LAW1101 all chapter practice problem self-test Oct 22, 2023
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LAW 1101 – PROF. FOLKS
PRACTICE PROBLEM FROM CHAPTER 4
Angela, a resident of Wisconsin, got into a fist fight with Toni, a resident of New Mexico, while visiting Angela’s relatives in New Mexico. While Angela was arrested for assault and battery, criminal charges were later dropped. Toni decides to file a civil lawsuit and sue Angela claiming
that she suffered $75,000 in total damages.
a)
Toni wants to file this case in a state court in New Mexico. Does the state court in New
Mexico have the authority to hear this case? Fully explain
ANS: Yes, the state court in New Mexico does have the authority to hear this case based on long arm statutes which is used for nonresident parties based on minimum contacts with the state. Minimum contacts to the state can be her fight that took place in New Mexico. Long arm statutes make it so that the court has jurisdiction a party even if they are
from a different state.
b)
Assume that Toni seeks to file the lawsuit in federal court in New Mexico. Does the federal court in New Mexico have the authority to hear this case? Fully explain.
ANS: No, the federal court would not have the authority to hear this case based on the federal diversity of citizenship. Federal diversity of citizenship requires the parties to be from different states and the amount that is being pursued to be over $75,000. In this case, even though the parties are from different states the amount is not above $75,000.
PRACTICE EXERCISE FROM CHAPTER 10
Answer the following True/False.
1.
A unilateral contract is created when performance of the required act is promised.
ANS: F
2.
Express contracts must always be in writing to be enforceable.
ANS: F
3.
Marty visits the Little Eva barbershop, sits in the chair, and, without a word being exchanged, receives a trim from the barber. There is an implied-in-fact contract between Marvin and the barber.
ANS: T
4.
A voidable contract is no contract at all since neither party may enforce the agreement.
ANS: F
5.
An unenforceable contract is the same thing as a void contract.
ANS: F
6.
A bilateral contract is formed when the one receiving the offer completes the requested act or performance.
ANS: F
7.
Both unilateral and bilateral contracts have at least one promisor and one promisee.
ANS: T
8.
A contract must be written to be valid.
ANS: F
9.
Estelle promises Benny the Human Fly that if he climbs to the top of the Washington Monument, she will pay him $1,000. Assuming Benny climbs the monument, this would
be an example of a unilateral contract.
ANS: T
10.
Linda signs an order form for Girl Scout cookies. The form states the number of boxes ordered and the price per box. The contract between Linda and the Girl Scouts is formal and express.
ANS: T
CHAPTER 11/CHAPTER 16 PROBLEM AND EXERCISES
On October 1 Chloe, who had a hobby of collecting art, mailed three separate written letters with offers to sell some of her paintings to her rich friends. She offered to sell a Picasso to Pedro, a Van Gogh to Viola, and a Monet to Michelle, for $3,500,000 each. Chloe informed each in her letters that the offers to them would expire on October 15. Each of her friends received and read their letters on October 8. In each of the following situations, answer whether contracts for the paintings were formed? Fully explain.
(a)
On October 12 Michelle mailed a letter of acceptance to Chloe. On October 13 Chloe called Michelle and told her that she had sold the Monet to someone else. On October 16 Chloe received Michelle’s acceptance letter.
ANS: Yes, a contract was formed on October 12 in this case. The Mailbox Rule suggests that a contract is formed at the time of mailing the letter with the exceptions being if it is mailed through unauthorized means or if it is stated explicitly in the contract that the acceptance letter should be received by a certain time. In this case there is no explicit mention of a receiving date so if Michelle had mailed her letter through authorized means,
then that means a contract was formed.
(b) On October 9 Pedro had a heart attack and died before he had the chance to accept Chloe’s offer. On October 10 Pedro’s assistant, Paul, mailed a letter of acceptance to Chloe’s offer. Chloe received this letter on October 12.
ANS: No, a contract was not formed in this case even though one of the parties’ assistant did send a letter of acceptance. When a party dies before they can agree to the terms of a contract there is a termination of the contract, and it does not stand. It is not indicated that the assistant had the legal authority to accept the contract on behalf of him. A contract can
only be accepted by the offeree themselves or an agent/person that has the legal authority to accept on his behalf.
