Contracts Multiple Choice Questions - Law School Mcqs

63 Questions  I  By Dmatski
Contracts Multiple Choice Questions - Law School MCQs
Multiple Choice Questions about law school contracts course.

  
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1.  Integrated Circuit Technology, Inc. ('ICT') was having difficulty finding qualified engineers to work in its expanding production facilities because the hardware needed to train top-flight engineering students was so expensive that most colleges could not afford to purchase more than a minimal amount of such equipment, which limited program sizes and held down the number of applicable engineering degree candidates. ICT's chief executive officer, Cruz, wrote the following letter to the heads of several universities:  If you will commit your institution to accepting in your engineering degree program every junior-year undergraduate who wishes to pursue that major, ICT will provide your institution with all the necessary electronic hardware to instruct such students. Our engineers have informed me that one set of equipment (i.e., one each of every machine used by ICT in its production process) is sufficient for use by five students; therefore, for every five engineering degree majors you accept in excess of your current engineering degree population, ICT will provide one such set of equipment. Jackson, chancellor of Seaport College of Engineering ('SCE'), also received a letter from Cruz. The ICT letter arrived during SCE's annual budget review process, and Jackson was called upon to decide how much of the college's limited funds to apply to engineering equipment purchases. The day that she received Cruz's letter, Jackson informed the budget committee that no funds would be needed from that year's budget for engineering equipment purchases. A few days later, as Jackson was dictating the acceptance letter to ICT, she received a second letter from Cruz indicating that the ICT equipment program was being canceled due to an influx of qualified foreign engineers to the United States. Because the budget had been approved and all available funds had been committed to nonengineering equipment purchases, Jackson mailed the acceptance letter anyway and it was delivered to Cruz at ICT. If SCE brings a breach of contract action against ICT, what result?
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2.  In July of last summer George, a grape grower, contracted with Walter's Winery to deliver '500 tons of premium quality pinot chardonnay grapes grown on my ranch Grapeacre in Grape County.' The price was to be $1,000 per ton and delivery was to be on or before September 15. In August of the same year, George entered into an identical contract with Vinnie's Vintner Co. to sell 300 tons of premium quality pinot chardonnay grapes. George completed his harvest by September 10 and had 800 tons of premium quality grapes. On September 11, an unexpected rain ruined 400 tons, and George notified Walter and Vinnie on that day that he would only be able to deliver 250 tons to Walter and 150 tons to Vinnie. On September 14, Vinnie purchased an additional 150 tons of premium quality pinot chardonnay grapes from Godfrey, one of several other available sources for premium quality pinot chardonnay grapes. These grapes along with the 150 tons from George gave Vinnie the 300 tons he needed. On September 15, what is Walter's Winery's legal position with regard to George's failure to deliver the 500 tons of grapes required by his contract?
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3.  Christine and her friend Zelda were going away to college and had quite a few personal belongings to transport. Christine's father offered to drive them in his van, but when the van was loaded they discovered there was only room for two people, so Christine asked her boyfriend Harry to drive her in his car while Christine's father and Zelda rode in the van. About halfway to the college, while the van and Harry's car were driving down the freeway, the van in front, the van suddenly swerved out of control and ran off the highway, ending up on its side in the center divider. When Harry stopped his car and Christine ran to the van, she discovered to her horror that her father was dead. Zelda appeared to be injured, but not severely. Because her father previously had heart trouble, Christine assumed that he had had a heart attack while driving, although a later investigation would reveal that the accident was caused solely by a defect in the steering mechanism of the van. Filled with remorse, Christine told Zelda, 'I'm so sorry about this. I'll make good any losses you suffer because of this accident.' Later, when Christine learned that Zelda was going to seek treatment from Dr. Winston, she wrote the doctor a letter stating that she would be responsible for all of Zelda's medical expenses; Dr. Winston received the letter the next day. Assume for purposes of this question only that several months after the accident, but within the applicable statute of limitations, Zelda discovered that she had suffered an injury to her spinal column that would prevent her from ever playing basketball again. Zelda had been a scholarship athlete in basketball at the college and was considered to be a certain high draft selection for the newly formed women's professional basketball league when she graduated. She brought an action against Christine for several million dollars in damages. Which of the following is the best defense Christine could assert against Zelda's claim?
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4.  On January 2, Smith borrowed $1,000 from his friend Jones, agreeing in writing to repay the loan within a year. In September, it became clear to Smith that he would have difficulty meeting the year deadline, and so Smith approached Brown with the following proposition: Smith would perform 200 hours of work for Brown during the next six months at the special rate of $5 per hour, if Brown would agree to pay $1,000 for the entire 200 hours to Jones on the following January 1. Brown agreed. By January 1, Smith had only worked five hours for Brown, and Brown stated to Smith that he would not pay Jones because Smith had not worked enough. Smith responded, 'That's okay, just hold on to the money until I get 200 hours in, then pay Jones.' Brown agreed. Assume for purposes of this question that after the agreement between Smith and Brown was entered into in September, Smith informed Jones of the arrangement. Jones's response was, 'I don't care who pays me but if I don't get my money by January 2, I'll sue.' The January 1 modification between Smith and Brown occurs, and after learning of the modification, Jones sues Brown for $1,000. What is the probable result of this action?
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5.  Tortfeasor tortiously injured Victim in an auto accident. While Victim was recovering in Hospital, Tortfeasor's liability insurer, Insurer, settled with Victim for $5,000. Victim gave Insurer a signed release and received a signed memorandum wherein Insurer promised to pay Victim $5,000 by check within 30 days. When Victim left Hospital two days later, Hospital demanded payment of its $4,000 stated bill. Victim thereupon gave Hospital his own negotiable promissory note for $4,000, payable to Hospital's order in 30 days, and also, as security, assigned to Hospital the Insurer settlement memorandum. Hospital promptly assigned for value the settlement memorandum and negotiated the note to Holder, who took the note as a holder in due course. Subsequently, Victim misrepresented to Insurer that he had lost the settlement memorandum and needed another. Insurer issued another memorandum identical to the first, and Victim assigned it to ABC Furniture to secure a $5,000 credit sale contract. ABC immediately notified Insurer of this assignment. Later it was discovered that Hospital had mistakenly overbilled Victim by the amount of $1,000 and that Tortfeasor was an irresponsible minor. In view of Tortfeasor's age and irresponsibility when Insurer issued his liability policy, can Holder and ABC Furniture recover on their assignments?
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6.  QUESTIONMater, a wealthy widow, wishing to make a substantial and potentially enduring gift to her beloved adult stepson, Prodigal, established with the Vault Savings and Loan Association a passbook savings account by an initial deposit of 10000.For this question only, assume the following facts. The passbook was issued solely in Prodigal's name; but Mater retained possession of it, and Prodigal was not then informed of the savings account. Subsequently, Mater became disgusted with Prodigal's behavior and decided to give the same savings account solely to her beloved adult daughter Distaff. As permitted by the rules of Vault Savings and Loan, Mater effected this change by agreement with Vault. This time she left possession of the passbook with Vault. Shortly thereafter, Prodigal learned of the original savings account in his name and the subsequent switch to Distaff's name. If Prodigal now sues Vault Savings and Loan for $10,000 plus accrued interest, will the action succeed? 
