Part One—True or False (2 points each)
- 1.______ An assignee takes more rights than the assignor originally had.
- 2.______ An assignee is the party who transfers the right to receive performance.
- 3.______ The most common award for breach of contract is specific performance.
- 4.______ A liquidated damages clause may sometimes be held unenforceable because is considered a penalty.
- 5._______ Duties that are personal in nature generally cannot be delegated.
- 6._______ Parol evidence may be allowed to explain an ambiguity.
- 7._______ A contract for the sale of a small parcel of remote land for $450.00 does not have to be in writing to satisfy the statute of frauds.
- 8._______ A lease for a term of more than one year must be in writing to satisfy the statute of frauds.
- 9.________ A mutual mistake of value exists if both parties know the value of a contract, but are mistaken as to the subject matter.
- 10._______ A material fact is one that is not very significant to the subject matter of a contract.
- 11._______ When proving duress to avoid a contract, the plaintiff must show he had no practical alternative but to acquiesce to the other party’s threat.
- 12._______ The law allows rescission of some contracts where there is mutual mistake.
- 13._______ A collateral or guaranty contract must be in writing to be enforceable.
- 14._______ A promise to “work for Alex until Alex dies” is a contract that cannot be performed within one year.
- 15._______ In the U.S. when a party wins a breach of contract suit, courts typically order the losing party to pay the winning party’s attorney fees.
- 16.________ An incidental beneficiary of a contract may sue the breaching party to recover for injury.
- 17.________In Lucy v. Zehmer, which appears in your text, and was discussed in class, the seller ultimately won the case because the contract was not in writing.
- _18.______Generally, a catalogue listing with description and price is considered an offer by the sender of the catalogue.
Part Two—Fill in the Blanks (2 points each)
(19) A ______________________ damages provision in a contract specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract.
(20) If a plaintiff wins a breach of contract case, but is unable to prove he was damaged by the breach, the court will typically award ________________________ damages.
(21) The essential feature of the agreement to void a contract on the grounds of ____________________________ is that the party being taken advantage of did not exercise free will in entering into the contract.
(22) When a condition operates to terminate a party’s promise to perform under a contract, it is called a condition __________________________.
(23) A condition that must be fulfilled before a party is required to perform under a contract is called a condition __________________________.
(24) To be valid, an offer must be communicated to the _______________.
(25) A _____________is a rejection of an offer and the simultaneous making of a new offer.
(26) A contractor who completes a building to specification but is one week late in completing the building has ____________performed the contract.
Part Three—Problems (8 points each)
- A. Nano Corp. offers to sell a robotic device to Motor Assembly, Inc. for $15,400.00, but mistakenly transposes some of the digits in the price so in the written offer it appears as $14,500.00. Motor Assembly, Inc. accepts the offer. Can Nano avoid the contract? Why or why not?
- B. Morell bought a security guard business from Conley, including the real property on which the business was located. Neither party knew that underground storage tanks were leaking and contaminating the property. Sometime after the sale, the county advised Morell that it had discovered the leaking tanks; and that the leaks were contaminating Morell’s property and neighboring property. The value of the land was therefore substantially diminished. Morell sought to rescind the contract with Conley on the ground of mutual mistake. Will Morell prevail? Why or why not?
- C. Ambrose hires Bierce for $25,000.00 to supervise the production of Ambrose’s crop, but then breaks the contract by firing Bierce at the beginning of the season. A nearby grower offers Bierce $23,000.00 for the same growing season, but Bierce refuses to take such a pay cut. He stays home and sues Ambrose. How much money, if any, will Bierce recover from Ambrose and why?
- D. Roberta offers to sell certain land to Emily for $10, 000. This offer is made by a letter, signed by Roberta and mailed on March 1, 2008. The letter also stated that the offer would be kept open until July1, 2008. About two weeks later, Roberta sent Emily another letter in which she revoked her offer. On June 15, after she had received both letters, Emily wrote to Roberta accepting her offer of March 1. Discuss in detail whether there is a valid contract between Roberta and Emily. Discuss the mailbox rule.
E. Garage Doors of Rockville contracts to purchase $50,000.00 worth of remote garage openers from Remotes R US. Remotes R US fails to deliver on the contract. Garage Doors purchases the garage door openers from another vendor for $55,00.00. Two months later, Remotes R US attempts to deliver the openers and Garage Doors of Rockville refuses delivery. Remotes sues Garage Doors for $50,000.00. Garage Doors counter-sues for $50,000.00 plus its attorney fees. Who will prevail and what amount of damages will be awarded?
F. Andrea is a real estate agent with a thriving business selling houses, but Andrea does not have a license as required by the State of Virginia. Andrea and George agree that Andrea will attempt to sell George’s house for him in exchange for a commission of 6% of the selling price. Andrea sells the house for George, but now George learns that Andrea did not have a real estate license and refuses to pay her the agreed commission. Andrea sues George for the commission. Who will prevail? Why?