Unformatted text preview: ar gasoline to Norma’s Gas City for a year at a fixed price of $3.00 per
gallon. A month into the contract, armed conflict once again erupts in the
Persian Gulf and the price of crude oil increases by 50 percent over a short
period of time. Noxxe Oil, which can still find all the oil it needs on the spot
market but at a much higher price than originally anticipated, asks Norma if
she would be willing to agree to a temporary $1.00 per gallon increase to help
defray part of its increased costs. Norma agrees to the temporary increase
and begins paying the higher price immediately.
A. If Norma changes her mind a month later, can she enforce the original
B. Would your answer be the same if this were not a contract for the sale of
goods (e.g., a service contract or a contract to purchase real estate)? Why?
C. If Norma refuses to accept the higher price, will Noxxe be able to force
her to do so?
Case 5. Joan agrees to sell her business product inventory to Kari for $250,000. When
the parties set down the terms of the agreement in a signed writing, the
amount is mistakenly written as $25,000. Neither party notices the mistake at
the time that the contract is signed.
A. If Kari wants to enforce the contract as written, will Joan be able to present parol evidence to explain that a mistake was made?
B. If Joan purposely writes down $350,000 as the consideration to be paid
for her business inventory on the written agreement and gets Kari to
sign it, can Kari present parol evidence to prove the price agreed to was
$250,000? Why? rog80328_07_c07_134-156.indd 155 10/26/12 5:52 PM Section 7.6 Chapter Summary CHAPTER 7 C. Would your answer be the same if Joan held a gun to Kari’s head as she
signed the contract?
D. If Kari claims that at the time the contract was signed Joan orally agreed
that she would have the inventory packaged at Joan’s expense, can Kari
present witnesses’ testimony to this effect? Key Terms
admission When a party admits in pleadings, in testimony, or otherwise under
oath pursuant to a legal proceeding that a
promise was made.
confirming memorandum A written
document that contains the material terms
of an agreement, generally sent after an
oral agreement was made.
goods Tangible, movable objects that can
be owned. statute of frauds A law that specifies
that certain types of contracts must be in
unconscionable contract An agreement
with grossly unfair terms that usually
involves a situation where the parties
do not have equal bargaining power. An
unconscionable contract can be voided at
the court’s discretion. merchant A person who regularly deals in
good of the type involved in the contract. rog80328_07_c07_134-156.indd 156 10/26/12 5:52 PM...
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