Law Of Contract Quiz: Multiple Choice Questions!

(C) While on probation, Ruby was subject to being fired at any time. Thus, she had no right in the nature of a property right and, constitutionally, would not be entitled to a hearing.
(A),
(B), and
(D) are all arguable reasons for terminating Ruby's employment. However, just because the city might have had a valid reason for firing her, it does not follow that, if she were otherwise entitled to a hearing, the city could forgo it.
(A), in addition, is not a good argument if the standard by which Ruby was tested was an artificial standard based solely on the physical differences between men and women, having no rational relationship to the needs of the job of a police officer.

(A) Zelda did not promise to do anything she was not otherwise obligated to do in bargained-for exchange for Christine's promise, so no consideration supported the latter's promise. If the agreement were otherwise enforceable, none of the other facts offered by the answers would prevent it from being carried out.
(B) is incorrect because a court will not examine the promisor's subjective intent when making a promise.
(C) is incorrect because mistake as to a fact that motivated the contract is not a defense under these circumstances; Christine had assumed the risk of mistake by making the promise without being certain of the cause of the accident.
(D) is similarly incorrect. Mistake as to the value of the promise is generally a risk assumed by the parties.

(B) Plunger can be held liable because its offer will be deemed irrevocable for a reasonable length of time on a theory of promissory estoppel. Promissory estoppel renders an offer binding as an option contract even without consideration if the offeror should reasonably expect it to induce action or forbearance of a substantial character by the offeree before acceptance, and such action or forbearance is in fact induced. [Restatement
(Second) of Contracts |871 Plunger offered to do the work for $10,000 if Jenny was awarded the contract. Plunger should have expected that Jenny would use this figure to prepare her bid and that if she was awarded the contract she would be bound. This is what occurred. The measure of Jenny's damages is the amount she reasonably paid for a substitute performance, less the amount saved as a consequence of the breach; i.e., the $12,000 paid to Flusher minus the $10,000 not paid to Plunger, or $2,000.

(A) is incorrect because Jenny has not yet paid Plunger anything and has only suffered $2,000 in damages. Jenny, therefore, is only entitled to the measure of damages described above.

(C) is incorrect because it is irrelevant that Jenny paid a reasonable price for the substitute performance. In the absence of awareness on her part of Plunger's mistake, which is not indicated here, she was entitled to have the work done for the contract price, or to receive damages for the difference between the contract price and the cost of the substitute performance.

(D) is incorrect because Jenny is entitled to relief even if she did not 'accept' Plunger's bid, because she detrimentally relied on it by using it in her bid.

(B) Prevention of performance by an irresistible, superhuman cause is an excuse for nonperformance of a contract, unless the parties stipulate to the contrary. The destruction of the lot by the forces of nature rendered performance impossible, so Builder need not perform.
(A) is wrong because destruction of the property does not make the contract void; it merely discharges Builder.
(C) is a misstatement of law.
(D) is wrong because there was no mutual mistake.

(C) Tina will remain liable to Cordero for the debt unless the parties have agreed to a novation. When a party to a contract delegates her duties to another, the original party
(the delegator) remains liable on her contract. This is so even if the delegate expressly assumes the delegator's duties. However, a different result would obtain if the obligee the person to whom the duties are owed) expressly consents to this transfer of duties. This would constitute an offer of novation. A novation occurs when a new contract substitutes a new party to receive benefits and assume duties that had belonged to one of the original parties under the terms of the old contract. For a novation, all parties must agree that the contractual duties between the original contracting parties are extinguished; a valid and enforceable new contract takes the place of the previous contract. The effect of the novation is to discharge the old contract. Here, Gabrielle has expressly assumed Tina's duty to pay Cordero, but that does not discharge Tina's liability to Cordero. Cordero may still sue Tina on the existing obligation between them. However, if the parties expressly agree to the substitution of Gabrielle for Tina, a novation would occur and the original contract would be extinguished. In that case, Tina would be discharged of all of her duties to Cordero regardless of whether Gabrielle subsequently performs her duties.

(A) is incorrect because Cordero, who is a third-party beneficiary of the assumption agreement between Tina and Gabrielle, does not need to elect between the third-party promisor(Gabrielle) and his own debtor (Tina). He may sue both of them (although he can recover only one satisfaction). Thus, whether Cordero has filed suit against Gabrielle is irrelevant to his right to recover the money from Tina.
(B) is incorrect for the same reason. Tina cannot change her status to that of a guarantor simply by delegating her duties to Gabrielle. Cordero can choose to sue Tina on the existing obligation between them without first trying to recover from Gabrielle.

(D) is incorrect because, as discussed above, the fact that the delegate(Gabrielle) expressly assumed the duties of the delegator (Tina) does not discharge the delegator's liability to the obligee Cordero).

(A) The agreement is enforceable because both Builder and Sufi gave new consideration to support the modification. If parties agree to modify their contract, consideration is usually found to exist where the obligations of both parties are varied. It is usually immaterial how slight the change is, because courts are anxious to avoid the preexisting duty rule. Here, the obligations of both Builder and Sufi are varied|Builder will not install the koi pond and Sufi will pay a construction price reduced by $500. Consideration is therefore found in the promise of both parties to forgo their rights under the original contract|Builder's right to full contract price and Suri's right to the koi pond.

(C) is incorrect because a contract in writing may be modified orally unless the modification brings the contract within the Statute of Frauds or, in U.C.C. cases, the contract provides that modifications must be in writing. The contract here is not within any provision of the Statute of Frauds
(see below), and does not fall under the U.C.C. Even if the contract had prohibited oral modifications, parties in non-U.C.C. cases may alter their agreement orally in spite of such a provision as long as the modification is otherwise enforceable.

(B) is incorrect because this modified construction contract does not have to be in writing, because it is not for the sale of goods valued at $500 or more and can be completed within a year. A promise that by its terms cannot be performed within a year is subject to the Statute of Frauds and must be evidenced by a writing signed by the parties sought to be bound. If the contract can be completed within one year, it need not be in writing. Here, it can be assumed that Builder could complete the studio within a year. Therefore, the modification does not have to be in writing.

(D) is incorrect because the parol evidence rule does not apply to subsequent oral agreements. The parol evidence rule states that where the parties to a contract express their agreement in a writing with the intent that it embody the full and final expression of their bargain, any other expressions| written or oral|made prior to the writing, as well as any oral expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing. Parol evidence can be offered to show subsequent modifications of a written contract, such as the oral agreement between Builder and Sufi, because the rule applies only to prior or contemporaneous negotiations.

(B) Andrew accepted Patrick's offer when he mailed his letter on January 3, and thus, a contract was formed. Under the 'mailbox' rule, acceptance of an offer by mail creates a contract at the moment the acceptance is posted properly stamped and addressed. If the offeree sends both an acceptance and a rejection, whether the mailbox rule will apply depends on which the offeree sent first, the acceptance or the rejection. If the offeree first sends an acceptance and later sends his rejection, the mailbox rule does apply. Thus, even if the rejection arrives first, the acceptance is effective upon mailing
(and so a contract is formed) unless the offeror changes his position in reliance on the rejection. Here, Andrew first sent an acceptance, then called with his rejection. The mailbox rule applies, and since there is nothing in the facts to show that Patrick relied on the rejection, a contract was formed.

(A) is wrong because it implies that a rejection must be in writing. There is no such requirement. Also, the rejection
(absent detrimental reliance) has no effect on the contract since the offer had already been accepted and the contract formed.