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7.  In early January 2004, representatives of MacDougall Corporation, makers of the famous MacDougall Dog hot dog and related convenience foods sold through thousands of owned and franchised 'MacDougall's' restaurants, met with representatives of Time Management, Inc. ('TM'), a firm specializing in time-and-motion studies of labor intensive industries. After extensive negotiations, it was orally agreed that TM would redesign the food production area of MacDougall's restaurants, including modification of cooking equipment, if necessary, so that, using existing MacDougall's food products, savings in labor costs through reduction in restaurant cooking staffs would result. Lawyers for MacDougall's subsequently drafted a written agreement, sent it to TM, whose lawyers modified the draft, and returned the modified draft to MacDougall's. This modified writing, signed by both parties, stated in its entirety: Provided that at least 2,000 work-hours per restaurant are eliminated, MacDougall Corporation will pay to TM within 90 days of installation of new food production systems at MacDougall's restaurants in Richmond a first installment of $1 million. Upon installation of new food processing systems nationwide, MacDougall Corporation will pay to TM a second and final installment of $1.5 million. Nationwide installation must be completed by January 15, 2005. Any amendments to this agreement must be in writing signed by both parties. TM immediately began work on the restructuring of MacDougall's food processing methods. On September 5, 2004, a radical change in the layout of MacDougall's kitchen area and new personnel assignments had been designed, and TM demanded payment of the first installment payment of $1 million. MacDougall Corporation refused, but negotiations conducted between the parties resulted in an oral agreement that MacDougall's would pay $750,000 immediately and then the $1.5 million second installment as originally agreed, after nationwide installation of the new system. The restructured food production system was installed and in operation in all Richmond MacDougall's restaurants on October 1, 2004. Subsequent audits revealed that the new system enabled MacDougall Corporation to eliminate 1,500 work-hours per restaurant, saving the corporation $90,000 in labor costs for all Richmond restaurants. The new system required that MacDougall's increase the length of the famous MacDougall Dog by three centimeters and that the 'Mother MacDougall Hot Apple Fritters' be made in a rectangular shape rather than the traditional round form. Nationwide installation of the new system in all MacDougall's restaurants was completed on January 30, 2005. The 1,500 work-hours per restaurant savings to MacDougall Corporation was projected at $1.8 million per year. TM sent a certified letter to the chief executive officer of MacDougall Corporation requesting his certification that the new food production system was in place and operating as promised, and demanding the $1.5 million second installment. The CEO refused to so certify and refused to make any payment, noting in his reply letter that the system had not been installed by January 15, 2005, and that it did not use existing MacDougall's food products, as promised by TM. Assume for the purpose of this question only that an express condition of Mac- Dougall Corporation's duty to pay the contract price failed and that TM was in breach because it failed to complete nationwide installation of the food processing system by January 15, 2005. If TM brings an action to recover the reasonable value of its services, will it likely succeed?
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8.  Producer hired Fiddler to play in an orchestra that was to leave on a 10-week tour of the United States. Fiddler, a musician, turned down another job opportunity in order to accept Producer's job offer. One week after the start of the tour, Fiddler was hospitalized with a bad back and was unable to perform. Producer hired Player to take Fiddler's part in the orchestra. Four days later, Fiddler recovered but Producer refused to allow Fiddler to rejoin the orchestra or to complete the tour. Fiddler then sued Producer for breach of contract. Which of the following is Fiddler's best legal theory?
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9.  Aunt Sheila told her niece, Sinead, 'I'd like you to go to Tara Imports and select the $300 lace shawl of your choice and I'll buy it for you if you wear it to the ethnic festival. I want you to look as sweet and delicate as an Irish rose.' Sinead, a modern 22-year-old, despised shawls because she thought they were 'the sorts of things old ladies wear.' Also, her taste in music ran to heavy metal rock and roll, rather than the traditional Celtic bagpipe and fiddle music she would be subjected to if she went to the ethnic festival. However, Sinead really loved Aunt Sheila and did not want to hurt her feelings. She went to Tara Imports and purchased a $300 lace shawl imported from Ireland. Sinead accompanied Sheila to the ethnic festival wearing the shawl, and Sheila was very pleased. Assume for purposes of this question only that Sheila died shortly after the festival and her estate refuses to reimburse Sinead for her purchase. Sinead filed suit. Her attorney advanced four legal theories on which he asserts that Sinead can collect the $300 from Sheila's estate. They are as follows: (I. Promissory estoppel. (II. Bargain and exchange. (III. Conditional gift. (IV. Account stated. (Which of the following represents the correct combination of legal theories that support Sinead's case against Sheila's estate?
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10.  Civil service rules, which have been on the books in the city of Charlesville for many years, provide that any member of the police department must serve a one-year probationary period before he or she will be considered a permanent employee. In fact, this rule was enacted before Charlesville had a police academy, and now a prospective police officer spends six months in the academy before being hired by the city. Ruby, a graduate of the police academy, was with the city police department for eight months when she was terminated. There were no city ordinances or state laws that required that Ruby be given a reason for the termination or a hearing, and she was given neither. Which of the following facts, if shown, gives the city of Charlesville the strongest argument for refusing to give Ruby a statement of reasons why her employment was terminated and for denying her the opportunity to contest the termination?
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11.  Jenny, a general contractor, advertised in a trade publication that she planned to bid on the construction of a new building to be located in the Civic Mall. The advertisement welcomed bids from subcontractors to perform various functions, such as plumbing, electrical work, and masonry. The lowest plumbing bid was from Plunger, who bid $10,000. Jenny used Plunger's bid in preparing her general bid. At 2 p.m. on June 22, Jenny submitted her general bid. At 3 p.m. Plunger called her and said, 'I'm sorry, Jenny, but I made a mistake on that bid I submitted to you; I can't possibly do that plumbing work for a dime less than $12,000.' Jenny told him, Look, you've done a lot of good work for me in the past and we all make mistakes. I'll just forget you ever made that $10,000 bid. Plunger effusively thanked Jenny. Jenny then hired Flusher to do the plumbing work for $12,000. She then sued Plunger for damages. Jenny will:
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12.  Zeller contracted in writing to deliver to Baker 100 bushels of wheat on August 1 at $3.50 per bushel. Because his suppliers had not delivered enough wheat to him by that time, Zeller on August 1 had only 95 bushels of wheat with which to fulfill his contract with Baker. If Zeller tenders 95 bushels of wheat to Baker on August 1, and Baker refuses to accept or pay for any of the wheat, which of the following best states the legal relationship between Zeller and Baker?
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13.  Wendy, a wealthy widow, owned a prime piece of land in an exurban area populated by affluent residents. Wendy had a daughter, Dorothea, who was Wendy's only child and the 'apple of her eye.' Dorothea was 23 years of age and engaged to be married to Pemberton d'Argent, a rich, polo-playing investment banker. Wendy wanted to give Dorothea a very special wedding gift. Wendy therefore entered into a written agreement with contractor Brikk whereby Brikk would build a house on the property for $300,000. The house was to be built to very exacting specifications that described in great detail the materials to be used, the exact shape of each room, etc. These specifications were included in the written agreement between Wendy and Brikk. The agreement provided that Wendy would pay Brikk $300,000 upon completion of the building according to specifications and that Brikk would turn the keys to the home over to Dorothea. After the agreement was signed by both Wendy and Brikk, Dorothea and Pemberton looked at some fine homes in the same general area. They had two opportunities to purchase suitable homes at good prices, but decided to turn them down. Since then, property values in the area have increased by approximately 30%. Just as Brikk was about to begin construction of the house, he discovered that an underground river bisected Wendy's property. This left insufficient subterranean support to construct the house as planned. Assume for purposes of this question only that upon discovering the underground river, Brikk refused to try to build the house for $300,000. If Wendy files suit demanding specific performance or damages from Brikk, which of the following additional facts, if proven, would most favor Wendy's case?
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14.  On February 1, Ridewell Rubber Co. telephoned Smithson Tire Shop and offered to sell to Smithson 500 series 4 Ridewell tires for $20,000. Smithson accepted immediately. On February 3, Smithson sent Ridewell a letter confirming the deal and stating that Smithson was counting on a 20% discount due to the size of the purchase. On February 20, Ridewell telephoned Smithson and stated that it could not afford to sell the 500 series 4 tires for less than 30000. If Smithson brings suit against Ridewell and Ridewell asserts the Statute of Frauds as a defense, will Smithson prevail?
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15.  Integrated Circuit Technology, Inc. ('ICT') was having difficulty finding qualified engineers to work in its expanding production facilities because the hardware needed to train top-flight engineering students was so expensive that most colleges could not afford to purchase more than a minimal amount of such equipment, which limited program sizes and held down the number of applicable engineering degree candidates. ICT's chief executive officer, Cruz, wrote the following letter to the heads of several universities: If you will commit your institution to accepting in your engineering degree program every junior-year undergraduate who wishes to pursue that major, ICT will provide your institution with all the necessary electronic hardware to instruct such students. Our engineers have informed me that one set of equipment (i.e., one each of every machine used by ICT in its production process) is sufficient for use by five students; therefore, for every five engineering degree majors you accept in excess of your current engineering degree population, ICT will provide one such set of equipment. Marchand, chancellor of Middle States University ('MSU'), received a letter from Cruz and immediately mailed a reply letter accepting ICT's generous offer. A few weeks later, Marchand received another letter from Cruz explaining that the response to his original letter had been so overwhelming that schools such as MSU who had no history of supplying graduates to ICT as employees would have to be omitted from ICT's equipment program. If MSU brings an action for breach of contract against ICT, what result?
