

1. This remedy is designed to punish the guilty party, as well as making an example of that person and discouraging similar conduct by that party or other parties in the future.

		Specific Performance
		Expectancy Damages
		Punitive damages
		Reliance Damages

3.75 points

Question 12

1. This remedyinvolves an order of the court compelling the breaching party to complete the contract performance.

		Specific Performance
		Reliance Damages
		Restitution
		Expectancy Damages

3.75 points

Question 13

1. Ann was painting her fence on a Saturday afternoon as her next door neighbor, Ben, walked by. It was a hot day, and, seeing that Ann had much left to do, Ben offered to help. Ann gratefully agreed, handing Ben a second brush. A few hours later, they were finished, and Ann said "Thanks, Ben, that was a much bigger job than I had anticipated, and I will pay you $100 for your help. If you will stop by tomorrow, I will give you the money." Ben thanked Ann and returned the next day. However, Ann said she had changed her mind. Is Ann legally obligation to pay Ben the promised $100?

(A)yes, because Ann and Ben have a binding contract;

(B)yes, because Ann would otherwise be unjustly enriched by Ben's work in painting the fence;

(C)yes, because Ben relied on Ann's promise in returning the next day;

(D)no, because all of the statements and actions of Ann and Ben were mere gratuities.

		A
		B
		C
		D

3.75 points

Question 14

1. Ann and Ben planned to be married the next day at a huge wedding with all their friends. That evening, Ann and her lawyer stopped by Ben's house. Ann explained that her lawyer had drawn up a prenuptial agreement for Ben to sign, and it was important to her that he sign it so she would never question whether he was marrying her for her money (Ben had grown up poorAnn came from a very wealthy family). Ben said "gee, I'm not sure, and I should probably talk this over with someone before signing it," but Ann replied "please sign it now Ben, or we'll have to delay the wedding, and everyone will be so disappointed. I wouldn't ask if it wasn't best for both of us." Feeling increasingly pressured, and trusting Ann, Ben signed the agreement. The agreement was very one-sided in favor of Ann, which was obvious from even a cursory review of its terms. It was not, however, illegal or contrary to public policy in Bliss. Three months later, Ann filed for divorce, and Ben sought to avoid enforcement of the prenuptial agreement. What is his single best legal theory?

(A)misrepresentation;

(B)duress;

(C)undue influence;

(D)unconscionability.

		A
		B
		C
		D

3.75 points

Question 15

1. On August 26, Zoe offered Abe $3000 to paint the exterior of her home. The offer included all the necessary details, and Zoe explained to Abe she would like to get the work done in September. Abe said he needed to take a close look at the house and check his schedule, which might take as much as a week, after which he would let her know. Zoe said that sounded fine, as she still had plenty of time to get the job done by the end of September, and she was really hoping Abe would do the work. After looking at Zoe's house and checking his schedule, Abe decided on August 31 that he would accept Zoe's offer. He showed up the next day, September 1, and began painting Zoe's house. When Zoe returned home from work later that day, she told Abe she was surprised to see him there. She said she had contracted with Ray on August 27 for the same work, and Ray would be starting the next day. Have Abe and Zoe concluded a contract for Abe to paint her house for $3000?

(A)no, because the offer was revoked prior to any acceptance;

(B)no, because Abe never accepted the offer;

(C)no, because Abe failed to provide the required notice of his acceptance;

(D)yes, because Abe accepted by beginning performance, thereby promising through his conduct to complete the required performance.

		A
		B
		C
		D

3.75 points

Question 16

Landlord, which owns several restaurant properties, leased restaurant premises to Tenant, which owns a chain of restaurants. The lease included, among others, the following provisions: 6. Landlord will pay for electricity. 11. Tenant will pay for gas or fuel used in storing and preparing food. 12. The parties note that Tenant is contemplating installing an electric, sub-zero refrigerator that will require substantial electricity. If Tenant installs the sub-zero refrigerator (an expensive type of refrigerator that requires a lot of electricity) in its restaurant, Tenant shall install a special meter and pay for the electricity used by the refrigerator. The dictionary defines fuel as "a material (such as coal, oil, or gas) that is burned to produce heat or power." In the restaurant industry, electricity is uniformly considered a type of fuel. In operating Tenant's restaurant, Tenant used both the electric and gas stoves already in place in the restaurant. Landlord refused to pay for the electricity used by Tenant's electric stoves. Tenant sued Landlord for breach of contract. Will Tenant win?
		No. The contract requires the Tenant to pay for electricity if Tenant installs a sub-zero refrigerator.
		Yes. Landlord expressly agreed to pay for electricity.
		No. The contract requires Tenant to pay for "fuel" and the relevant trade usage requires Tenant to pay for the electricity.
		Yes. The contract, interpreted as a whole, communicates that the Landlord will pay for electricity used in any way, including electricity used in storing or preparing food.

3.75 points