(C) is wrong because, as stated above, under the mailbox rule the fact that the rejection was received before the acceptance is irrelevant
(unless there has been detrimental reliance on the rejection, which was not the case here). The contract was formed when Andrew sent his acceptance.

(D) is wrong because the description, although somewhat ambiguous, can be made reasonably certain by evidence of the subjective understanding of the parties and extrinsic evidence of what was in the house, which a court will consider to clarify an ambiguous term.

(C) Warden did not properly reject, because he accepted the shoes and failed to give proper notice of rejection. A buyer who receives nonconforming goods generally has the right to accept all, reject all, or accept any commercial units and reject the rest. Here, 10% of the shoes shipped were defective, so Warden had a right to reject. To properly reject, the rejecting party must, within a reasonable time after delivery and before acceptance, seasonably notify the seller of the rejection. If the notice fails to state a defect, the buyer cannot rely on that defect if the seller could have cured by supplying conforming goods. Here, Warden failed to notify Michael of the defects; he merely sent a check for less than the contract price. Since the contract did not have a particular delivery date, Michael probably had time to cure and, presumably, would have. Thus, Warden cannot rely on the defect in claiming a breach; therefore, his rejection was improper.

(B) is wrong because, as explained above, partial payment did not give notice of the specific defect, and so Warden could not rely on that defect in rejecting. Thus, the rejection was not proper.

(D) is wrong because the right of rejection exists for any defect, whether substantial or minor. The U.C.C., which governs sales contracts such as this one, gives buyers the right to a perfect tender.

C EXPLANATION
(C) If Ann loses it will be because there was a novation. A novation occurs when a new contract substitutes a new party to receive benefits and assume duties that had belonged to one of the original parties under the terms of an old contract. All the parties must agree to the substitution. A novation discharges the old contract. The elements of a valid novation are:
(i) a previous valid contract;
(ii) an agreement among all parties, including the new party to the new contract;
(iii) the immediate extinguishment of contractual duties as between the original parties; and
(iv) a valid and enforceable new contract. When lessor Ann wrote to Carolyn agreeing to accept rent and Carolyn began to do so, a new contract was formed, and Ann's rights against Brenda were extinguished.

(A) is incorrect because laches is not available here. Laches is an equitable defense available when a party delays in bringing an equitable suit and the delay prejudices the defendant. The action here
(for back rent) is at law, not equity. Moreover, nothing in the facts indicates that Ann delayed in bringing her action. Thus, laches is not available.

(B) is incorrect because there was no accord and satisfaction. An accord occurs when the parties to a contract agree to substitute a different duty for an existing duty under the contract. Satisfaction occurs when the new duty is performed. There was no new duty here; rather, the parties agreed to substitute a new party under an existing contract
(a novation).

(D) is incorrect because attornment arises when the tenant agrees to accept a new landlord, and here Ann remained the landlord at all times.

________________________________________C EXPLANATION
(C) If Ann loses it will be because there was a novation. A novation occurs when a new contract substitutes a new party to receive benefits and assume duties that had belonged to one of the original parties under the terms of an old contract. All the parties must agree to the substitution. A novation discharges the old contract. The elements of a valid novation are:
(i) a previous valid contract;
(ii) an agreement among all parties, including the new party to the new contract;
(iii) the immediate extinguishment of contractual duties as between the original parties; and
(iv) a valid and enforceable new contract. When lessor Ann wrote to Carolyn agreeing to accept rent and Carolyn began to do so, a new contract was formed, and Ann's rights against Brenda were extinguished.

(A) is incorrect because laches is not available here. Laches is an equitable defense available when a party delays in bringing an equitable suit and the delay prejudices the defendant. The action here
(for back rent) is at law, not equity. Moreover, nothing in the facts indicates that Ann delayed in bringing her action. Thus, laches is not available.

(B) is incorrect because there was no accord and satisfaction. An accord occurs when the parties to a contract agree to substitute a different duty for an existing duty under the contract. Satisfaction occurs when the new duty is performed. There was no new duty here; rather, the parties agreed to substitute a new party under an existing contract
(a novation).

(D) is incorrect because attornment arises when the tenant agrees to accept a new landlord, and here Ann remained the landlord at all times.

(A) Wing gave up her legal right to smoke cigarettes, thus incurring detriment and fulfilling her agreement with Biddlebaum. As a result, Biddlebaum is obligated to pay Wing the $50. For a valid contract to exist, there must be
(i) mutual assent, and
(ii) consideration or an appropriate substitute. Consideration requires two elements:
(i) there must be a bargained-for exchange between the parties; and
(ii) that which is bargained for must be of legal value. Traditionally, legal value has meant that either some benefit passed to the promisor or some detriment was incurred by the promisee. Most courts today hold that detriment to the promisee is the exclusive test of consideration. There is a bargained-for exchange when the promise induces the detriment and the detriment induces the promise; i.e., the detriment must be the price of the exchange, and the promisor's motive must be to induce the detriment. There is legal detriment if the promisee does something she is under no legal obligation to do or refrains from doing something that she has a legal right to do. There is no requirement that detriment entail any actual loss by the promisee. Here, Biddlebaum offered to pay Wing $50 if she did not smoke during Campout Weekend. Wing accepted this offer. Thus, there was mutual assent between the parties. There was bargained- for exchange, in that Biddlebaum's motive in offering to pay the money was to induce Wing not to smoke, and in turn the promise of receiving the money induced Wing to promise not to smoke for the weekend. Finally, Wing incurred legal detriment in promising to refrain, and in fact refraining, from smoking for the weekend. Although Wing had never smoked and probably had no intention of smoking that weekend, the fact remains that she had a legal right to smoke if she so chose. By giving up that right at the request of Biddlebaum, Wing is deemed in the eyes of the law to have incurred a detriment. Hence, Biddlebaum and Wing have entered into a legally enforceable contract. With Wing having performed her part of the agreement, Biddlebaum is obligated to pay as per his part of the agreement.

(D) is incorrect because, as noted above, the fact that Wing would not have smoked anyway is not determinative of whether there is legal detriment. Detriment existed in the sense that Wing gave up her right to smoke, and was induced to do so by Biddlebaum's offer of money.

(C) is incorrect because the detriment to Wing arose by virtue of her refraining from doing something that she was legally entitled to do. The fact that refraining from smoking was probably beneficial to Wing's health does not change the character of her actions as a legal detriment.

(B) is incorrect because Biddlebaum could only be obligated to pay Wing pursuant to the bargained-for exchange between the parties; i.e., payment would be due upon Wing's fulfillment of her promise not to smoke for the weekend. Had Wing failed to perform as promised, there is no principle of law that would impose on Biddlebaum a 'moral' obligation arising from his anti-drug activities.

(C) The jeweler is entitled to recover $400 because, upon attaining the age of majority, Shelley affirmed the contract as to her ring at that price. Infants generally lack legal capacity to incur binding contractual obligations. Contracts entered into by infants are voidable at this election unless the contract is for a 'necessity.' On reaching majority, an infant may affirm; i.e., choose to be bound by her contract. Here, at the time of entering into the contract for the two rings, Shelley was not yet 18 years old
(the applicable age of majority). Because a wedding ring is not a necessity, Shelley's contract was voidable at her option. However, when Shelley went back to see the jeweler, she had reached the age of 18. At that time, she chose to be bound by the contract, although her affirmation was limited to her ring
(instead of both rings), and to a lower price for her ring than that which was originally agreed upon. When a voidable promise is reaffirmed, the promise will be enforced according to the terms of the reaffirmation rather than the original obligation. Thus, Shelley is now bound by her contract, but only for the purchase of her ring at a price of $400.
(D) is incorrect because it ignores the fact that, having affirmed the contract
(albeit at different terms), Shelley, who is no longer an infant, is bound to the terms of the reaffirmed contract.
(A) is incorrect because $1,150 reflects the purchase price of both rings as contained in the original contract. Upon reaching majority, Shelley chose not to be bound by the original contract. Similarly,
(B) is incorrect because $500 reflects the purchase price of Shelley's ring as contained in the original agreement
(as well as the market value of the ring). Upon reaching majority, Shelley could have refused to pay anything. She is now bound only to the contract as affirmed by her, which is for $400.