(c)
On October 10 Viola texted a message to Chloe ‘s cell phone which stated that she would like to purchase the painting if Chloe could possibly lower the price by
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$500,000. Having received no reply from Chloe, on October 12 Viola mailed an acceptance letter and enclosed a certified check for $3,000,000. ANS: No, a contract was not formed here. Viola did not accept to the terms of the original
contract terms stated by Chloe but instead proposed new terms of her own to Chloe which
is known as a counteroffer. Chloe did not accept to the terms of the new offer. For there to
be a contract Chloe must agree to the new terms that Viola proposed, or Viola must send the remaining amount to satisfy the original terms. (d) Would your answer in (c) above be different if Viola had mailed an acceptance letter and enclosed a certified check for $3,500,000? ANS: Yes, if Viola had mailed an acceptance letter and enclosed a certified check for $3,500,000 within the time period Chloe mentioned through authorized means then a contract would be formed because of the mirror image rule wherein Viola accepted to the exact terms of the terms of the contract unequivocally.
CHAPTER 11 EXERCISES WAS A CONTRACT FORMED?
In each case, assume that each event occurred on succeeding days in the order specified. Was a contract formed or not and, if so, on what day? 1(revocable offer).
Day 1 revocation sent
Day 2 acceptance sent (authorized means) Day 3 acceptance received Day 4 revocation received _________________ ANS: A contract was formed on Day 2 because unlike the rule for acceptance letters through the mailbox rule; revocation is considered enforceable at the time of receipt of the
revocation letter which in this case was received after acceptance was hence a contract was
formed on Day 2.
2 (revocable offer) Day 1 revocation sent Day 2 revocation received Day 3 acceptance sent (authorized means) Day 4 acceptance received __________________ ANS: No contract was formed in this case due to the mailbox rule as the revocation letter was received on Day 2 before the acceptance letter was sent on Day 3.
3 Day 1 acceptance sent (authorized means) Day 2 offer (other than option) expires Day 3 acceptance received _________________ ANS: Yes, a contract was formed on Day 1 as the acceptance letter was sent through authorized means before the offer expired.
4 Day 1 acceptance sent (authorized means)
Day 2 time for receipt of acceptance specified in offer expires Day 3 acceptance received __________________ ANS: No, a contract was not formed in this case even though the acceptance was sent through authorized means before the offer expired. This is because of the exception to the mailbox rule, which states that if it is explicitly mentioned in a contract that an acceptance letter must be received before a certain date, then late receipt of the acceptance letter would mean no formation of contract. In this case the letter was received on Day 2 after the time for receipt expired on Day 3.
CHAPTER 11/CHAPTER 16 - IS THE OFFER IRREVOCABLE?
(Can the offer be revoked or withdrawn by the offeror?- Is it an option contract , firm offer
by a merchant or a firm offer by a non-merchant offeror involved?) 1.
Angie calls Ben and offers to sell Ben her house for $650,000 and promises to keep the
offer open for 30 days. ANS: This is a revocable offer. This is not a firm offer because the offer was not in writing
and the parties did not sign terms. This is not an option contract because there was no exchange of consideration for Angie to keep the offer open for 30 days.
2.
Angie speaks to Ben and offers to sell Ben her house for $650,000. Angie says she will
keep the offer open for 30 days if Ben gives her $1000, which he does. ANS: This is an irrevocable offer. This is an option contract where there has been consideration exchanged for Angie to keep the offer open for a specific period of time, Angie has to honor that and keep the offer open for 30 days in this case otherwise Ben can press charges as he had consideration in the form of the $1000 he paid Angie. Option contracts can be oral or written.
3.
Angie sends Ben a letter offering to sell Ben her house for $650,000 and stating that the offer will expire in 30 days if she does not hear from Ben in that time.
ANS: This is a revocable offer. The term “expire” does not suggest that this is a firm offer or an option contract. It just means that when the expiration date ends, the offer is automatically terminated.
4.
Angie sends Ben a letter offering to sell Ben her house for $650,000 and stating that the offer will not be withdrawn for 30 days. ANS: This is an irrevocable offer. This is a firm offer because it is in writing and states that Angie will not withdraw the offer for 30 days. Angie has to honor that otherwise Ben can press charges against her.
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5.
Angie sends Ben a letter offering to sell Ben her house for $650,000 and stating that the offer is irrevocable for 6 months. ANS: This is an irrevocable offer for 6 months. This is a firm offer as it is in writing stating clearly that the offer is irrevocable for 6 months which Angie has to honor as she is a non-merchant, otherwise Ben can press charges against her.
6.