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16.  Martha needed a new pair of shoes. She went to her local Skysheim shop and told the salesperson that she worked in the city's downtown area and had to walk eight blocks to get from her house to her commuter train and then six blocks from her train to her office. During the workday, she had to climb up and down stairs several times. She wanted shoes that were suitable for walking on concrete, had gripping power for stairs, and were comfortable. The salesperson went into his stockroom and brought out four different styles of Skysheim's 'Clouds,' reputably the most comfortable shoe on the market, designed for the type of use that Martha had in mind. Martha tried on each of the four pairs but did not like the way any of them looked. While walking around the store, however, Martha saw a shoe she did like|'Hobblers,' Skysheim's high-fashion shoe. She told the salesperson to bring her a pair to try. He did so and explained to Martha that Hobblers were completely made of the finest leather and would probably last for years. Martha tried on the shoes and told the salesperson that she would take them. Assume for this question only that Martha bought the shoes and wore them twice. She decided that they were too uncomfortable for her daily commute. She took the shoes back to the Skysheim shop and demanded her money back. Skysheim refused. If Martha sues to get her money back, under which theory would she most likely prevail? I. Breach of the implied warranty of fitness for particular purpose. II. Breach of the implied warranty of merchantability.III. Breach of express warranty.
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17.  Hair of the Dog, a small pet store, entered into a written contract with Pet Products, Inc. whereby Pet Products agreed to supply Hair of the Dog with whatever quantity of pet food it might order, at a mutually agreed price, for two years, with an option to renew. Also, the contract required that Hair of the Dog buy its pet food from Pet Products only. For the first six months of the contract, Hair of the Dog ordered from Pet Products 10 cases of pet food per month. In the seventh month, the owner of Hair of the Dog sold the shop, inventory, and accounts receivable to Amalgamated Pet Shops, a chain operation. As part of the sale, Hair of the Dog assigned to Amalgamated the contract with Pet Products. Amalgamated promptly notified Pet Products of the sale and assignment. That same month, Amalgamated, looking to stock the pet food in stores throughout its chain, sent Pet Products an order for 5,000 cases of pet food on the terms and conditions of your agreement with Hair of the Dog, which has been assigned to us. Pet Products did not have the means to fill such a large order and refused to deliver 5,000 cases. If Amalgamated brings suit, the court should hold that:
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18.  Babe was a professional baseball player who was known both for his prowess at the plate and his perceived 'heart of gold.' One day, Babe was visiting a sick boy named Jimmy in the hospital. Babe was touched by Jimmy's will to live despite a very poor prognosis. In a moment of weakness, Babe told Jimmy that in consideration of Jimmy's courage, he would do anything that Jimmy asked. Jimmy's eyes momentarily gleamed as he asked Babe to 'hit a homer for me in your next game.' Babe replied, 'Sure kid.' As Babe was leaving Jimmy's hospital room, Jimmy's father, Joe, pulled Babe aside and told Babe, 'It would mean a lot to Jimmy if you would hit a home run for him in your next game. The medicinal value of raising Jimmy's spirits would be priceless.' Babe replied, 'Hey man, we all have problems. I don't work for the Make a Wish Foundation.' Undaunted, Joe repeated that it would really raise Jimmy's spirits if Babe would hit a homer, and as incentive, Joe told Babe that he would pay Babe $5,000 if Babe did hit a home run in his next game. Babe replied, 'You've got a deal.' To raise his chances of collecting the $5,000 from Joe, Babe took extra batting practice before his next game, and the practice paid off because in his next game, Babe hit two home runs. During a post-game interview, Babe explained, 'I did it for little Jimmy, who is in the hospital.' After showering, Babe went directly to Joe's house and asked Joe for $5,000. Babe's contract with his ball club does not forbid him from accepting money from fans for good performance. If Joe refuses to pay and Babe brings an action against Joe for damages, which of the following is correct under the modern trend in contract law?
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19.  Patrick was exasperated with the smog in Big City and sent Andrew the following letter on January 1: Andrew, my family and I are moving out of here and going to live on a tropical island. Do you want to buy the stuff in our house? The price is 25000 Andrew received the letter on January 2, and on January 3 sent Patrick a letter accepting the offer. The next day Andrew changed his mind. He called Patrick and told him to forget the deal. Later that day, Patrick received the letter that Andrew had sent on January 3. Is there a contract between Patrick and Andrew?
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20.  Lehman was a limited partner in Bountiful Homes, a partnership organized by Lehman's nephew, Sanders, which purchased land, subdivided it, then constructed and sold single-family residences on the lots thus created. Sanders was the sole general partner. During the construction of the only housing development undertaken by the partnership, Lehman discovered that Sanders had taken most of the money invested by the limited partners and all of the money paid to the partnership by purchasers of the homes in the development and lost it gambling in Las Vegas. When confronted by Lehman, Sanders admitted everything, then went to his apartment and committed suicide. When news of Sanders's suicide was made public, Lehman was besieged by creditors of the partnership and by people who had purchased homes. The jurisdiction statutorily limited the liability of limited partners for debts of the partnership or acts of the general partner to the extent of their investment in the partnership, but being unaware of this, Lehman believed himself liable to all who had claims against Bountiful Homes. He told Wolcott, a single mother whose house was partly completed, that he would make good any losses caused by my nephew's actions, and then orally agreed with Smith, a contractor, to pay for the completion of Wolcott's house. Lehman also told Brubaker, an unsecured creditor of Bountiful Homes, that if Brubaker would hold off filing an involuntary bankruptcy petition against the partnership, Lehman would pay the partnership debt. In a bankruptcy action filed by secured creditors of the partnership, the assets of the partnership, which were very small, were consumed by the costs of the proceedings and no creditor received any payment. Sanders himself left no assets and was in fact heavily indebted on a personal basis due to his compulsive gambling. If Smith did not complete construction of Wolcott's house and Wolcott brings an action against him for breach of contract, which of the following would be an effective defense for Smith? I. Smith's contract was with Lehman. II. Wolcott furnished no consideration. III. Any agreement between Wolcott and Smith was discharged by novation because of the agreement between Smith and Lehman.
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21.  Ben and Sandy, brother and sister, received a $50,000 inheritance from their deceased father. By mutual agreement, they used the money to purchase a 10-acre parcel of land. Ben and Sandy took title as joint tenants. Three years after the purchase, Ben suggested to Sandy that they build an apartment house on the property. Sandy rejected this idea. Ben then asked if he could build an apartment house on his half of the property; Sandy agreed. Ben then built an apartment house on the eastern five acres of the property. Six months later, Sandy gave permission to the Boy Scouts of America to use the western half of the property as a site for weekend camping trips. Two years later, Ben died, leaving his entire estate to his son, Steven. In an appropriate action to determine the respective interests of Sandy and Steven in the property, if Sandy is adjudged to be the owner of all of the property, the most likely reason for the judgment will be that:
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22.  Sam was a famous auto racer and builder of racing cars. He and Bob signed a contract for sale of one of Sam's hand-built race cars for $25,000, the price to be paid and the car to be delivered one week later. The day after the contract was signed, Sam called Bob and told him that Sam's wife, Winnie, who had a half interest in the race car, would not go along with the sale at $25,000. Winnie would agree to a sale for $40,000. If Winnie in fact has a half interest in the racing car:
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23.  Odivia owned Homeacre, on which both a house and a garage were located. Odivia did not own an automobile, and she decided that she would turn the garage into an exercise area, including a modern sauna and spa. Odivia entered into a written agreement with contractor Eero, who agreed to do the job personally for $12,500, which included all requisite plumbing, electrical, and carpentry work. Eero was to begin work by May 14. On May 15 Eero had not yet appeared to start the job. Odivia telephoned Eero, who told her, 'I've got a big job with Developers Incorporated that's going to pay me a lot more money than that marginal project of yours, so I'm not going to work on your garage.' Over a period of several months, Odivia made many calls to local contractors, but none of them would agree to do the job for the price agreed upon by Eero. On June 3 of the following year Odivia filed suit for specific performance against Eero. Which of the following represents Eero's best argument in his defense against Odivia's suit?
