law study guide-unit 2
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law study guide-unit 2

Course: BIBI 111, Spring 2013

School: Maranatha

Word Count: 2307

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National Steel, Inc., and Overland Transport Company enter into a contract. Superior Oil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of privity. Jill and Kurt enter into a contract under which Jill agrees to pay Kurt $125 for a new briefcase. Kurt's transfer of his right to receive this payment is an assignment. Pat, a world famous...

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Steel, National Inc., and Overland Transport Company enter into a contract. Superior Oil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of privity. Jill and Kurt enter into a contract under which Jill agrees to pay Kurt $125 for a new briefcase. Kurt's transfer of his right to receive this payment is an assignment. Pat, a world famous musician and composer, agrees to give ten piano lessons to Quinn in exchange for $1,000. Pat's attempt to delegate his contract to Ruth, an inexperienced pianist, will probably be prohibited because Pat and Ruth have very different skill levels Uma makes a contract with Val with the intent to benefit Wat. This is a third party beneficiary contract. Protective Finishes, Inc. (PFI), agrees to paint Quinn's house, using a particular brand of "discount" paint. PFI completes the job but uses a different brand of discounted paint of the same quality. This is most likely substantial performance Jean contracts to sell her backhoe to Kyla for $2,000. Before performing, Jean and Kyla decide to cancel the deal. This is an example of a rescission. Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 percent. Diners' best argument for avoiding payment to Eagle is that the law has rendered performance of the contract illegal. Flo agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract. Flo's estate is discharged from any contractual liability. Kris contracts to work exclusively for Local Company during May for $5,000. On April 30, Local cancels the contract. Kris finds another job during May but earns only $3,000. Kris files a suit against Local. As compensatory damages, Kris can recover $2,000. Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000, but Regal fails to deliver. Pam buys the computer elsewhere for $6,500. Pam's measure of damages is $1,500 plus incidental damages. Outstate Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain nothing more. Carol pays Dick $10,000 for Dick to design an advertising campaign for Carol's health club. The next day, Dick tells Carol that he has accepted a job in New York and cannot design the campaign. Carol files a suit against Dick. Carol can recover$10,000. Loyal Engineers, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Loyal tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. The maximum that Loyal can recover is$10,000. Great Hardware Store agrees to hire Holly for one year at a salary of $500 per week. When Great cancels the contract, Holly spends $100 to obtain a similar job that pays $450 per week for a year. Holly is entitled to recover the difference between the wages at the two jobs plus $100. Bob contracts to work for Central Construction Corporation (CCC) during July for $4,500. On June 30, CCC cancels the contract. Bob declines a similar job with Design Builders, Inc., which would have paid $4,000. Bob files a suit against CCC. As compensatory damages, Bob can recover500. Business Office, Inc., hires Carl to repair a computer on site for $400, but Carl does not show up as agreed. Business Office hires Dan to do the job for $350. Business Office may recover from Carl nominal damages. Lou and Mira want to rescind their contract under which Lou sold a laser printer to Mira for $200. To rescind the contract Lou must return the $200 and Mira must return the printer On April 1 Roy contracts to sell his Double-R Ranch to Sam and close the deal on May 1. On April 20, Roy tells Sam that he will not go through with the deal. Sam files a suit against Roy. Sam can recover the Double-R Ranch. A contract for a sale of land from Best Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is reformation. Applied Services, Inc., contracts with Bankers Corporation, which breaches their contract. Applied has several remedies available. Under the common law, Applied must elect which remedy to pursue. A contract is formed when two parties promise to perform a future act.T Parties with contractual capacity may form an enforceable contract T An offer to form a unilateral contract is accepted by a promise to perform F A unilateral contract is formed when the one receiving the offer completes the requested act or perfomance. T An offer may not be revoked before it is acceptedF Parties can form a contract without putting the terms in writingT An executory contract is one that has been fully performed F A party who confers a benefit on someone else unnecessarily can recover the cost under the principle of quasi contract.F A void contract is enforceable if it is in writingF The doctrine of quasi contract applies only if there is an actual agreement communicated between the parties.F A promise to do some specified thing in the future is an offer T An offeror's subjective beliefs determine his or her intent to contract F An invitation to negotiate always constitutes a valid offer F All offers are irrevocable. F An offeree's rejection of an offer terminates it T A counteroffer does not terminate but continues an offerF If an acceptance of an offer is received after the offer has been rejected, there is no contract. T Consideration must be given as part of a bargained-for exchange to create an enforceable contract. T An obligation is enforceable only if it is supported by past consideration.F Promissory estoppel requires reliance of a substantial and definite character.T A minor can disaffirm a contract only after reaching the age of majority.F If a minor disaffirms a contract, he or she must disaffirm the entire contract.T Disaffirmance is the legal avoidance of a contractual obligationT Food is the only thing that courts have been willing to define as "necessary F A person who enters into a contract when he or she is intoxicated can void the contract only if the intoxication was involuntary.F A lender who makes a loan at a rate below the lawful maximum commits usury F A covenant