(D) Marchand's letter of acceptance created an enforceable contract.

(A) is wrong because requirements contracts are now recognized as sufficiently definite to be enforced.

(B) is incorrect because MSU's promise was not illusory; it agreed to expand its degree program and to accept anyone who applied.

(C) is not the best answer because ICT's offer was accepted before the purported revocation, and so the revocability of the offer is immaterial.

(D) Prodigal was a third-party beneficiary of the original Mater-Vault deposit agreement. A thirdparty beneficiary's rights do not vest
(i.e., are modifiable) until he: manifests assent to the promise, brings suit to enforce the promise, or materially changes position in justifiable reliance on the promise. None of these vesting acts occurred before the modification here; in fact, Prodigal did not even know of the first contract until after the modification. Thus, his rights had not vested, and the terms of the second Mater-Vault deposit agreement control the disposition of the funds. Thus,

(A) is incorrect.

(B) is incorrect, because even if Prodigal were an assignee, this gratuitous assignment would be revocable.

(C) is incorrect because Prodigal's rights could have vested without obtaining possession of the passbook.

(B) Quack will be able to recover a reasonable price for his services. While the parties failed to agree on a material term, most courts today will imply reasonable terms if they are consistent with the parties' intent as otherwise expressed. Terms that can be supplied by a reasonableness standard include a price term for the performance of services. Unless the parties have shown at the time of contracting that they do not want a contract until they agree on a price, a reasonable price will be implied.
(A) is wrong because Quack's fee is not necessarily reasonable although the court will take into account Quack's normal fee when it determines the reasonable fee.
(C) is wrong because it fails to take into account that a court will imply a reasonable price term.
(D) is wrong because it is irrelevant. In contract, a party need not prove that the 'performing' party actually caused the performance. Mary received the performance she bargained for here|a cure.

(A) Sinead can use both a promissory estoppel theory and a bargain and exchange theory to collect from Sheila's estate. To be enforceable, a contract must be supported by consideration or there must be a substitute for consideration. Generally, consideration requires a bargained-for exchange of something of legal value from each party. To be bargained-for, the promise must induce the detriment and the detriment must induce the promise. Here, Sinead was induced to purchase the shawl and incur a debt in exchange for Aunt Sheila's promise to pay, and Aunt Sheila was induced to pay in exchange for Sinead's promise to purchase the shawl and attend the festival. It does not matter that Aunt Sheila did not receive an economic benefit|influencing Sinead's mind is sufficient to establish an exchange. Both parties gave something of legal value since Aunt Sheila had no legal duty to pay for a shawl for Sinead and Sinead had no legal duty to purchase a shawl and attend the festival. Therefore, there was a bargained-for exchange of something of legal value and a contract was formed. Thus, II. states a theory that is helpful to Sinead. Promissory estoppel
(I.) is also helpful. Promissory estoppel is a substitute for consideration: A promise is enforceable to the extent necessary to prevent injustice if the promisor should reasonably expect to induce action of a definite and substantial kind, and such action is induced. Here, Aunt Sheila's promise would reasonably induce Sinead to buy the shawl and she was in fact so induced. Thus, promissory estoppel would allow Sinead to recover. Neither of the other two theories will lead to enforcement of Aunt Sheila's promise. A promise to make a gift is unenforceable for lack of consideration, and this result is not changed where the promise to make the gift is conditional and the conditions have been fulfilled. In fact, an argument that there was a conditional gift would negate the bargain and exchange needed to establish an enforceable contract, since it would involve arguing that Aunt Sheila did not intend to induce Sinead's detriment (i.e., Aunt Sheila was not seeking to trade her promise to pay in exchange for Sinead's promise to attend), but rather was merely stating upon what conditions Sinead could receive her gift. Therefore, III. is not helpful to Sinead. An argument that there was an account stated
(IV.) is inappropriate because that is a contract where parties who have had a series of transactions agree to a final balance due from one to the other. Here, Sinead is seeking to enforce a single transaction. Therefore,

(A) is correct, and

(B),

(C), and

(D) are wrong.

(A) Under the modern, majority view, where the offeror could reasonably expect that the offer would induce the offeree to detrimentally change position in reliance on the offer, the courts will hold the offer to be an irrevocable option due to the detrimental reliance. (D) would be the correct answer under the older, minority view, which did not recognize the application of promissory estoppel in this situation, and would thus apply the rule that the revocation, effective on receipt, predated dispatch of the acceptance. (B) is wrong because the offer is converted into an equitable option, not an express option. (C) is incorrect because SCE's agreement to expand its degree program and accept applying students is adequate consideration to support ICT's promise.

(B) The contract extended for a 10-week period. Missing only four days of a performance to run for 10 weeks would not be considered a total material breach of the contract.

(A) is wrong because this would tend to go more to a formation problem. Here the contract has already been validly formed.

(C) is wrong because a claim of impossibility could conceivably discharge the entire contract, and, therefore, Fiddler would have no claim.

(D) is wrong because Fiddler need not be warned of the consequences of a breach.

(D) An implied warranty of fitness for particular purpose arises where a seller knows that the buyer is relying on the seller to pick suitable goods for the buyer and the buyer relies on the seller's expertise. Here, Martha asked the seller to pick suitable goods, but declined the seller's advice and picked out her own shoes. Therefore, this warranty did not arise. The implied warranty of merchantability arose but was not broken. This warranty arises in every sale of goods by a merchant and ensures, generally, that goods shall be fit for ordinary purposes. Nothing in the facts indicates that the shoes here are not fit for ordinary purposes. The only express warranties here arose from the statement that the shoes were leather and, perhaps, from the sample shoe on the sales floor. However, nothing in the facts indicates that there has been a breach of either of these express warranties. Therefore,

(D) is the correct answer.

(D) properly states the U.C.C. position regarding the terms of the contract. Under the U.C.C., if both parties to a contract are merchants, additional terms in an acceptance will be included in the contract unless
(i) they materially alter the original contract;
(ii) the offer expressly limits acceptance to the terms of the offer; or
(iii) the offeror has already objected to the particular terms, or objects within a reasonable time after notice of them is received. [U.C.C. |2- 207(2)] Triton and Banfield are both merchants because they regularly deal in goods such as the drill bits. [U.C.C. |2-104(1)] Therefore, their contract for the sale of the bits comes under Article 2 and will include the term of Triton's offer plus those in Banfield's purported acceptance which do not amount to a material alteration of the offer or to which Triton did not object within a reasonable time. Note that Triton's offer did not expressly limit acceptance of its terms.

(A) is incorrect because this was a contract between two merchants. Contract formation under the U.C.C. for contracts between merchants is governed by the rule stated above. If one of the parties were not a merchant,

(A) would be correct|if one of the parties to a contract for sale of goods is not a merchant and the acceptance includes additional or different terms, such terms are considered to be mere proposals that do not become part of the contract unless the offeror accepts. [U.C.C. |2-207(1)] However, because this is a contract between merchants, Banfield's terms regarding mode of shipment will be included in the contract unless they materially alter the original contract, as discussed above.

