31 - CONTRACTS MID-TERM EXAMINATION December 2006 Santa Barbara/Ventura Colleges of Law Instructor Craig Smith QUESTION 1 Moe was a collector of

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CONTRACTS MID-TERM EXAMINATION December 2006 Santa Barbara/Ventura Colleges of Law Instructor: Craig Smith QUESTION 1 Moe was a collector of exotic cars. One day he saw an ad in the classified section of the paper for a 1999 Spitfire, a high performance, limited edition automobile. The price listed in the ad was $25,000.00. He called the number in the ad and spoke with the seller of the car, Curly. He arranged to meet Curly to inspect the car and to test drive it. He liked it and stated to Curly, “$25,000.00 is a fair price, however, would you be willing to take $22,500.00 for it?” Curly thought about it for a minute and then said “as long as you pay me in cash within 48 hours.” Moe said “deal” and the two shook hands on it. That night Moe went home and wrote the following letter to Curly “Thanks for agreeing to sell me your Spitfire for $22,000.00, as agreed earlier today, I will have the money in cash for you before the deadline expires. (Signed) Moe.” Curly received the letter the next day and read it. He immediately noticed the discrepancy between the agreed price $22,500.00 and the price in Moe’s letter. Curly thought that Moe was trying to chisel him on the price and was furious. Without further communication he failed to appear to receive the $22,500.00 in cash and refused to sell the car to Moe unless he pays the original asking price of $25,000. 1. Moe decides to sue Curly for failing to sell the car as promised for $22,500.00. In the lawsuit for breach of contract who will prevail and why? 2. Assume that there is an enforceable contract, what damages or remedies would Moe be entitled to?
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QUESTION 2 As a fundraiser for charity, the Sesame Rug Rats Foundation staged the following contest. For $100 per ticket, they sold tickets for a drawing to be held. The grand prize was a house valued at $1 million. To get around state laws that prohibit lotteries, one of the rules of the contest was that anyone who asked for one could receive one of the tickets for the drawing without paying any money. Bert asked for and received one of the tickets without paying for it. On the back of the ticket in 6-point type, the following was written: “No prize will be awarded unless at least 15,000 tickets are distributed. In the event of a dispute regarding the contest rules, ticket holder agrees submit to binding arbitration.” Although Bert glanced at the back of the ticket, he did not bother to read what was written on the back. The day after the drawing was held, Bert went out to buy the local newspaper to find out the results of the contest. In a news article that appeared, Bert read that he was the winner. However, although it appeared in the press release from the
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This note was uploaded on 11/05/2009 for the course MATH 120 taught by Professor Gerogestan during the Winter '08 term at Santa Barbara City.

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31 - CONTRACTS MID-TERM EXAMINATION December 2006 Santa Barbara/Ventura Colleges of Law Instructor Craig Smith QUESTION 1 Moe was a collector of

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