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24.  Jenny, a general contractor, advertised in a trade publication that she planned to bid on the construction of a new building to be located in the Civic Mall. The advertisement welcomed bids from subcontractors to perform various functions, such as plumbing, electrical work, and masonry. The lowest electrical bid was from Ohmco, who bid $20,000. The lowest plumbing bid was from Plunger, who bid $10,000. Jenny used Ohmco's and Plunger's bids in preparing her general bid. At 2 p.m., on June 22, Jenny submitted her general bid. At 3 p.m., Plunger called her and said, 'I'm sorry, Jenny, but I made a mistake on that bid I submitted to you; I can't possibly do that plumbing work for a dime less than $12,000.' Jenny told him, 'I can't do anything about that because I've already submitted my general bid.' Jenny was awarded the contract. Assume for purposes of this question only that after receiving the contract, Jenny hired Flusher to do the plumbing work on the building at a cost of $12,000. She now sues Plunger for damages. Jenny is entitled to recover:
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25.  Via a circular, WidgeCo, a manufacturer of widgets, sent an offer to Distrucorp, a major wholesaler. WidgeCo offered a standard lot (quantity well-known in the widget trade) of widgets for $8,000. This was a good price, and the president of Distrucorp personally mailed back to WidgeCo Distrucorp's standard printed acceptance form. However, the president wrote in large letters in his own hand on the form, 'Our liability on this contract is limited to $200.' Two days later, the WidgeCo sales manager received the communication from Distrucorp. A week later, WidgeCo had sent no additional communication to Distrucorp. Assuming no additional facts, what is the relationship between the parties?
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26.  When Esther, Gray's 21-year-old daughter, finished college, Gray handed her a signed memorandum stating that if she would go to law school for three academic years, he would pay her tuition, room, and board, and would 'give her a $1,000 bonus' for each 'A' she got in law school. Esther's uncle, Miller, who was present on this occasion, read the memorandum and thereupon said to Esther, 'and if he doesn't pay your expenses, I will.' Gray paid her tuition, room, and board for her first year but died just before the end of that year. Subsequently, Esther learned that she had received two 'As' in the second semester. The executor of Gray's estate has refused to pay her anything for the two 'As' and has told her that the estate will no longer pay her tuition, room, and board in law school. In an action by Esther against Miller on account of the executor's repudiation of Gray's promise to pay future tuition, room, and board, which of the following would be Miller's strongest defense?
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27.  Upon graduation from high school, Nephew could not decide whether he wanted to go on to college or start working for a living. Uncle told Nephew that if Nephew would attend college, Uncle would pay his tuition and expenses for the full year, and that Uncle would pay him a $1,000 bonus for each 'A' Nephew earned as a final grade in a class. Nephew told Uncle that he would attend college. The next day, Grandfather called Nephew and told him that he had learned of the offer that Uncle had made him and that if Uncle failed to pay Nephew as promised he (Grandfather) would. Nephew attended college and earned 'A's as final grades in three classes. Shortly thereafter, Uncle died, and the executor of Uncle's estate refused to pay Nephew the bonus for each of the three 'A's.Nephew will be unsuccessful in trying to enforce Grandfather's promise because:
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C.
D.
28.  Popeye owned a large fleet of buses. He was fortunate enough to have won the contract to bus all the schoolchildren in a large midwestern city and most of its surrounding suburbs. He purchased a number of new vehicles to expand his fleet. Popeye had farmed out the maintenance of the buses to a number of different repair shops, but he now desired the consistent results obtainable from dealing with one repair and maintenance operation. He therefore contracted in writing with Bluto that all general maintenance and extraordinary repairs required for Popeye's buses would be performed by Bluto, who owned and operated 'Bluto's Bus and Truck Center.' A schedule of fees for most standard repairs was included in the contract. It happened that Popeye's wife, Olive, owned and operated a small advertising agency. Popeye wanted Olive's business to succeed, and so he included a clause in his agreement with Bluto that Bluto would place all his ads for his repair shop through Olive's agency during the oneyear term of the agreement. Assume for purposes of this question only that for six months Bluto dutifully placed all his ads through Olive's agency and informed her of his agreement with Popeye. During that time, Olive turned down work from two prospective clients because of the time that she would have to devote to designing and disseminating ads from Bluto. Bluto then discovered that Popeye was having some of his buses repaired and maintained by other shops. Bluto immediately ceased placing ads through Olive and employed another agency. Can Olive successfully bring suit against Bluto to enforce the agreement?
A.
B.
C.
D.
29.  Warden, a wholesaler, sold quality shoes to retailers in a six-state region. Warden ordered 1,000 pairs of shoes from Michael, a shoe manufacturer. The shoes cost $50 per pair, so the total contract price was $50,000. It happened that Michael owed $50,000 to Tyree, a supplier of leather. Michael assigned, in writing, 'all proceeds from the contract with Warden' to Tyree. Michael notified Warden that he had assigned the proceeds of the contract to Tyree and then shipped the 1,000 pairs of shoes to Warden. Upon receipt of the shoes, Warden discovered that 10% of the shoes were defective. He sent a check for 90% of the contract price ($45,000) to Michael. Michael deposited the check. Realizing that the business was in deep trouble, Michael withdrew all funds from his bank account and took off for a country with which the United States has no extradition treaty. Tyree demands payment from Warden. Assume for purposes of this question only that there was no agreement with Tyree, and that Michael neither deposits the check nor departs for a foreign country. Has Warden made a proper rejection?
A.
B.
C.
D.
30.  Owner and Builder executed a contract providing that Builder was to construct a residence on a specified location according to plans and specifications drawn up by Architect. The total contract price was $500,000. The lot on which the residence was to be built was located on the seashore in Palm Beach, Florida and there was an existing woodframe structure that had to be demolished before the residence could be built. Owner contracted with Designer to furnish the interior of the residence after Builder completed construction, but no date was included in either contract for completion of the home. The contract between Owner and Builder stated that construction would begin within two weeks after the existing structure was demolished and the rubble removed from the lot. The contract between Owner and Builder was signed November 12, and the contract between Owner and Designer was signed November 11. Assume for the purposes of this question only that the day after the preexisting structure is demolished and the rubble removed, a severe storm causes gigantic waves that erode the seashore so that Owner's lot is now under water. Must Builder still perform the contract?
A.
B.
C.
D.
31.  Induscorp was a manufacturer of machine tools. Barney, a factory owner, telephoned Induscorp's order department and placed an order for two of Induscorp's standard 'Type-A' machines. Barney and Induscorp came to an oral agreement whereby the total price for both machines was agreed to be $10,000. The first machine was to be delivered on May 1, with payment of $5,000 due 30 days after delivery, and the second machine was to be delivered on June 1 on the same terms (payment of $5,000 due 30 days after delivery). Although Induscorp did not carry the machine in stock, no retooling was required because the Type-A machine was a standard model. The first machine was duly delivered on May 1. The second machine arrived on June 1, but Barney refused to accept delivery and also refused to pay for the first machine. Assume that it cost Induscorp $3,000 to manufacture each Type-A machine, and that Induscorp could resell the machine for only $3,000. If Induscorp sues Barney on June 2, what damages should be awarded aside from any incidental damages?
A.
B.
C.
D.
32.  Tarbel, a contractor, entered into a contract with Denhart College to remodel a residence hall during the summer. As specified by the contract, the work had to be completed before the fall semester began at the beginning of September. Because Tarbel received a great deal of other maintenance business from the college, his price of $400,000 was significantly lower than other contractors and he was not going to demand payment until the work was completed. By the end of the first week in August, Tarbel had completed 75% of the project and had expended $350,000 in labor and materials. At that time, however, a labor dispute between Tarbel and his employees prompted most of the workers to walk off the job. Because prospects for a quick settlement of the dispute were doubtful, Tarbel informed the college that he would not be able to meet the completion deadline. A week later, the college obtained another contractor who was able to finish the project by the end of August. The college paid him $150,000, which included a substantial amount of overtime for his workers. The increase in value of the residence hall due to the remodeling was $425,000. Tarbel, who had not been paid, files suit against Denhart College, which files a counterclaim against Tarbel. What should the ultimate recovery be in this action? (
A.
B.
C.
D.