(B) is incorrect because it does not fully state the Code's 'battle of the forms' provision. The choice fails to mention Triton's power to object within a reasonable time.

(C) is incorrect because, like

(B), it does not note Triton's power to object within a reasonable time.

(B) Grandfather's promise was a promise to answer for the debt of another, which is required to be in writing under the Statute of Frauds.

(A) is wrong because the contract clearly is not illusory; Uncle promised to pay if Nephew received 'A's. Uncle would be paying money and Nephew would be giving Uncle the satisfaction of Nephew's receiving 'A's.

(C) is wrong because the consideration for Grandfather's promise is Nephew's act of getting 'A's.

(D) is incorrect because this was not the bargained-for exchange Nephew expected.

(C) Amalgamated cannot compel Pet Products to fill the order. An assignment of rights is barred if it will substantially change the obligor's duty. At common law, the right to receive goods under a requirements contract generally was not assignable because the assignment could change the obligation of the parties. Under the U.C.C., such a right might be assignable if the quantity requirement is not unreasonably disproportionate to the quantity originally contemplated by the parties. [U.C.C. |2-306] Here, the owner of Hair of the Dog owned only one store and his requirements for the first six months of the contract were only 10 cases per month. Amalgamated, on the other hand, is a chain and its requirements are 5,000 cases per month, a disproportionately large increase. Therefore, the assignment here would be unenforceable even under the Code.

(A) is incorrect because prompt notice of the assignment does not obviate the problem of the unreasonably disproportionate requirements.

(B) is incorrect because there is mutuality of obligation
(consideration on both sides) here. The parties entered into a requirements contract whereby Pet Products agreed to sell Hair of the Dog all of its pet food requirements and Hair of the Dog promised to buy its pet food only from Pet Products.
(Hair of the Dog's promise to buy only what it 'might order' is not illusory because it agreed to not purchase pet food from any other source.) A requirements contract is not illusory because the U.C.C. imposes a duty to purchase requirements in good faith.

(D) is incorrect because it implies that the assignment here is not assignable because the assignee poses a different credit risk from the assignor
(and the risk can be eliminated through cash payment). However, as discussed above, the contract here is not assignable because of the unreasonably disproportionate requirements of Amalgamated, not because of Amalgamated's creditworthiness or lack thereof.

(D) Bluto will not be liable to Olive because Bluto's duty to purchase ads was excused by Popeye's failure to use Bluto's repair shop exclusively. The facts indicate that Popeye and Bluto entered into a valid contract that required Bluto to render some performance to Olive. Olive is an intended third-party beneficiary because
(i) she was expressly designated in the contract,
(ii) some performance is to be made directly to her, and
(iii) she stands in such a relationship to the promisee (she is Popeye's wife) that an intent to benefit her can be inferred. She can enforce the contract because her rights have vested; she has materially changed position in justifiable reliance on the promise by turning down work from two prospective clients because of the time Bluto's ads would take. However, when the third-party beneficiary sues the promisor on the contract, the promisor may assert any defenses to formation or performance that he would have been able to assert against the promisee, including failure of a condition. Bluto's promise to perform by placing all of his ads with Olive during the term of the agreement was dependent on the condition that Popeye have all of his buses repaired by Bluto. The failure of Popeye to fulfill this condition excused Bluto's duty to continue to place ads with Olive, and Bluto will be able to assert this defense to performance against Olive.

(A) is incorrect because Olive's partial performance does not create a duty for Bluto to continue placing the ads. Bluto's duty is also dependent on performance by Popeye.

(B) is incorrect because Olive's detrimental reliance only establishes that her rights in the contract have vested. Thus, she can bring a contract action against Bluto, but Bluto will have a defense.

(C) is incorrect because a third party can acquire rights in a contract as an intended beneficiary even though she provided no consideration. The fact that Olive may be a donee beneficiary would not prevent her from enforcing the contract.

(B) Mountain View Hospital can still sue if it detrimentally relied on the agreement. An intended third-party beneficiary can enforce a contract only after its rights have vested. Vesting occurs when the beneficiary:
(i) manifests assent to the promise in a manner invited or requested by the parties;
(ii) brings suit to enforce the promise; or
(iii) materially changes position in justifiable reliance on the promise. Thus, if Hospital detrimentally relied on the agreement between Jansen and Sole Man, Hospital's rights will have vested and the parties' right to modify their agreement will have been eliminated, at least with respect to payment to Hospital. Thus,

(B) presents an accurate statement of applicable legal principles.

(A) is incorrect because, as noted above, the third-party beneficiary's rights do not vest until occurrence of one of the specified conditions. Vesting does not automatically occur on execution of the contract.

(C) is incorrect because it fails to account for the possibility that Hospital may have taken action causing its rights to vest prior to the later agreement between Jansen and Sole Man. Had this been the case, the later agreement would not have cut off Hospital's right to maintain an action on the original agreement.

(D) is incorrect because simply learning of an agreement, without taking any of the required actions for vesting
(i.e., detrimentally relying on the agreement by materially changing position), will not result in the vesting of the rights of a third-party beneficiary.

(C) A contractual duty may be discharged by an accord and satisfaction. An accord is an agreement in which one party to an existing contract agrees to accept, in lieu of the performance that she is supposed to receive from the other party, some other, different performance. Satisfaction is the performance of the accord agreement. The effect of this performance is to discharge both the accord agreement and the original contract. An accord and satisfaction may be accomplished by a good faith tender and acceptance of a check conspicuously marked 'payment in full' where there is a bona fide dispute as to the amount owed. Boris and Pearly agreed that Boris would perform the dental work needed by Pearly in return for Pearly's promise to pay 'about $3,500.' The facts indicate that, following the actual dental work, there ensued a good faith dispute as to whether Pearly owed only $3,500 or the additional $600 as well. Pearly in good faith tendered to Boris a check marked 'payment in full,' which notation Boris saw before he deposited the check into his account. Boris's acceptance of Pearly's check gives rise to an accord and satisfaction with regard to the disputed original debt. Thus, Boris is deemed to have accepted the amount tendered by Pearly as full payment for the dental services performed, and Pearly's duty to pay for the services is discharged.

(A) is incorrect because, even if Boris could have successfully asserted that $4,100 was within the range of the amount 'about $3,500,' his actions with respect to the check constitute an acceptance of the amount tendered therein.

(B) is incorrect because an account stated is a contract whereby parties agree to an amount as a final balance due. For an agreement to be an account stated, there must be more than one prior transaction between the parties. The dispute between Pearly and Boris involves only one transaction. Thus, there is no account stated.

(D) is incorrect because, with the existence of an accord and satisfaction, Pearly's duty to pay is deemed to be discharged. Thus, it is irrelevant at this point that the inlays may have been medically necessary or that Boris charged a fair price for them.

(C) Carver had no duty to disclose to Page the true value of the stock. If, however, Carver had represented that the stock was not worth more than $6 a share, this would have constituted material misrepresentation and no contract would result.

(A) is wrong because Carver's knowledge of the true value did not create a duty to disclose that knowledge.

(B) is wrong because there was no duty to inform Page of the true value of the inventory.

(D) is wrong because if Carver had misrepresented the value of the stock, availability of Chemco's financial statement to Page would not relieve Carver of liability.