Sandy, a manufacturer of cell phones, calls Bob and offers to sell Bob 100 cell phones at $200 each and tells Bob it is a firm offer for 30 days. ANS: This is a revocable offer as it was done orally, even though she is a merchant there is
no writing stating she will keep the offer for 30 days.
7.
Sandy, a manufacturer of cell phones, sends Bob a letter offering to sell Bob 100 cell phones at $200 each and states that it is a firm offer for 30 days. ANS: This is an irrevocable offer. This is a firm merchant offer as it is in writing and specifically states that the offer is available for 30 days from a merchant (Sandy). Sandy has to honor this otherwise Bob can press charges against her.
8.
Sandy, a manufacturer of cell phones, sends Bob a letter offering to sell Bob 100 cell phones at $200 each and stating that it is a firm offer for 6 months.
ANS: This is a firm merchant offer; it is in writing and is from a merchant. Sandy, however, can revoke the offer after 3 months has passed as under the UCC, merchant offers are irrevocable for 3 months or less but can be revoked after that time has passed.
CHAPTER 12 PROBLEMS
1. Cameron, a building contractor, entered into a written agreement with Octavia, for a new addition on her house for $100,000. After the work was one-half complete, Cameron complained about the rising cost of materials and stopped work. Octavia said to Cameron: “If you go ahead and finish the job, I’ll pay you a bonus of $25,000.” Cameron agreed and
finished the job. Cameron then demanded payment of $125,000, but Octavia refused to pay more than $100,000. a) Can Cameron enforce the promise for the bonus claim? Explain. ANS: No, Cameron cannot enforce the promise for the bonus claim in this case. This is because he has a pre-existing legal obligation to the contract to finish the addition to the house for $100,000. Octavia orally offering to pay a bonus of $25,000 is not enforceable since it was not in written format with her signature on it. There is also a lack of consideration from Cameron for Olivia to pay the bonus as he would still just be fulfilling his pre-existing legal duty, which is not sufficient.
b) Assume that Cameron did complete building the new addition to Octavia’s house and Octavia responded by stating: “You did such an amazing job, so I’m going to give you a bonus of $25,000.” Can Cameron enforce this promise? ANS: No, Cameron cannot enforce this promise. This is due to his consideration already being done before the offer, which is known as past consideration. Cameron can only enforce this promise if there is a written agreement where Octavia signs acknowledging the past consideration.
c) Assume that Octavia had said to Cameron: “If you fix the pavement in front of my house as well as the new addition to the house, I’ll pay you an extra $25,000.” Cameron fixes the pavement in front of Octavia’s house as well as finishes the addition to her house.
Can Cameron enforce the promise to pay the extra $25,000? Explain. ANS: Yes, Cameron can enforce this promise. There was an exchange of consideration wherein Cameron fixed the pavement which was not in the original terms due to Octavia’s promise of the extra $25,000. He was legally not obligated to fix the pavement originally so he sufficiently relied on Octavia’s promise and can enforce this promise.
2) On August 1, 2016, Hassan borrowed $5,000 from his best friend Nigel to help pay for college. Hassan and Nigel made a written agreement in which Hassan agreed to pay Nigel back the $5,000 on his graduation day, June 1, 2020.
a) On June 2, 2020, Hassan called Nigel and informed him that he was so sorry, but he did not have the $5000 that he owed, and he asked if Nigel would agree to accept $3500 as full payment instead. Nigel replied, “Of course, I will accept the $3500. Forget about the remaining $1500. What are friends for?” On June 3rd Hassan paid Nigel $3500. On June 15th Nigel sued Hassan for $1500. Judgment is for whom? Fully explain. ANS: Judgement is for Nigel. This is a liquidated debt (meaning the debt is past its due date) where there is no dispute as to its existence or the amount being paid (undisputed). Liquidated debts cannot be discharged for any amount less than the original amount that the parties decided upon, even if the creditor orally discharges the debt because it is a preexisting legal obligation. The exceptions to this are if the creditor agrees to some new and separate considerations such as less money for an item, if the debtor gets the creditor to sign a written agreement declaring the discharge of the debt, or if the debt is not yet due.
b) Instead of the facts in (a), assume that on the evening of May 31, 2020, Nigel contacted Hassan to remind him of their loan agreement from four years ago and Hassan stated, “What $5000? I do not remember borrowing that much from you. I only owe you $2500.” For the next three weeks Hassan and Nigel argue back and forth, neither coming to an agreement. Finally, Hassan sends Nigel a note attached with a check in the amount of $3500 and writes on the front of the check “PAYMENT IN FULL SATISFACTION OF THIS DEBT.” After receiving the note and the check, Nigel endorses the check and does not put any other notations on the check. Nigel then deposits the check into his savings account. The next day Nigel sues Hassan for $1500. Judgment is for whom? Fully explain.