33.  Yott was a wealthy sportsman and sailing enthusiast. He purchased a large old wooden sailing ship for $200,000. Although the boat was a classic, Yott wanted the vessel to be modernized and made more comfortable. Yott entered into a written contract with Salty, a marine architect and engineer. Under the terms of the contract, Yott agreed to pay Salty $7,500, and Salty agreed to draw up the modernization plans and to be the contractor for the modernization of the ship. Assume for purposes of this question only that at the time Yott and Salty entered into the agreement, Yott told Salty orally, 'Of course, your modernization plan is subject to the approval of my sister, Marina. Although I'm sure she'll like any design of yours, we've got no deal unless your plans meet with her approval.' Salty agreed to this. Salty finished his drawings and submitted them to Yott, who was enthusiastic about Salty's designs. Marina, a famous yachtswoman, was engaged in a trans-Pacific yacht race at the time and was not expected home for a number of weeks. Cheered by Yott's enthusiasm, Salty went ahead and modernized the ship according to his designs. When Salty finished the work, he submitted a bill to Yott. Yott refused to pay, pointing out that Marina had never approved the designs. If Salty sues Yott, which of the following issues of contract law is most likely to be decisive in determining the outcome of the case?
A.
B.
C.
D.
34.  After his widowed father's death, Son undertook the task of cleaning out Father's condominium and preparing it for resale. After removing valuables and sentimental objects and packing up clothes and other household items that were in good enough shape to donate to charity, Son called Ye Olde Purveyor of Junk ('Purveyor') to remove everything else. Son entered into a written agreement with the company to completely empty out the condo and wash the walls, floors, and appliances. The parties agreed on a contract price of $1,500. Shortly after beginning performance, Purveyor assigned to Munson its right to all monies due under the contract (i.e., $1,500), and Munson promptly notified Son of the assignment and Son acknowledged the same. Purveyor continued working, completely emptying out the condo and washing the walls, floors, and all of the appliances except for the oven before quitting the job. It would cost $150 to hire a substitute to clean the oven. If Munson sues Son, Munson would be entitled to recover: (A)(B) (C)(D)
A.
B.
C.
D.
35.  Shortly after a series of rapes took place within Big City, the city council of Big City approved the offering of a $25,000 reward for the arrest and conviction of anyone guilty of the rapes. Information concerning the reward was broadcast by Big City's sole radio station once daily for one week. Shortly thereafter, Karen, a victim of one of the rape attacks, hired Stevens, a private detective, to find the person responsible for perpetrating the rapes. Karen had agreed to pay Stevens $100 per each day spent investigating the rapes. The next year, the city council of Big City passed a resolution repealing its reward offer. The city council caused this resolution to be telecast once daily for a week over Big City's local television station, the local radio station, meanwhile, having ceased operations. One month later, Philip voluntarily confessed to Stevens to having committed all of the earlier rapes. Philip was arrested and ultimately convicted of all the rapes. Karen thereupon paid Stevens at the agreed-on rate and suggested also that Stevens claim the city's $25,000 reward, of which Stevens had been previously unaware. Stevens immediately made the claim. The city refused to pay Stevens anything, although he swears that he never heard of the city's repeal of the reward offer before claiming the reward. Assume that Big City has no immunity to suit. In which of the following ways could Big City's reward offer be effectively accepted?
A.
B.
C.
D.
36.  Winston went to Rudder, a boatbuilder, and told Rudder that he wanted a yacht built to his specifications. They agreed that the price would be $400,000, and that Winston was to make payment in full within 30 days after Winston had accepted delivery of the yacht. They further agreed that Rudder would not subcontract any of the work. Rudder, however, contacted Genoa, a master sailmaker, and subcontracted the sails for the yacht to Genoa. They agreed orally that Rudder would pay Genoa $25,000 for the sails within 20 days of receiving them. Rudder did not tell Genoa of his agreement with Winston regarding subcontracting. Genoa made the sails and delivered them to Rudder, who then completed the yacht and delivered the boat to Winston. Although the yacht was built to his specifications, he refused to accept it after he learned that Rudder had subcontracted for the sails. When the 20-day payment period for the sails had expired, Genoa went to Rudder and demanded the $25,000. Rudder told Genoa that he could not pay the $25,000 unless Winston paid for the yacht. If Genoa decides to sue, is there an enforceable contract between Rudder and Genoa?
A.
B.
C.
D.
37.  Indegas wanted to ensure that it had sufficient stocks of gasoline and oil for its independent dealerships; it therefore entered into contracts with various refineries to purchase the gasoline they produced. One such agreement was with Cal-Tex, whereby Indegas was given the right to purchase all gasoline refined by Cal-Tex for the next five years at a price set at 95% of the domestic market price at the time of delivery. Indegas agreed to purchase no less than 5,000 gallons a week and to use its own tankers to transport the gasoline from Cal-Tex's refinery to its storage facilities. At the time this contract was signed, Indegas gave written notice to Cal- Tex that it intended to buy all gasoline produced by Cal-Tex until further notice. For the first year, Indegas continued to purchase all gasoline produced by Cal-Tex. However, at the end of that year Cal-Tex purchased an out-of-state refinery that refined all its gasoline from domestic shale oil. As a result of this merger and of more efficient plant methods, Cal- Tex doubled its production of gasoline by the next year. At a meeting between Cal-Tex and Indegas, Cal-Tex's president noted that Indegas was getting as much gasoline as it needed, and that Cal-Tex intended to sell the extra gasoline it was producing on foreign markets at a higher price than Indegas was paying. Indegas agreed with this proposal and signed an addendum to the original agreement reflecting this change. Thereafter, Indegas continued to purchase one-half Cal-Tex's total capacity until the following year when, as a result of a foreign oil boycott, Cal-Tex was unable to purchase sufficient foreign oil to operate profitably its local refinery. Cal-Tex, by letter, notified Indegas that it could no longer deliver gasoline to it in accordance with their agreement. Nevertheless, Cal-Tex's other refinery was able to increase its production by 25% and continue to sell to foreign markets. Assume that the oil boycott ended, but that Cal-Tex sold both its refineries to a large oil company. What is the effect of this sale on Cal-Tex's obligation to Indegas?
A.
B.
C.
D.
38.  On July 1, Sam offered to sell Durham, his prize bull, to Bill for $15,000. In return for $100 which Bill paid Sam, Sam handed to Bill a signed written statement that recited the offer and stated that Sam promised not to revoke for a period of 30 days. Both Bill and Sam are cattle ranchers. On July 10, Bill wrote Sam as follows: 'I cannot pay more than $12,500 for Durham. If you cannot accept this amount, I will not be able to go through with the deal.' Bill did not know that Sam had already sold Durham to another party on July 9. On July 27, Bill wrote Sam: 'I accept your offer to sell Durham. Enclosed is my check for $15,000.' Sam received Bill's letter of July 27 on July 29. Assume Bill's letter of July 10 had read: I have decided to take Durham. A check for $15,000 is enclosed. I am leaving for Canada for six months and will pick up Durham on January 1. I will pay you for his board and care. Bill's letter is: (A) (B)(C) (D)
A.
B.
C.
D.
39.  Cordero owned a beautiful home entertainment center, which included a large-screen television. Cordero worked very hard at two jobs, so he had little opportunity to enjoy the entertainment system. Cordero's friend, Tina, wanted an entertainment system so that she could watch her favorite daytime soap operas. She importuned Cordero, and he finally agreed to sell her his home entertainment system for $2,500. Tina made a downpayment of $700 and took possession of the entertainment system. She agreed to pay the balance due to Cordero in 18 equal $100 installments, beginning on June 5, with subsequent installments due on the fifth of each month until the balance was paid in full. Gabrielle owed Tina $2,000. On May 20, Tina entered into an oral agreement with Gabrielle whereby Gabrielle agreed to make the 18 $100 installment payments to Cordero. In exchange for this, Tina promised to forgive Gabrielle's $2,000 debt to her. On June 7, Cordero called Tina and asked where his first $100 installment payment was. At that time Tina told Cordero of her agreement with Gabrielle. Gabrielle has made none of the installment payments. Does Cordero have a right to recover the debt from Tina?
A.
B.
C.
D.