(B) Betsy will prevail because complete destruction of the dictionary results in avoidance of the contract and discharge of her duty to pay, since Stan still had the risk of loss. Since the contract here is for the sale of goods, it is governed by the Uniform Commercial Code
('U.C.C.'). Under the U.C.C., if a contract requires for its performance particular goods identified when the contract is made, and, before risk of loss passes to the buyer, the goods are destroyed without the fault of either party, the contract is avoided. [U.C.C. |2-613] All of the elements of section 2-613 are present here. The contract required Stan's particular dictionary, which was identified at the time the contract was made. The risk of loss had not yet passed to Betsy because in a sale by a nonmerchant such as Stan, risk of loss does not pass to the buyer until tender [U.C.C. |2-509], and Stan never tendered the dictionary here
(there was no actual tender and delivery was not due until April 20). Finally, the fire was caused by Hugh's careless smoking, and so the goods were destroyed without the fault of either party. Thus, the contract is avoided.
(The same conclusion would result under the common law doctrine of impossibility|all executory duties are discharged when the subsequent destruction of the subject matter of a contract renders performance impossible.)

(A) is incorrect because the U.C.C. contains no such rule. The only U.C.C. remedy that depends on an injured party's insurance involves the risk of loss after the buyer's revocation of acceptance or wrongful repudiation under section 2-510. Here, Betsy does not have to pay because the destruction of the dictionary discharged her duty to do so.

(C) is wrong because, as explained above, the risk of loss had not yet passed to Betsy.

(D) is wrong because the U.C.C. does not follow the doctrine of equitable conversion; rather, the Code contains very specific risk of loss rules, as detailed above.

(B) Eero's best argument is that a personal services contract is not specifically enforceable. Thus, Odivia cannot obtain specific performance of Eero's agreement to perform personal plumbing, electrical, and carpentry work for her. One of the prerequisites to obtaining specific performance is that a plaintiff must show that the legal remedy is inadequate. Where the plaintiff has contracted for something rare or unique, money damages are inadequate compensation for loss of the bargain. Generally, services to be performed under a personal services contract are not unique and money damages can remedy a breach. Thus, specific performance is not available in such cases. In addition, even in the case of unique services, a court will not order a defendant to work for the plaintiff, in part because of the difficulty of enforcement and because such an order is tantamount to unconstitutional involuntary servitude. Another requirement for specific performance is that enforcement must be feasible. Enforcing a personal services contract generally would create complicated and time-consuming supervision problems that courts are reluctant to undertake. In this case, Eero agreed to personally perform for Odivia plumbing, electrical, and carpentry work. Thus, this was a personal services contract. However, the services to be performed by Eero were not unique or capable of being performed solely by Eero. Odivia could obtain adequate compensation by receiving the amount, above her contract price with Eero, that it will cost to have someone else perform the required work
(plus reasonable compensation for the delay in performance). Thus, specific performance is inappropriate here.

(A) is incorrect because circumstances that would permit the defense of laches do not appear to be present. Laches is available as an equitable defense if the plaintiff has unreasonably delayed in bringing the action and the delay is prejudicial to the defendant. There is no automatic invocation of laches by a delay of one year before suit is filed. Here, there is no showing that Odivia's delay in filing suit was unreasonable, given that she spent several months trying to find another contractor, nor that Eero has been prejudiced by the delay. Therefore, laches will not provide Eero with a strong defense.

(C) is incorrect because, if only nominal damages are available, Odivia will not have an adequate legal remedy. Nominal damages are appropriate where there is a breach, but no actual loss. Here, nominal damages would fail to compensate Odivia for the amount she will have to pay above the price agreed to by Eero. Thus, the availability of nominal damages would not, by itself, render specific performance an inappropriate remedy. Regarding

(D), a court of equity may inquire into the relative values of agreed-upon consideration and deny an equitable remedy if it finds a contract to be unconscionable. Nevertheless, the mere fact that Odivia could not find another contractor to do the job for the price agreed upon by Eero does not establish that her contract with Eero was unconscionable. Thus, Eero will not be successful in his contention that specific performance should be denied on the basis that the price for which he agreed to do the work was too low.

(D) Under U.C.C. section 2-207, proposed new terms in a deal between merchants do not terminate the offer
(i.e., do not constitute a counteroffer) and they become part of the deal unless
(i) the offer is limited to its own terms,
(ii) the new terms materially alter the deal, or
(iii) the offeror objects within a reasonable time.

(D) is correct and

(C) is incorrect because Bill's proposal would materially alter the terms of the contract.

(A) and

(B) are wrong because the letter is not a counteroffer.

(B) Wendy's strongest argument is that Brikk had drawn up both the detailed specifications of the agreement and the plans for the house. When both parties entering into a contract are mistaken about facts relating to the agreement, the contract may be voidable by the adversely affected party if (i) the mistake concerns a basic assumption on which the contract is made;
(ii) the mistake has a material effect on the agreed-upon exchange; and
(iii) the party seeking avoidance did not assume the risk of the mistake. Here, it is likely that neither party knew that the soil conditions were unsuitable. But if Brikk had drawn up the specifications and plans for the house, it will be more likely that the court will conclude that he has assumed the risk of any mistake as to the sufficiency of the soil to support the house, and will not be able to avoid the contract.

(A) might be helpful to Wendy, but it might also be harmful to her and so is not as good an answer as

(B). The fact that it is physically possible to build the house at an increased cost negates the defense of impossibility
(which is also unavailable because the impossibility existed at the time the contract was entered into). However, the argument may aid a defense of impracticability, which is available where the party to perform has encountered extreme and unreasonable difficulty in performing which was not anticipated by either party. While a moderate increase in the cost of building would not be sufficient for impracticability, the fact that performance here will cost over 300% more than the anticipated cost will support the impracticability defense. [See Restatement (Second) of Contracts |261, comment d]

(C) would not be as helpful to Wendy's case as

(A) because it only indicates that there was a mutual mistake, and a contract can be avoided for mutual mistake unless the adversely affected party bears the risk of the mistake, which the fact in
(B) would establish.

(D) is irrelevant because whether Dorothea, the third-party beneficiary, knew of the contract affects only her ability to enforce the contract. Wendy, as a party to the contract, may enforce regardless of whether Dorothea knew of it.

(C) Miller's strongest argument is that since the contract, by its own terms, could not be performed within a year, it was subject to the Statute of Frauds and should have been in writing. Since it was not, it is void under the Statute of Frauds.

(A) would be a possible argument, but it is not as strong as the Statute of Frauds argument. Further, it would probably fail as there does appear to be manifest intent to contract.

(B) is wrong because if there was a valid contract, it would not have been terminated by Gray's death. Rather, Gray's estate would have been liable for the monies owed.

(D) is wrong because this was not a divisible contract.

(C) Munson will be able to recover the contract price less damages for Purveyor's minor breach. Generally, an assignee has whatever rights his assignor would have against the obligor. Similarly, the assignee is subject to any contract-related defenses that the obligor has against the assignor. Thus, Munson will have whatever rights Purveyor would have against Son. Here, Purveyor completed all of the tasks that needed to be done except for one. If the work remaining on the contract is minor, Purveyor will be seen as substantially performing its contract, and substantial performance will discharge its duty to perform and obligate payment by Son. Since the facts state that the cost of finishing the job was relatively small
(10% of the cost of the contract), it will probably be seen as a minor breach. Thus, Son cannot avoid payment of the contract price. However, despite the substantial performance, the other party to the contract may recover damages for the less than complete performance. Thus, Son will be able to offset his damages from the breach. Munson then will be able to recover $1,350
(the contract price less the damages).