not to compete is never enforceable F An exculpatory clause may be viewed as unconscionable T f an illegal contract is executory, either party can enforce it F Only a mistake of fact allows a contract to be avoided T An innocent party can rescind a fraudulent contract T An innocent party may not seek damages for an resulting injury from fraud. F An expert's statement of opinion may be subject to a claim of fraud T Reliance on a misrepresentation is required in an action based on fraud T A contract entered into under undue influence is voidable T Under the Statute of Frauds, all promises must be writing to be enforceable F The Statute of Frauds requires that statutes must be in writing F A contract must be in writing to be enforceable if performance is impossible within one year T No collateral promise must be in writing to be enforceable F If the party against whom enforcement of an oral contract is sought admits in court to its existence, the contract is enforceable T Newt and Odell enter into a bilateral contract, which is created when Newt gives a promise in exchange for Odell's promise. Jill offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can accept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jill will have formed a unilateral contract. Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "a conditional employment offer." Based on the court's reasoning in Case 7.1, Ardito v. City of Providence, this letter is a unilateral contract that Lana can accept by passing the exam. Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have an express contract Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it up so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed an implied-in-fact contract. Beth claims that her contract with Carl is voidable. If the contract is avoided both parties are released from it Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely voidable. Curt promises to buy illegal copies of CDs and DVDs from Donna, who promises to deliver on May 1. These promises are most likely void. Guy, an officer of Hi-Sales Corporation, makes overtures to Ilsa, a representative of Jiffy Distribution, Inc., regarding a business deal. Under the objective theory of contracts, Guy's words and conduct mean what a reasonable person in Ilsa's position would think that they meant. Amber offers to buy a laser printer, with a case of paper and an extra cartridge, from Best Office Products for $200. Cris, Best's representative, says, "OK, but no paper and no extra cartridge." Cris has rejected the offer and made a counteroffer. Rita offers to sell an MP3 player to Steve, but receives a letter of acceptance from Tony. A valid contract exists between none of these choices. Andy offers to sell Barb ten computers for her office. Barb sends a rejection first, then later changes her mind and sends an acceptance. Whether they have a contract is determined by whether Barb's rejection or acceptance is received first. Alan promises to pay Beth $500 to install a pump in his factory. Beth completes the installation. The act of installing the pump is the consideration that creates Alan's obligation to pay Beth. Paul offers Rita $1,000 for her $5,000 computer. Rita knowingly and voluntarily agrees to the offer but later sues Paul. A court would likely not question the adequacy of the consideration. Auto Body Repair Shop (ABRS) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and quits his job with Car Care Service. ABRS fails to provide a job for Ben. Ben has a cause of action based on promissory estoppel. Nora signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Nora does not take possession or make payments. Most courts would hold that she had disaffirmed the contract. Clay, a minor, signs a contract to buy a car from Delta Motors by misrepresenting his age as twenty-one. Clay fails to make the payments. Delta sues. In most states, Clay can return the car and avoid further liability. Alan, a minor who is under his parents' care and control, signs a contract to rent an apartment from Bob for one year. Before the end of the term, Alan moves out. Bob sues for the rent for the rest of the term. Alan can disaffirm the contract and avoid liability for the rent. Jack, a minor, takes out an automobile insurance policy and pays a $1,000 premium. If Jack disaffirms the contract, he can most likely recover $1,000. While a minor, Jason buys a car that he continues to use and keep in repair after reaching the age of majority. Jason has ratified the contract Lara is a real estate broker licensed only in Minnesota. Lara concludes a sale in North Dakota. She can successfully sue to neither collect the commission nor keep it. Lora signs a covenant not to compete with her employer, Midstate Distribution, Inc. The covenant will be enforced if it if it is reasonable with respect to geographic area and time. A contract between Kim and Larry to lease real property contains an exculpatory clause. This clause is generally unenforceable. Able Corporation agrees to buy 1,500 acres of land from Baker Properties, Inc. If the actual plot is smaller than Able and Baker believe, Able may avoid or enforce the contract. Dill, a salesperson for Excel Autos, promises Fern that a certain car will give her a "smooth ride." Dill offers a test drive, which Fern declines. She buys the car but soon realizes that its suspension is in poor condition. Fern was not defrauded. Andy and Business Company (BC) enter into an oral contract under which Andy agrees to clean BC's office for two years. This contract is enforceable by neither party. Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro's letterhead that summarizes the items on which they agreed, including a two-year term. NFC begins to perform, but Macro refuses to pay. one-year rule. Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro's letterhead that summarizes the items on which they agreed, including a two-year term. NFC begins to perform, but Macro refuses to pay. a written contract. Pacific Applications, Inc., and Quality Resale Company (QRC) enter into an oral contract for Pacific's sale to QRC of six used forklifts for $4,900 each. Before QRC takes possession of the items, this contract is enforceable by neither party. While intoxicated, Tim contracts to buy a bicycle for double its normal price. The contract is enforceable only if Tim understood its legal consequences.

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