40.  Mary's doctor informed her that she had a rare blood disease that was almost always fatal. He further informed her that there was no treatment known to medical science for this disease. Out of desperation, Mary consulted Quack, who claimed to have a cure for the blood disease. Mary entered into an agreement with Quack under which Quack promised to treat Mary for the blood disease. However, no price was given for the treatment. After two months of treatment, Mary did not appear to have improved at all. Mary's father, Stu, went to see Quack and told Quack that if Quack would cure Mary of the blood disease, Stu would pay Quack $25,000. Four months later, after weekly sessions with Quack, Mary again went to see her doctor. This time her doctor told her that she appeared to have recovered completely from the blood disease, because all tests for the disease proved negative; and that, in his opinion, she was completely cured. Assume for the purposes of this question only that Mary refused to pay Quack anything. Quack brings suit against Mary for services rendered. Quack will:
A.
B.
C.
D.
41.  Claw died, leaving his nephew Scratch as his sole heir. Among the items inherited by Scratch were some old oil paintings that had been stored in Claw's attic for a number of years. Scratch knew nothing about art and had no place to put them in his home. He placed an ad in the paper offering to sell the paintings 'at a price to be mutually agreed upon.' Fang, a buyer for an art gallery, responded to the ad and examined the paintings. From the signature and the style, Fang recognized that the artist was William Hamilton, a renowned 19th century American portrait artist. Scratch and Fang agreed upon a price and executed a contract. Which of the following facts, if true, would give Fang the best basis for rescinding the contract with Scratch? (A) (B) (C)(D)
A.
B.
C.
D.
42.  Mary had a small shop where she sold her own jewelry creations. She was commissioned by a lovestruck young man, Willie Darcy, to design and create a set of rings(engagement and wedding) for Willie's beloved, Elizabeth. Mary designed and created the rings in 18k gold, leaving room in the engagement ring for a large marquise-shaped diamond. She then entered into an oral agreement with Hanson, a well-known gemologist, to provide the diamond, for which Mary would pay Hanson $20,000. Mary's agreement with Hanson was that she would pay him when Willie paid her. Hanson took much care in finding a suitable gemstone, cutting the diamond to show off its brilliance, and otherwise preparing it per Mary's specifications. Hanson delivered the diamond to Mary, who accepted it with praise. Hanson waited to be paid, and when he was not, he contacted Mary, but she refused to pay him, arguing that their agreement was unenforceable and, anyway, Willie has not paid her. If Hanson sues Mary, how much can he recover?
A.
B.
C.
D.
43.  Johnston purchased 100 bolts of standard blue wool, No. 1 quality, from McHugh. The sales contract provided that Johnston would make payment prior to inspection. The 100 bolts were shipped and Johnston paid McHugh. Upon inspection, however, Johnston discovered that the wool was No. 2 quality. Johnston thereupon tendered back the wool to McHugh and demanded return of his payment. McHugh refused on the ground that there is no difference between No. 1 quality wool and No. 2 quality wool. What is Johnston's remedy because the wool was nonconforming?
A.
B.
C.
D.
44.  On March 5, Triton Machine Works mailed the following signed communication to Banfield Machine Tools: 'We hereby offer to sell you 500 diamond core drill bits, priced at $300 each. This is a firm offer.' This offer was received by Banfield Machine Tools on March 7. On March 8, Triton mailed a notice to Banfield stating: Please be advised that our offer of March 5 is revoked. This notice of revocation was received by Banfield on March 10. On March 11, Banfield wired Triton: 'Consider you bound by your offer. Please enter our order as per your offer for 10 diamond core drill bits. Box two per case, hardwood casing only. Our draft for $3,000 has been sent under separate cover.' If Triton defends on the ground that its offer was for the sale of 500 diamond core drill bits in one lot only, rather than in small quantities (here, only 10 bits ordered by Banfield), the court should hold: (A) (B) (C) (D) .
A.
B.
C.
D.
45.  Martha needed a new pair of shoes. She went to her local Skysheim shop and told the salesperson that she worked in the city's downtown area and had to walk eight blocks to get from her house to her commuter train and then six blocks from her train to her office. During the workday, she had to climb up and down stairs several times. She wanted shoes that were suitable for walking on concrete, had gripping power for stairs, and were comfortable. The salesperson went into his stockroom and brought out four different styles of Skysheim's 'Clouds,' reputably the most comfortable shoe on the market, designed for the type of use that Martha had in mind. Martha tried on each of the four pairs but did not like the way any of them looked. While walking around the store, however, Martha saw a shoe she did like --- 'Hobblers',' Skysheim's high-fashion shoe. She told the salesperson to bring her a pair to try. He did so and explained to Martha that Hobblers were completely made of the finest leather and would probably last for years. Martha tried on the shoes and told the salesperson that she would take them. Assume for this question only that Martha paid for the shoes and walked out of the store. A few moments later, she sat down to look at her new shoes in the sunlight. On close inspection, she noticed a small nick in the leather of one of the shoes. She immediately went back to Skysheim and demanded a refund. The salesperson refused. If Martha sues for a refund, who will prevail?
A.
B.
C.
D.
46.  On March 5, Triton Machine Works mailed the following signed communication to Banfield Machine Tools: 'We hereby offer to sell you 500 diamond core drill bits, priced at $300 each. This is a firm offer.' This offer was received by Banfield Machine Tools on March 7. On March 8, Triton mailed a notice to Banfield stating: Please be advised that our offer of March 5 is revoked. This notice of revocation was received by Banfield on March 10. On March 11, Banfield wired Triton: 'Consider you bound by your offer. Please enter our order as per your offer for 10 diamond core drill bits. Box two per case, hardwood casing only. Our draft for $3,000 has been sent under separate cover.' If the court were to conclude that a contract came into existence between Triton and Banfield on the strength of Triton's letter of March 5, and Banfield's reply of March 11, its terms would include: (A) (B) (C)(D)
A.
B.
C.
D.
47.  On April 1, Stan, a law student, agreed to sell his prized possession|an antique dictionary| to Betsy for $1,500, so that he could pay for his bar review course. Because Stan did not have to pay for his course until April 30, the written contract between Stan and Betsy provided that the dictionary would not be delivered to Betsy until April 20, thus giving Stan a last few extra days to peruse the dictionary's pages. Late on April 15, a terrible fire swept through Stan's apartment building and the dictionary was destroyed. Firefighters determined that the blaze started when Hugh, the tenant living below Stan, fell asleep while doing his taxes and dropped his cigarette onto his paperwork. Fortunately for Stan, he had insurance that covered all of his damages, including compensation for the destroyed dictionary. On April 20, Stan told Betsy of the fire, but still demanded payment, claiming that Betsy was the equitable owner of the dictionary when it was destroyed, and explaining that she could have obtained insurance on the dictionary had she wanted to, since she had an insurable interest in the dictionary as soon as the contract was made. Betsy refused to pay. Stan brings an action against Betsy for the $1,500. Who will prevail?
A.
B.
C.
D.
48.  Retailer entered into a written contract with Wholesaler whereby Wholesaler agreed to sell and Retailer agreed to buy 100 boxes of 'Red Star' sunglasses, manufactured by Redblok Corporation. The agreed-upon price was $75 per box. Two weeks before the specified delivery date, Wholesaler notified Retailer, 'Because of unexpected high demand for sunglasses this season, we will be unable to fill your order.' Although Retailer learned that the needed quantity of 'Red Star' sunglasses could be shipped within two days for $83 per box from a supplier in another area, Retailer instead purchased 100 boxes of 'Red Seal' sunglasses locally at a cost of $90 per box. The 'Red Seal' glasses were also manufactured by Redblok Corporation but were of a slightly higher quality than the 'Red Star' model. A few days before the original delivery date, Wholesaler notified Retailer that it would fill the order, and tendered 100 boxes of 'Red Star' sunglasses on the date of delivery. However, Retailer refused to accept them. At that time, the wholesale market price of 'Red Star' sunglasses had declined to $80 per box. If Retailer sues Wholesaler for damages based on Wholesaler's alleged breach, Retailer is likely to recover:
A.
B.
C.
D.
49.  Ann leased commercial property to Brenda for a period of 10 years. The lease contained the following provision: 'No subleasing or assignment will be permitted unless with the written consent of the lessor.' One year later, Brenda assigned all interest in the lease to Carolyn, who assumed and agreed to perform the lessee's obligations under the terms of the lease. Ann learned of the assignment and wrote to Brenda that she had no objection to the assignment to Carolyn and agreed to accept rent from Carolyn instead of Brenda. Thereafter, Carolyn paid rent to Ann for a period of five years. Carolyn then defaulted and went into bankruptcy. In an appropriate action, Ann sued Brenda for rent due. If Ann loses, it will be because there was:
A.