(A) is incorrect because, as stated above, the obligor may offset damages directly against the assignee; he does not have to pay the full contract price and then seek damages from the assignor.
(B) is incorrect because this suggests a quasi-contract remedy, but as stated above, Munson, the assignee of Purveyor, would be able to recover the contract price less damages because Purveyor substantially performed.

(D) is incorrect because the constructive condition precedent to Son's duty to pay
(Purveyor's performance) has been satisfied here by substantial performance.

EXPLANATION
(A) Babe can recover because, under the modern trend, the preexisting duty rule does not apply if the duty is owed to a third person. Generally, contracts must be supported by consideration. A promise to perform is valid consideration, but if a person already owes a duty to perform, traditionally that performance cannot be used as consideration for another promise. Thus, under the traditional rule, Babe could not enforce Joe's promise to pay Babe $5,000 if Babe hit a home run because Babe gave no valid consideration in exchange for Joe's promise, since Babe owed a preexisting duty to his ball club to exert his best efforts to hit home runs. However, under the modern view as formulated in Restatement
(Second) of Contracts, section 73, a duty is a preexisting duty only if it is owed to the promisor. Thus, a promise to perform a duty is valid consideration as long as the duty of performance is not already owed to the promisee. In other words, if the duty is owed to a third party, a promise to perform given to another is valid consideration as long as it was bargained for.

(B) is incorrect because there is no exception to the preexisting duty rule|modern or otherwise|that allows the promisor to recover merely because his performance benefited the third party. Babe can recover under the modern approach because his promise to Jimmy's father was bargained for. Conversely, Babe does not have to prove that the value of his home run to Jimmy was at least $5,000, because courts generally will not inquire into the adequacy of consideration.
(C) would be correct under the traditional rule, but this question is one of the few questions where you are asked about and expected to know the modern trend. As explained above, under the modern trend, the promise here is valid consideration because the duty to hit home runs was owed to a third party
(the ball club) rather than to the promisee
(Joe).

(D) is wrong because while it is true that moral consideration is not good consideration, Joe did not rely on moral consideration, but rather exchanged a promise to pay $5,000 for Babe's performance.

(B) There is an enforceable contract between Genoa and Rudder because Genoa fully performed. The contract here was for the sale of goods
(sails) for the price of $500 or more; thus, the contract is within the Statute of Frauds. A contract within the Statute of Frauds is generally unenforceable absent a memorandum signed by the party to be charged containing the contract's essential terms. However, there is an exception to the general rule for goods received and accepted. Here, although the contract was oral, Rudder accepted the sails, and so he is bound despite the Statute. Note that Rudder might also be bound under another exception to the Statute|for specially manufactured goods if the sails were made specially for the yacht and were not suitable for sale to others.

(A) is incorrect because the U.C.C. does not exempt merchants from the Statute of Frauds. Although it provides a special confirmatory memo rule by which a merchant may be bound even if his signature does not appear on the writing evidencing the contract, here there is no writing at all.

(C) is incorrect because it is irrelevant. The fact that Rudder agreed not to subcontract is relevant to whether he breached his contract with Winston, but it does not affect his contract with Genoa.

(D) is incorrect because, as stated above, the contract here falls within an exception to the Statute of Frauds because Rudder accepted the sails.

(D) Insurance contracts usually cannot be voided by infants. Thus, the liability insurance, and settlement agreement arising out of it, are valid.

(A) seems to be based on the incorrect assumption that, because of Tortfeasor's minority at the time the liability policy was issued, Insurer might not be bound on the contract of insurance. Actually, the effect of a contract entered into between an infant and an adult is that the contract is voidable by the infant but binding on the adult. Thus, there is no question that Tortfeasor has rights under the liability policy.

(B) assumes that Tortfeasor's minority constitutes a defense. As explained above, this is incorrect.

(C) is incorrect for the same reason.

(C) Since Baker contracted for 100 bushels on August 1, Zeller had a contractual duty which was breached by the tendering of only 95 bushels. Baker has a cause of action for that breach.

(A) is wrong because substantial performance does not excuse total performance of contractual duties.
(B) is wrong because discharge by impossibility only occurs where impossibility is objective. The fact that Zeller only had 95 bushels created a subjective rather than an objective impossibility of performance, and thus did not excuse his breach.

(D) is wrong because Baker was entitled to performance on August 1.

(C) The extreme difficulty and expense of repairing or replacing the oven constitutes a good faith reason for FGF to cancel the contract, as it is entitled to do under the contract. Thus, GM will not prevail. Reservation of an unqualified right to cancel or withdraw from a contract at any time may amount to an illusory promise. However, the promise is not illusory, and there is a valid consideration, if the right to cancel is restricted in any way. Here, the right of either FGF or GM to cancel is restricted because it must be preceded by reasonable notice to the other party. In addition, the Code's implied requirement of good faith in all sales contracts imposes an additional restriction on the parties' right to cancel. Therefore, the promises are not illusory, and both parties are bound. FGF finds itself confronted with circumstances that present extreme and unreasonable difficulty and expense in complying with its contractual duties of supplying pate. While this additional test might not be sufficient to discharge FGF's duties on grounds of impracticability, it is clearly grounds for supplying FGF with a good faith reason for canceling the contract.

(A) is incorrect because FGF is entitled to cancel the contract for a good faith reason upon giving reasonable notice. It is not necessary to show impossibility.

(B) is incorrect because the fact that the parties agreed to a cancellation provision indicates that FGF did not assume all risks of increased expenses in making pate. The unreasonable amount of expense and difficulty involved with the repair and/or replacement of the oven supports FGF's good faith decision to cancel the contract.

(D) is incorrect because, while some courts have found promises to be illusory if the contract provided for an unqualified right to cancel the contract at any time, here the right to cancel is restricted by requirements of good faith reasons for cancellation as well as giving reasonable notice.

(D) The language of the reward offer should not be read with total literalness, but rather in the context of what Big City was seeking to obtain and the normal duties required to accept an offer of this kind. Therefore,

(A), which would require that the offeree actually participate in the arrest, can be eliminated. Offers of this type normally require only that the offerees supply information leading to the arrest and conviction of the culprit.

(B) and

(C) can be ruled out without difficulty because they would envision a bilateral contract under which the offeree would be promising or assenting to Big City's proposal. In this kind of word context the offer is obviously the unilateral proposal that can be accepted only by performance.

(B) Although there was no consideration for Indegas to take only one-half of the bargained-for production, none is required because this is a contract for the sale of goods, and subject to U.C.C. section 2-609
(which provides that good-faith modification is enforceable regardless of lack of consideration).

(C) is therefore wrong.

(A) and

(D) make no sense.

(C) Tarbel should be able to recover $250,000 in quasi-contract. Where a builder in a construction contract breaches during the construction, the owner of the building is entitled to the cost of completion plus compensation for any damages caused by the delay in completing the building. Most courts, however, at least where the breach is not willful, will allow the builder to offset or recover for work performed to date to avoid the unjust enrichment of the owner. This recovery, which would be based on quasi-contract, is usually based on the benefit received by the unjustly enriched party. If substitute performance is readily obtainable, damages are measured by the unpaid contract price minus the cost of completion
(up to the value of the benefit received by the defendant). Here, Tarbel's duty to complete the project was not discharged by impossibility; he could have hired another contractor to take his place or yielded to his employees' demands. Hence, Tarbel's failure to complete the remodeling constituted a breach of contract and resulted in the college having to expend $150,000 to have the building completed in time. However, Tarbel did not receive any payments for the work that he did before breaching; the college would be unjustly enriched if it does not have to pay for any of this work. The benefit of the completed remodeling is measured by the contract price, $400,000, because a quasi-contract recovery here would be based on the failed contract between the parties and substitute performance is readily obtainable. This amount is reduced by the $150,000 cost of completion that the college can recover from Tarbel, leaving a net recovery of $250,000 for Tarbel.