ANS: Judgement is for Hassan. This is a case of unliquidated debt, debt where there is dispute as to the contract’s existence or the amount. Unliquidated debt can be discharged if
there is accord and satisfaction. In this case, after arguing back and forth for 3 weeks Hassan sent Nigel a check for $3500 and wrote on the front “PAYMENT IN FULL SATISFACTION” which Nigel endorsed to his back after receiving; therefore, an accord and satisfaction had taken place. Nigel would have been able to win if he did not accept the check as it was a full satisfaction check, by endorsing the check to his bank.
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CHAPTER 12 EXERCISE CONSIDERATION
For each of the following, state if there was consideration and whether or not a contract was formed.
1.
A says to B, “I’ll give you $5,000 if you manage my store for a month.” B does manage the store for a month. Is there consideration for A’s promise? ANS: Yes, there is consideration for A’s promise. This is a unilateral contract where B manages the store for a month in exchange for monetary gain of $5000 from A.
2.
A negligently injures B. B has a claim against A. A promises to pay B $50,000 if B promises not to sue. B promises not to sue. Is there consideration for A’s promise? ANS: Yes, there is consideration. This is a bilateral contract where A exchanges a promise to pay B $50,000 in exchange for B’s promise of not pressing charges over A.
3.
B steals A’s iPhone. A promises to pay B $300 if he gives it back. B does. Is there consideration for A’s promise? ANS: No contract will be formed in this case. There is no consideration, and the purpose of the contract would be illegal as B has committed a crime against A which makes it void.
A should press charges.
4.
Uncle told his favorite niece, who is pregnant, “I’ll give you $5,000 if you name the baby after me.” His niece has the baby and names the baby after her uncle. Is there consideration for the uncle’s promise? ANS: Yes, there is consideration. This is a unilateral contract wherein the niece named her baby after her uncle due to the uncle’s promise to pay her $5000 if she names the baby after him.
5.
Alia names her baby after her favorite uncle, Paul. Paul is so delighted that he calls Alia and promises to send her $5,000 the next week. Is there consideration for Paul’s promise?
ANS: No, there is no consideration as this is a past consideration promise. Alia would not be able to enforce this promise as it was a past consideration promise and would only be able to enforce the promise if she had Paul sign an agreement acknowledging the past consideration and him agreeing to pay the $5000.
CHAPTER 13 PROBLEM
On May 15, 2018, Simone came to New York to look for an apartment. She met with Nicholas, the landlord of a building on East 67th Street and orally agreed to rent a studio apartment for $2000/month from him beginning on June 1, 2018 and ending on May 31, 2019. Later that day on May 15, Simone went to meet her best friend, Lucy, who also lived in New York and discussed the new apartment and her lack of having any furniture. Her friend offered to sell Simone her “almost new” couch that Simone had previously complimented. Simone orally agreed to purchase the couch for $550. On June 1, 2018, Simone moved into the apartment. On June 3, 2018, Simone decided that she did not want to live in New York any longer and called Nicholas informing him that she no longer wanted to rent the apartment. Also, on June 3, 2018, Simone called Lucy telling her that she no longer needed the couch. In the following questions assume that Simone will plead whatever affirmative defenses are available to her. a)
In an action by Nicholas against Simone for breach of contract, judgment for whom? Explain fully. ANS: Judgement is for Nicholas. Even though Simone can argue that there was no written agreement between the two parties, judgement would still be for Nicholas. Under the Statute of Frauds there is a rule called the one-year rule which states that contracts that by their terms cannot be performed withing one year from the day after the date of formation need to be in writing, anything under that can be orally done. In this case, the lease was for
11 months and not a full year, which means it was eligible to be made orally and that Simone has breached the contract.
b)
In an action by Lucy against Simone for breach of contract, judgment for whom? Explain fully.
ANS: Judgement is for Simone. Lucy cannot enforce the contract and press charges against Simone because she made the contract orally, under the UCC any sale of goods over $500 falls under the Statute of Frauds and need to be in writing for there to be evidence, there are no exceptions in this case as it is the same for everyone (merchants and
non-merchants alike). In this case the good was priced at $550.
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