B.
C.
D.
50.  Indegas wanted to ensure that it had sufficient stocks of gasoline and oil for its independent dealerships; it therefore entered into contracts with various refineries to purchase the gasoline they produced. One such agreement was with Cal-Tex, whereby Indegas was given the right to purchase all gasoline refined by Cal-Tex for the next five years at a price set at 95% of the domestic market price at the time of delivery. Indegas agreed to purchase no less than 5,000 gallons a week and to use its own tankers to transport the gasoline from Cal-Tex's refinery to its storage facilities. At the time this contract was signed, Indegas gave written notice to Cal- Tex that it intended to buy all gasoline produced by Cal-Tex until further notice. For the first year, Indegas continued to purchase all gasoline produced by Cal-Tex. However, at the end of that year Cal-Tex purchased an out-of-state refinery that refined all its gasoline from domestic shale oil. As a result of this merger and of more efficient plant methods, Cal- Tex doubled its production of gasoline by the next year. At a meeting between Cal-Tex and Indegas, Cal-Tex's president noted that Indegas was getting as much gasoline as it needed, and that Cal-Tex intended to sell the extra gasoline it was producing on foreign markets at a higher price than Indegas was paying. Indegas agreed with this proposal and signed an addendum to the original agreement reflecting this change. Thereafter, Indegas continued to purchase one-half Cal-Tex's total capacity until the following year when, as a result of a foreign oil boycott, Cal-Tex was unable to purchase sufficient foreign oil to operate profitably its local refinery. Cal-Tex, by letter, notified Indegas that it could no longer deliver gasoline to it in accordance with their agreement. Nevertheless, Cal-Tex's other refinery was able to increase its production by 25% and continue to sell to foreign markets. Assuming that Indegas had an enforceable agreement, the modification of this contract made by the addendum was:
A.
B.
C.
D.
51.  Ace Business Supplies sold office equipment and supplies to various companies in the area. Ace entered into a written agreement with Typitrite, Inc. to purchase from Typitrite all of Ace's monthly requirements of printers for a period of five years at a specified unit price. The agreement also provided that: 1. The parties covenant not to assign this contract. 2. Payments coming due hereunder for the first six months shall be made directly by Ace Business Supply to Commercial Bank, a creditor of Typitrite, Inc. Shortly thereafter, Typitrite, Inc. made an assignment of the contract to Equitable Loan Co., as security for a $50,000 loan. Ace Business Supplies subsequently ordered the delivery of and paid Typitrite the agreed price of $10,000 for Ace's requirement of printers for the first month of the agreement. Which of the following accurately states the legal effect of the covenant not to assign the contract?
A.
B.
C.
D.
52.  Pearly had neglected her teeth for a long period of time, but she finally decided to attend to her dental health. She went to Boris, a highly reputable dentist, to have her teeth cleaned and to determine the course of dental work she needed. Boris honestly told her that she needed a lot of dental work, some of it involving complex procedures. When she asked Boris what the cost would be, Boris told her 'about $3,500.' Pearly agreed to use Boris as her dentist and he began her treatment. During the course of that treatment, Boris determined that he would use 'precious' metal material instead of the 'semi-precious' metal that he had planned to use for Pearly's inlays. Boris had sound medical reasons for his decision. When Pearly's treatment was finished, Boris sent her a bill for $4,100. An angry Pearly demanded to know why the bill was more than $3,500. Boris explained to Pearly that the higher bill was because more expensive inlays were used, and he carefully documented the cost of his materials. Pearly honestly believed that it was unfair for Boris to charge her $4,100. Therefore, she sent Boris's invoice back to him, along with a check for $3,500. On the check Pearly had clearly written 'Payment In Full.' Boris read the notation on the check. He then went to his own bank and deposited the check. Boris made no notation of his own on the check other than his signature on the back as an indorsement. Two weeks later Boris called his bank to make sure that Pearly's check had cleared. He then immediately filed suit against Pearly for $600. Will the court award Boris $600? 
A.
B.
C.
D.
53.  Carver is a chemical engineer. She has no interest in or connection with Chemco. Carver noticed that Chemco's most recent publicly issued financial statement listed, as part of Chemco's assets, a large inventory of a certain special chemical compound. This asset was listed at a cost of $100,000, but Carver knew that the ingredients of the compound were in short supply and that the current market value of the inventory was in excess of $1 million. There was no current public quotation of the price of Chemco stock. The book value of Chemco stock, according to the statement, was $5 per share; its actual value was $30 per share. Knowing these facts, Carver offered to purchase from Page at $6 per share the 1,000 shares of Chemco stock owned by Page. Page and Carver had not previously met. Page sold the stock to Carver for $6 per share. If Page asserts a claim based on misrepresentation against Carver, will Page prevail? 
A.
B.
C.
D.
54.  Osif owned Broadacres in fee simple. For a consideration of $5,000, Osif gave Bard a written option to purchase Broadacres for $300,000. The option was assignable. For a consideration of $10,000, Bard subsequently gave an option to Cutter to purchase Broadacres for $325,000. Cutter exercised his option. Bard thereupon exercised his option. Bard paid the agreed price of $300,000, and took title to Broadacres by deed from Osif. Thereafter, Cutter refused to consummate his purchase. Bard brought an appropriate action against Cutter for specific performance, or, if that should be denied, then for damages. Cutter counterclaimed for return of the $10,000. In this action, the court will:
A.
B.
C.
D.
55.  Tella Vishun purchased a large tract of land outside of Dullsville. She successfully applied to the Federal Communications Commission for a license to operate a television station. She Biddlebaum was a deacon at Community Church. Among the tasks assigned Biddlebaum by the pastor was leadership of the church young adults group. In addition to Bible lessons and matters directly related to faith and belief, the group had various charitable and 'fun' activities that were planned and directed by Biddlebaum. Biddlebaum firmly believed that the greatest curse on American society was drugs, among which he included alcohol and tobacco. One afternoon Biddlebaum saw Wing, a member of his church group, walking down the street with a white cylinder in her mouth. He assumed that Wing was smoking a cigarette. In fact, Wing was enjoying a piece of candy manufactured to look like a cigarette. Wing was vehemently antismoking. She had never smoked a cigarette in her life and frequently chided her friends who had taken up the habit. However, Biddlebaum wished to encourage abstinence from drugs and was concerned about Wing based upon what he had seen her doing on the street. On Friday afternoon, the bus was about to depart for a weekend 'Campout' involving Biddlebaum's young adults group and similar groups from neighboring churches. At that time, Biddlebaum told Wing, 'I'll give you $50 if you don't smoke a single cigarette during the whole Campout Weekend.' Wing agreed to this. Wing, of course, did not smoke during the Campout Weekend. On Sunday evening Biddlebaum told Parishioner how he had helped turn the course of a young person in the right direction through his stratagem with Wing. Parishioner correctly informed Biddlebaum that Wing never smoked cigarettes. Biddlebaum now refuses to pay Wing $50. Is Biddlebaum legally obligated to pay Wing $50?
A.
B.
C.
D.
56.  Shelley and Herman decided to get married. Both were in their final year of high school; Shelley was one month short of her 18th birthday, and Herman was 19. They went to a local jeweler and looked at gold wedding bands, but saw nothing that appealed to them. When they discovered that the jeweler was himself a goldsmith and could make rings to order, they described what they were interested in and signed a purchase order for two rings; a woman's band for $500 and a man's for $650. Three weeks later, the jeweler called Shelley and informed her that the rings were ready. In the meantime, she and Herman had broken up and Herman had enlisted in the Marines and been sent to another state for training. The day after her 18th birthday, Shelley went to the jeweler and told him that they would not be needing the rings. When he protested that they were custom-made and would probably not sell to anyone else, Shelley said, 'All right, I've got $400 in my savings account. I'll take my ring, but you'll have to find Herman about the other one.' The jeweler had Shelley sign another purchase order for the woman's band at $400, payment to be made by the end of the month. When the jeweler did not hear from Shelley after another month, he brought an action for breach of contract against her. Evidence produced at trial established that the market value of the rings was $500 and $650 for the woman's and man's, respectively, and that the age of majority in the jurisdiction was 18. Is the jeweler entitled to recover against Shelley?
