32 - CONTRACTS MID-TERM EXAMINATION Santa Barbara College...

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CONTRACTS MID-TERM EXAMINATION Santa Barbara College of Law Fall 2003 Instructor: Craig Smith QUESTION 1 John and Mary Jones (the Jones’) submitted an offer for $180,000 to American Savings to purchase a house in Woodland Hills, which American Savings had taken back through foreclosure. At about 8:45 or 9 a.m. on the morning of June 6, 2003, the Jones’ received a response to their offer from American Savings containing several additional terms and conditions, but with no mention of purchase price. According to Mary Jones, she immediately drove to her husband's jobsite where she and her husband signed this response at 9:40 a.m. that day. She then drove to her office, typed an envelope with the proper address, placed the response in the envelope, and before 10 o'clock that morning, she handed it to the mail clerk at her office, instructing him to mail it for her. The clerk immediately ran the letter through a postage meter. He then placed the letter in a mailbag in the mailroom. It sat there until 9 a.m. the following day, when the mail clerk took the bag and placed its contents into a U.S. Postal Service mailbox in front of his building. The letter sat in the mailbox until 1 p.m. when the postal service worker picked it up. Meanwhile, at approximately 11 a.m. on June 6th, Mary Jones had a telephone conversation with American Savings in which American Savings said the response was in error, since American Savings had intended to increase the sales price to $198,000. American Savings also advised the Jones’ that because of this error, the response was no longer effective. The envelope in which the signed response was mailed to American Savings was postmarked June 7, 2003, not June 6. According to the Domestic Mail Manual of the United States Postal Service, section 144.471, the date shown in the meter postmark of any type of mail must be the actual date of deposit. Section 144.534 of the manual provides that metered mail bearing the wrong date of mailing shall be run through a canceling machine or otherwise postmarked to show the proper date. Discuss fully the following:
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Was a contract formed between the Jones’ and American to purchase the house at $180,000.00? 2. Assume that a contract was formed. Can the Jones’ force American to sell the house to them?
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QUESTION 2 Moe approached Curly about purchasing a building in a business park. Moe made clear to Curly his need for a floor with a loading capacity of at least 750 pounds per square foot. In response, Curly provided Moe with plans and specifications it had given to the builder of the building. These specifications called for a five-inch concrete slab on grade floor reinforced with wire mesh and, in addition, described the required soil compaction. Curly stated that he was certain the floor would meet Moe’s requirements because the soil was well compacted and the floor's average depth was at least five inches. When the parties agreed to the sale of the property, a written contract was prepared by Moe’s attorneys.
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32 - CONTRACTS MID-TERM EXAMINATION Santa Barbara College...

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