(A) is incorrect. Because Tarbel's breach was not willful, most courts would permit him to recover in quasi-contract to prevent the college's unjust enrichment from the work that he did.

(B) is incorrect because recovery measured by the claimant's detriment (i.e., his reliance interest) is only an appropriate alternative where the standard 'benefit' measure would achieve an unfair result; it is not applied where the party seeking quasi-contract recovery was the breaching party.

(D) is incorrect because courts will always limit relief to the contract price where the claimant is the breaching party. Measuring the benefit to the college in terms of the value of the improvements rather than the contract price will deny to the college the benefit of the bargain that it became entitled to when Tarbel breached.

(B) Retailer is entitled to recover $800. Wholesaler's notice that it would be unable to fill Retailer's order constituted an anticipatory repudiation, which Retailer was entitled to treat as a total breach. Under the U.C.C., the buyer's basic remedy where the seller breaches by refusing to deliver is the difference between the contract price and either the market price or the cost of buying replacement goods
('cover'). If the buyer intends to fix damages based on the latter measure, the buyer must make a reasonable contract for substitute goods in good faith and without unreasonable delay. Here, Retailer chose to make a contract for a higher quality of sunglasses at a higher price, even though the model that he had originally ordered was available from a supplier outside the area. While Retailer need not find the lowest available price in the country or make a contract for substitute goods with an unreliable supplier, he was aware that he could have obtained the 'Red Star' sunglasses in plenty of time from the nonlocal supplier. Absent additional facts that would justify Retailer's decision, he can recover only the difference between the contract cost and a reasonable contract for substitute goods. Hence,

(A) is wrong because Retailer's contract for cover probably would not be deemed to be commercially reasonable.
(C) is wrong because Retailer's remedy based on market price would be determined at the time Retailer learned of the breach, not necessarily the time of performance. In the case of an anticipatory repudiation such as this, the buyer may either treat the anticipatory repudiation as a total breach and pursue his breach of contract remedies, or suspend his performance and await seller's performance for a commercially reasonable time. Retailer chose to treat Wholesaler's notice as a total repudiation and breach of contract. Hence, the market price remedy would be measured at that time because that is when Retailer 'learned of the breach,' rather than at the time of performance.

(D) is wrong because the nonrepudiating party need not wait for the repudiating party to retract its repudiation. Retailer exercised its option to treat the repudiation as a total breach and buy substitute goods. Once that occurred, Wholesaler was not entitled to retract its repudiation and force Retailer to accept the sunglasses.

(A) Tina has delegated to Gabrielle her duties under the agreement with Cordero, and Gabrielle has agreed to assume such duties by agreeing to make the 18 installment payments to Cordero. Where a delegate's promise to perform the delegated duty is supported by consideration, there results a third-party beneficiary situation, so that the nondelegating party to the contract can compel performance or bring suit for nonperformance. Gabrielle's promise to make the payments to Cordero, totaling $1,800, was given in exchange for Tina's promise to forgive the $2,000 debt owed to her by Gabrielle. Tina thus relinquished her right to take action against Gabrielle for the full amount owed, thereby incurring legal detriment. Consequently, the promise of Gabrielle was supported by consideration, and a situation arose in which Cordero became a third-party beneficiary of the agreement between Tina and Gabrielle, able to enforce performance of Gabrielle's promise to pay.

(C) is incorrect because, as explained above, Gabrielle's promise to Tina was supported by consideration.

(B) is incorrect because there was no assignment of Tina's rights to Cordero; i. e. , Tina did not manifest an intent to transfer to Cordero her rights against Gabrielle. Rather, Tina transferred to Gabrielle the duties that she owed to Cordero.

(D) is incorrect because the surety provision of the Statute of Frauds requires only that a promise to answer for the debt or default of another must be in writing. Such a promise must be collateral to another person's promise to pay rather than a primary promise
(a promise to pay directly for the benefits given to another). Here, Gabrielle did not promise Cordero that if he sold the entertainment system to Tina, and Tina did not pay, Gabrielle would pay. Instead, Gabrielle promised to Tina that she would directly perform Tina's obligation to pay Cordero. Thus, this is not the type of promise required by the Statute of Frauds to be in writing.

(A) This is a question requiring precise knowledge of the U.C.C. The problem is governed by U.C.C. sections 2-615 and 2-616. A crop failure resulting from an unexpected cause excuses a farmer's obligation to deliver the full amount as long as he makes a fair and reasonable allocation among his buyers. George has done this by allocating pro rata between Walter and Vinnie. Nevertheless, under U.C.C. section 2-616 the buyer may either accept the proposed modification or terminate the contract. Thus,
(B) is wrong.
(C) is wrong because even though alternative sources are available, George is not obligated to use them because the contract was tied to a designated parcel of land|'my [George's] ranch.'
(D) is wrong because it is contrary to the provision of U.C.C. section 2-615, which permits the farmer to make an allocation.

(C) Hanson will be able to recover the full $20,000 contract price. Under the U.C.C., the contract is enforceable, despite the absence of a writing, to the extent of the goods accepted, which here is the entire amount contracted for. The proper remedy is the agreed-upon price of $20,000, which Hanson will be able to prove by parol evidence. [See U.C.C. |2-201, comment 2]

(A) is incorrect because the recovery will be under the contract, because the promises are enforceable under two exceptions to the Statute of Frauds
(i.e., Mary accepted the diamond, and the diamond was specially shaped and cut for Mary and may not be suitable for sale to others); thus, the quasicontract remedy need not be applied. Note that if the contract had been unenforceable, quasicontract would be a basis for a recovery.

(B) is incorrect because it also is a possible quasi-contract measure of damages, and as stated above, Hanson will be able to recover under the contract here.
(D) is incorrect because the court will construe Mary's agreement as a promise rather than an implied condition. If it were a condition, Mary would not have a duty to pay because she was not paid. However, where an agreement provides that a duty is to be performed once an event occurs, if the event is not within the control of the promisee, it is less likely that he will have assumed the risk of its nonoccurrence and therefore less likely to be a condition of the promisor's duty to perform. In doubtful situations, courts will more likely hold that the provision is a promise rather than a condition because this supports the contract and preserves the reasonable expectations of the parties.

(D) TM will likely succeed because MacDougall will otherwise be unjustly enriched by getting the system without having to pay the second installment. Where quasi-contractual relief is used to remedy a failed or unenforceable contract, all that is necessary is that the failed contract result in unjust enrichment of one of the parties. Even a party who has breached a contract
(and therefore cannot enforce it) can recover in quasi-contract under the modern view as long as the breach did not involve seriously wrongful or unconscionable conduct. Hence, neither the failure of the express condition
(A) nor the breach of contract claim
(B) would preclude TM from recovering in quasi-contract for the reasonable value of its services.
(C) is not as good a choice as

(D) because all that is necessary to recover in a failed contract situation is that the other party would otherwise be unjustly enriched. Where there is no contractual relationship between the parties, the party seeking quasi-contractual relief must specifically show that his expectation of being compensated is reasonable and that the benefits were conferred at the express or implied request of the defendant, but those elements are assumed when the unjust enrichment occurs in a failed contract situation. Hence,

(D) states the rule in this situation more accurately than
(C).

