| Contract Basics |
| #1 |
What is a promise or set of promises for the breach of which the law gives a remedy? |
Contract |
| #2 |
What is the legally enforceable agreement between two or more parties to exchange something of value? |
Contract |
| #3 |
Breach of contract occurs when what happens? |
One of more parties to a contract fails to live up to the promises made in the contract |
| #4 |
Rock Company offers to sell Concrete Company all of the gravel it needs in making concrete for the next fiscal year for $1/pound. Concrete Company accepts the offer and the deal is put in writing. Is this a valid contract? Why or why not? |
Yes it is a valid Requirements Contract (between business) |
| #5 |
In contract formation, both parties must be competent, there must be a mutual agreement (meeting of the minds), and which other important element must be present? |
Consideration (each side must give something of value) |
| Offer & Acceptance |
| #1 |
The requirement that a positive "mirror image" response must be given, that is timely, and communicated to the other party are all elements of what? |
Acceptance |
| #2 |
The requirement that terms must be reasonably definite or certain, the parties must have the intention to be legally bound, and communication to the other party are all elements of what? |
Offer |
| #3 |
Which article of the Uniform Commercial Code governs sales? |
Article Two |
| #4 |
Josie jokingly said that she would sell her house to Tim for $5 because he was such a “good guy.” Tim said, “I accept the offer,” and handed her a $5 bill. Was this a valid offer and acceptance? Why or why not? |
No, all of the elements of acceptance were met but not all of the elements of offer (both parties did not have the intention to be legally bound) |
| #5 |
Jeremy promises to donate $400 to his church over the course of the year but gives the church $0. Why will courts enforce his promise? |
Public Policy (favors enforcing promises to religious institutions and charities) |
| Offer & Acceptance Scenarios |
| #1 |
John offers to sell Louis five dozen baseballs for $100. 10-minutes later Louis says that he would like to buy the baseballs but that he will only pay $80. Did Louis effectively accept John’s offer? Why or why not? |
No, all of the elements of offer were met but not all of the elements of acceptance (a counteroffer is a rejection and a new offer) |
| #2 |
On Monday Harold offered to sell his signed 1995 Atlanta Braves team poster to Smith for $300. Smith thought it was a great deal and mailed a check to Harold on Thursday, noting in the memo section of the check: “Awesome Deal! Thank You!” Was this a valid offer and acceptance? Why or why not? |
Yes, all elements of offer and acceptance were met (acceptance was the moment it entered into the custody of the postal service) |
| #3 |
On Monday Harold offered to sell his signed 1995 Atlanta Braves team poster to Smith for $300. On Tuesday Harold changed his mind before Smith had a chance to think about the offer, informing him: “I rescind the offer.” Smith mailed a check to Harold anyways on Thursday. Did Harold effectively rescind his original offer? Why or why not? |
Yes, he rescinded the offer in a timely fashion (before acceptance was made) |
| #4 |
On Monday morning Harold offered to sell his signed 1995 Atlanta Braves team poster to Smith for $300. Smith thought it was a great deal and mailed a check to Harold on Monday afternoon, noting in the memo section of the check: “Awesome Deal! Thank You!” On Tuesday Harold changed his mind and informed Smith: “I rescind the offer.” Did Harold effectively rescind his original offer? Why or why not? |
No, Harold did not effectively rescind the offer due to the mailbox rule |
| #5 |
On Thursday, Trudy accepted an offer from the Boston Bruins to sing the Star Spangled Banner before every Bruins home game next season in exchange for $50,000. This was put in writing. On Friday Reneé informed the Bruins that he accepted the team’s offer to sing the national anthem the following season for $40,000. This was also documented in a writing. Who will sing the anthem next season? Explain. |
It is unclear, but what is clear is that the Bruins will breach at least one contract because both Trudy and Reneé have valid contracts with the Bruins |
| Consideration |
| #1 |
Each party in a contract must receive something of value. What is this known as? |
Mutual Consideration |
| #2 |
Is past consideration good consideration in the context of contract law? Explain. |
No- it was not concurrent with the formation of a contract |
| #3 |
Consideration can be a promise or act in exchange for a promise, a forbearance, or what else? |
Act |
| #4 |
Erik promises to buy Kim a new car for her birthday. He fails to do so. Why wiill Kim lose in a lawsuit against Erik for breach of contract? |
Gifts cannot be contracts (lack of mutual consideration) |
| #5 |
Penelope was a life guard and she saved little Jonny’s life. Because he was so grateful for the rescue, Jonny’s dad promised to pay for Penelope’s college. Is this valid consideration? Why or why not? |
Past consideration is not valid consideration (Consideration must be mutual at the time the contract is made) |
| Contract Defenses |
| #1 |
One of the requirements of forming valid contracts is that both parties are competent. What does competency mean in this context? |
Having the capacity to make legal decisions on one’s own behalf |
| #2 |
Francine is a hot tub dealer. She urges and persuades her 102-year old grandmother to purchase a high-end hot tub from her for $18,000 even though her grandmother is confined to her bed. Francine receives a significant commission for making the sale. Was there genuine assent present at the time of the agreement? Why or why not? |
No, there is no genuine assent due to undue influence |
| #3 |
Trent sells designer purses and claims to be an official name-brand dealer. However, he actually obtains cheap knock-off purses from China for a tiny fraction of the cost of genuine designer purses. He then sells them to the public as if they were the designer purses with logos, paperwork, and everything you would expect when buying a name-brand purse. Can Trent sue Vixen when she refuses to make any more payments? Why or why not? |
No, there is no genuine assent due to fraud |
| #4 |
Valentino approaches Carl and puts a gun to his back. He says Carl you will sign this contract or else I will put a bullet in your spine. Carl signs the contract. Will Valentino win when he sues Carl for breach of contract? Why or why not? |
No, there is no genuine assent due to duress |
| #5 |
Adrianne is 16 but very mature. She babysits, works odd jobs for her neighbors, and has created webpages for dozens of local companies. One day Adrienne enters into a contract with a company to maintain the company’s network, manage network security, and to maintain the website. She signs a contract for three years at the annual salary of $25,000. Midway through the second year of the contract, when Adrienne is 17, she is accepted into college and wants to end the contract. Can Adrienne elect to end this contract and go to college? Why or why not? |
Yes, Adrienne was a minor when she entered into the contract so the contract is voidable by her |