A.
B.
C.
D.
57.  Suri entered into a valid written contract with Builder to construct a large yoga studio on some land she owned outside of town. Suri agreed to pay Builder $150,000 upon completion of the job. As work progressed, and due to substantial increased building costs, Suri and Builder orally agreed that Builder may omit installation of the koi pond planned for the atrium (saving Builder $1,000), and that the contract price would be reduced to $149,500. Builder completed the job (minus the koi pond) in reliance thereon. Most courts would hold that this subsequent oral agreement is:
A.
B.
C.
D.
58.  Sam Starr, a detective, recently retired from the St. Paul, Minnesota, Police Department. Starr had been instrumental in solving many important crimes committed in the Twin Cities area and had received many commendations from his own police superiors, the Mayor of St. Paul, and national police associations. A year after Starr's retirement to Florida, he turned on his television set and Zeta Broadcasting System ('ZBS') was presenting a docu-drama entitled To Nab a Crook. At the beginning of the show, Starr saw among the credits, 'This story is based upon the life of Detective Sam Starr of the St. Paul, Minnesota, Police Department; however, this is a dramatization and in order to enhance the dramatic effect of the show as entertainment, not every event depicted in this show actually happened as portrayed by the professional actors in the show.' Once the show was over, Starr was furious. Some parts of the show dealt fairly accurately with some of the crimes Starr had helped solve in Minnesota, but other parts, under the rubric of 'enhancing the dramatic effect,' portrayed 'Detective Pat Smith' (the Starr-like character) as being involved in several James Bond-type sexual escapades. If Starr sues ZBS for invasion of privacy, who will prevail?
A.
B.
C.
D.
59.  Fat Goose Foods ('FGF') was a manufacturer of quality pates and terrines made from imported goose livers and truffles. In a written agreement between FGF and Gourmet Mart ('GM'), a retail seller of fine quality foods, FGF agreed to 'sell all output of Fat Goose Foods liver pate to Gourmet Mart,' and GM agreed to 'sell Fat Goose Foods pates exclusively.' The agreement went on to state that GM would pay $150 for each 10-loaf container of pates ordered from FGF. The agreement between GM and FGF also contained the statement, either party may cancel this contract after two months upon giving reasonable notice to the other party. Assume that, after FGF faithfully filled GM's orders for six months, FGF determined that it was becoming too costly to operate the special oven used to roast the pate loaves. The oven had been manufactured in Belgium in 1937, but the plant that manufactured the oven was destroyed by bombing during World War II, and no more of the ovens were produced after 1940. It would be difficult and expensive to find a suitable substitute, and when the oven malfunctioned, replacement parts were extremely difficult to find and very costly as well. FGF, therefore, decided to get out of the pate business entirely and to use its supply of goose livers to make a German-style liver sausage. FGF notified GM of its decision and the reasons for it, and shortly thereafter stopped shipping pate to GM. GM sued FGF, demanding that FGF continue to ship pate to GM or pay monetary damages to GM. Will GM prevail?
A.
B.
C.
D.
60.  Pontecorvo, a wealthy art collector, visited the gallery and studio of Dal Vidor-Holly. Pontecorvo admired one of Vidor-Holly's paintings, which was titled 'Mother's Whistler.' Vidor-Holly told Pontecorvo on August 31 that Pontecorvo could have the painting for $30,000. Although Pontecorvo liked the painting and thought Vidor-Holly had promise, Pontecorvo was not sure he wanted to buy it. Therefore, Pontecorvo entered into a written agreement with Vidor-Holly whereby Vidor-Holly agreed to keep his offer to sell the painting to Pontecorvo at $30,000 open for 30 days. Pontecorvo paid Vidor-Holly $500 for this, and the terms of the agreement provided that the offer would expire at 11:59 p.m. on September 30 if Pontecorvo failed to accept by that time. On September 20, Pontecorvo telephoned Vidor-Holly and told him, 'The more I think about it the less I think that 'Mother's Whistler' is what I want.' Vidor-Holly responded, 'That's your decision to make, Mr. Pontecorvo.' On September 26, art collector Trista visited Vidor-Holly's gallery and offered Vidor-Holly $35,000 for 'Mother's Whistler.' On September 27, Vidor-Holly mailed a $50 check to Pontecorvo, with a letter stating, 'I am hereby terminating my offer to you regarding the painting 'Mother's Whistler' and I am refunding 10% of the money you paid me to keep the offer open.' The artist mailed his letter at 11:59 p.m. on the 27th. Pontecorvo received the letter at 11:30 A. m. on September 29. On September 28, at 9:30 A. m., Pontecorvo mailed a letter to Vidor-Holly, stating, 'I've decided to purchase 'Mother's Whistler' from you. Find enclosed my certified check in the amount of $30,000.' Two hours later, Vidor- Holly sold the painting to Trista. Vidor-Holly received the letter on October 1 and immediately mailed the check back to Pontecorvo. Can Pontecorvo maintain a successful legal action against Vidor-Holly?
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B.
C.
D.
61.  Sole Man, Inc., a manufacturer of athletic shoes, entered into a written contract with Jansen Shoe Store, in the city of Mountain View, to carry Sole Man shoes. The contract went into effect on April 5 and included a provision that read, '5% of the proceeds attributable to the sale of Sole Man shoes by Jansen Shoe Store during the month of February(American Heart Month) each year will be donated to Mountain View Hospital's new cardiovascular wing.' This clause was prompted by the parties' mutual desire to promote good health and, not incidentally, to sell more shoes during a typically slow winter month by publicizing the arrangement. Before February 1 of the first year of the contract, Sole Man and Jansen became disillusioned with Mountain View Hospital and entered into a subsequent written agreement to eliminate the provision for payments to the hospital's cardiovascular wing. What effect would this subsequent agreement have on Hospital's right to institute an action for the lost proceeds (assuming that it otherwise had standing to collect the same)?
A.
B.
C.
D.
62.  Jenny, a general contractor, advertised in a trade publication that she planned to bid on the construction of a new building to be located in the Civic Mall. The advertisement welcomed bids from subcontractors to perform various functions, such as plumbing, electrical work, and masonry. The lowest electrical bid was from Ohmco, who bid $20,000. The lowest plumbing bid was from Plunger, who bid $10,000. Jenny used Ohmco's and Plunger's bids in preparing her general bid. At 2 p.m., on June 22, Jenny submitted her general bid. At 3 p.m., Plunger called her and said, 'I'm sorry, Jenny, but I made a mistake on that bid I submitted to you; I can't possibly do that plumbing work for a dime less than $12,000.' Jenny told him, 'I can't do anything about that because I've already submitted my general bid.' Jenny was awarded the contract. Assume for purposes of this question only that Jenny used Ohmco's $20,000 electrical bid to prepare her general bid, but, after Jenny was awarded the contract, she decided to hire subcontractor Wattco to perform the electrical work. Wattco had bid $21,500. Ohmco sues Jenny for damages. Will Ohmco prevail?
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B.
C.
D.
63.  Cordero owned a beautiful home entertainment center, which included a large-screen television. Cordero worked very hard at two jobs, so he had little opportunity to enjoy the entertainment system. Cordero's friend, Tina, wanted an entertainment system so that she could watch her favorite daytime soap operas. She importuned Cordero, and he finally agreed to sell her his home entertainment system for $2,500. Tina made a downpayment of $700 and took possession of the entertainment system. She agreed to pay the balance due to Cordero in 18 equal $100 installments, beginning on June 5, with subsequent installments due on the fifth of each month until the balance was paid in full. Gabrielle owed Tina $2,000. On May 20, Tina entered into an oral agreement with Gabrielle whereby Gabrielle agreed to make the 18 $100 installment payments to Cordero. In exchange for this, Tina promised to forgive Gabrielle's $2,000 debt to her. On June 7, Cordero called Tina and asked where his first $100 installment payment was. At that time Tina told Cordero of her agreement with Gabrielle. Gabrielle has made none of the installment payments. If Cordero files suit demanding payment from Gabrielle, who will prevail?
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B.
C.
D.
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Quiz Comments (1)
Some interesting situations. Anyone have a good answer grid to this set of questions?
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