(B) Specific performance is appropriate where the legal remedy is inadequate. The legal remedy is inadequate where land is the subject of the contract. Although theoretically the seller of land will be fully compensated by money damages, the courts will usually grant specific performance to the seller, because land is considered unique. Thus, (A) is incorrect. Although Bard did not have title to Broadacres at the time he entered into the option contract with Cutter, he did own the option to buy the property. By exercising his option under his agreement with Osif, Bard could have obtained title to Broadacres. This, in turn, would have enabled Bard to convey to Cutter, if the latter exercised his option. Thus, Bard could have been compelled to perform. Because Bard is able to perform, and Cutter has exercised his option for purchase of the land, the case is an appropriate one for specific performance. Only (B) reaches this conclusion.

(A) The Statute of Frauds prevents the enforcement of an oral agreement concerning an interest in land.
(B) is wrong because there is no issue as to the record title to the land. The agreement between Ben and Sandy, if it had been reduced to writing, would have been perfectly valid as between them.
(C) is wrong because a joint tenancy can be unilaterally severed.
(D) is wrong because this would not support Sandy's ownership of the entire piece of land.

(D) Approval of the modernization plans by Marina is a condition precedent because without such approval the parties have no agreement. Where there is an oral condition precedent, evidence of the condition falls outside the parol evidence rule. The parol evidence rule provides that where the parties to a contract express their agreement in a writing with the intent that it embody the full and final expression of their bargain, any other expressions, written or oral, made prior to the writing, as well as any oral expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing. Certain forms of extrinsic evidence are deemed to fall outside the scope of the parol evidence rule. For instance, a party to a written contract can attack the validity of the agreement. One way of doing so is by asserting that there was an oral agreement that the written contract would not become effective until the occurrence of a condition. Such a condition would be deemed a condition precedent to the effectiveness of the agreement, and evidence of the condition will be freely offered and received. Here, Yott and Salty have entered into a written agreement that apparently embodies the full and final expression of their bargain. However, Yott's oral statement at the time of entering into the agreement indicates quite clearly that the parties had no agreement absent the approval of Marina, and Salty agreed with this statement. Thus, there is an oral agreement that the written contract would not become effective until the occurrence of a condition precedent. As discussed above, evidence of this oral condition does not come within the purview of the parol evidence rule and is therefore admissible. Consequently, Yott can assert the nonoccurrence of a condition precedent as a way to avoid liability on the contract.

(B) is incorrect because, as explained above, the nature of the oral agreement takes it outside the scope of the parol evidence rule. Therefore, the rule will not be decisive in determining the outcome of this case.

(A) is incorrect because the agreement at issue here is not of a type that is covered by the Statute of Frauds. The agreement does not involve:
(i) a promise by an executor or administrator to pay the estate's debts out of her own funds;
(ii) a promise to answer for the debt of another;
(iii) a promise made in consideration of marriage;
(iv) a promise creating . an interest in land;
(v) a promise that by its terms cannot be performed within one year; or
(vi) a promise for the sale of goods at a price of $500 or more. Therefore, the Statute of Frauds is inapplicable to these facts.

(C) is incorrect because the term 'rules of construction' refers to rules used by courts when interpreting contracts; e.g., contracts are to be construed as a whole, words are to be construed according to their ordinary meaning, or custom and usage in the particular business and locale should be considered. The facts and issues presented by this question do not call for the application of any such principles of contract interpretation.

(C) Where the seller does not deliver or the buyer properly rejects or revokes acceptance of tendered goods, the buyer's basic remedy is the difference between the contract price and either the market price or the cost of buying replacement goods
(cover).

(C) reflects the latter measure of damages.
(A) is incorrect because specific performance is only available where the goods are unique or in other proper circumstances. Here, the wool does not appear to be unique.

(B) is incorrect because it sets forth a measure of damages that is properly applicable where the buyer accepts goods that breach one of the seller's warranties; here, the goods have not been accepted.

(D) is incorrect because, as explained in the answer to the preceding question, agreeing to pay before inspection does not waive any of the buyer's rights.

(C) The unilateral option contract between Plunger and Jenny to keep Plunger's offer open was effectively rescinded by Jenny's expressed intent to make a gift of the obligation owed her. The typical case of rescission involves a bilateral contract where neither party has yet performed; i.e., the duties of both parties are still executory. However, no contract to do the plumbing work has been created yet, because Jenny has not communicated her acceptance of the bid to Plunger. Despite her use of Plunger's bid to prepare her own bid, she is free to award the plumbing work to someone else if she is awarded the general contract. Hence, the contract to do the plumbing cannot be rescinded because it has not been created. Another contract is present under this fact pattern, however. Under section 87 of the Restatement
(Second) of Contracts, Plunger's offer is binding as an option contract because Jenny reasonably relied on it to submit her bid. The option contract here is unilateral: Jenny's acceptance of the option contract by using the bid also constituted performance of her duties under the option contract. In a unilateral contract case, a rescission promise must be supported by either
(i) an offer of new consideration,
(ii) elements of promissory estoppel
(i.e., detrimental reliance), or
(iii) the offeree's manifestation of an intent to make a gift of the obligation owed her. The first two alternatives are absent in these facts, but the gift alternative is indicated by Jenny's statement that she will 'forget' that Plunger ever made the bid. Jenny's response was an effective rescission of the option contract.

(A) is an incorrect choice even though it is a true statement. A discharge of contractual duties by means of a release requires additional consideration or some substitute, such as a signed writing or reliance by the offeror on the discharge. Here there is no additional consideration to support a release, as choice
(A) indicates, but Jenny will not win because a rescission has taken place.

(B) is incorrect because a large dollar amount for purposes of the Statute of Frauds is irrelevant unless there is a contract for the sale of goods, which must be in writing if the goods are priced at $500 or more. The agreement between Jenny and Plunger involved a contract for services, which is not within the $500 provision of the Statute.

(D) is incorrect because, as discussed above, a release requires additional consideration, a signed writing, or detrimental reliance by the offeror. Since none of these is indicated by the facts, a release has not taken place.

(C) Sam's unconditional promise to sell created a contract even if Bob knew of Winnie's interest. When a promise is unconditional, the failure to perform according to its terms is a breach of contract. By not making his promise conditional on Winnie's consent to convey her interest, Sam impliedly undertook to obtain her consent. Therefore, the contract is enforceable.
(Note that this does not necessarily mean that Bob will be able to get the car; he may have to settle for damages because of Winnie's interest.)
(A) is incorrect although partially true. It is true that Sam cannot sell Winnie's half of the car without her consent; however, that does not make the contract here unenforceable. As stated above, by making his promise unconditional, Sam undertook a duty to obtain Winnie's consent to sell the car. His failure to do so is a breach of contract, but a breach does not negate a contract; it merely gives the nonbreaching party a right to certain remedies. Therefore, the contract is enforceable, even if Winnie refuses to sell her interest.
(B) is incorrect because Bob's knowledge of Winnie's interest is irrelevant to the issue of the contract's enforceability. As discussed above, Sam's unconditional promise implied that Sam would obtain Winnie's consent to convey her interest in the car. Therefore, the contract is enforceable regardless of whether Bob was aware of Winnie's interest at the time he signed.
(D) is incorrect because prospective inability is not a ground for discharge. Prospective failure of consideration occurs when a party has reasonable grounds to believe that the other party will be unable or unwilling to perform when due. The prospective inability of performance does not discharge the contract; rather, it allows the innocent party to suspend further performance until he receives adequate assurances that performance will be forthcoming. Therefore, the contract between Sam and Bob is not discharged because of prospective inability of performance.