Assignment 5 exercises

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Old Dominion University *

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412

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Law

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Feb 20, 2024

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1. Able writes to Baker: “I will mow your lawn for $20.” If Baker accepts, is this an express or implied contract? If Baker were to accept, this would be an express contract since the terms are written and both parties are clearly aware of what is being agreed upon. 2. Able telephones Baker: “I will mow your lawn for $20.” Is this an express or implied contract? If Baker were to accept then this would still be an express contract since the terms of the job are clearly spelled out verbally. An express contract can be made either in written or oral form. 3. What is the difference between a void contract and a voidable one? A void contract is a contract that is not enforceable by either party at any time during the contract period regardless of what either party does. Generally, there is something illegal about the contract or some other legal condition has not been met. A voidable contract is a contract where it will remain valid until one of the parties decides they want to cancel the contract for whatever legal reason they wish to cancel it by. 4. Carr staples this poster to a utility pole: “$50 reward for the return of my dog, Argon.” Describe this in contractual terms regarding explicitness, mutuality, enforceability, and degree of completion. Explicit: This would be an express contract since the terms are clear and spelled out. You, the finder, would get $50 if you return the owner’s dog. Mutuality: This would be a unilateral contract since it is a one party would perform an act in exchange for a promise. In this case the owner promises to pay a $50 reward for someone to perform the act of returning their dog. Enforceability: This would be a voidable contract such that the party that originally agreed to perform the act could for whatever reason decide to cancel their agreement and not find the dog. It can also be that the promisor refuses to pay thus cancels the contract if the performer fails to find the dog. Degree of Completion: This would be an executory contract such that if the performer finds the dog they have partially executed the contract and once the promisor pays the reward then the contract would be fully completed. 5. Is a voidable contract always unenforceable? No, since a voidable contract would initially be considered legal and enforceable. If one party determines there was misrepresentation or fraud then that party may cancel the contract and it would be considered unenforceable. 6. Contractor bids on a highway construction job, incorporating Guardrail Company’s bid into its overall bid to the state. Contractor cannot accept Guardrail’s offer until it gets the nod from the state. Contractor gets the nod from the state, but before it can accept Guardrail’s offer, the latter revokes it. Usually a person can revoke an offer any time before it is accepted. Can Guardrail revoke its offer in this case? Guardrail can revoke its offer since the contractor was unable to accept the offer from Guardrail, an offer that was dependent on the contractor securing the bid the contractor made with the state. Since the state revoked they offer to the contractor before the contractor could accept Guardrail’s offer then Guardrail can revoke their offer since the contractor never formally accepted the offer despite the offer having been made previously.

1. a. Mr. and Mrs. Smith, an elderly couple, had no relatives. When Mrs. Smith became ill, the Smiths asked a friend, Henrietta, to help with various housekeeping chores, including cleaning and cooking. Although the Smiths never promised to pay her, Henrietta performed the chores for eighteen months. Henrietta now claims that she is entitled to the reasonable value of the services performed. Is she correct? Explain. No, Henrietta is not correct in her claim that she is entitled to the reasonable value of her services that she rendered. She performed the services that the Smiths had requested with no promise of payment made by the Smiths and there was at no time during those 18 months that Henrietta had mentioned that she was expecting payment. After 18 months, the contract they were operating under was a verbally agreed upon implied contract with no expectation of payment to be rendered for Henrietta’s services. Henrietta’s actions implied that she would perform the requested services at no charge thus the Smith’s had rightfully assumed that she was donating her time for her services. It would have been prudent of Henrietta to mention payment from the Smith’s prior to her performing the requested services. b. Assume instead that the Smiths asked Mrs. Smith’s sister, Caroline, who lived nearby, to help with the housekeeping. After eighteen months, Caroline claims she is entitled to the reasonable value of the services performed. Is she correct? Explain. As in Henrietta’s case, Caroline would not be entitled to payment for services she performed over the previous 18 months unless she had some form of agreement with the Smith’s regarding payment for her services. If Caroline agreed to provide the services requested by the Smith’s and she had in fact mentioned payment with their agreement, then she would otherwise be entitled to payment. As with Henrietta’s situation, if she performed the services requested then it would be considered a verbally agreed upon implied contract without the expectation of payment therefore Caroline would again not be entitled to payment and her services would be considered a donation of her time just like Henrietta. A letter from Bridge Builders Inc. to the Allied Steel Company stated, “We offer to purchase 10,000 tons of No. 4 steel pipe at today’s quoted price for delivery two months from today. Your acceptance must be received in five days.” Does Bridge Builders intend to create a bilateral or a unilateral contract? Why? Bridge Builders intends to create a bilateral contract. This is because each party promises to perform an action, and each will become the recipient of said actions. If both agree to the terms of the contract, then Allied Steel Company will deliver 10,000 tons of No. 4 steel pipe in two months and receive payment and Bridge Builders will pay the quoted price from when the contract was agreed to and receive the steel. Roscoe’s barber persuaded him to try a new hair cream called Sansfree, which the barber applied to Roscoe’s hair and scalp. The next morning Roscoe had a very unpleasant rash along his hairline. Upon investigation he discovered that the rash was due to an improper chemical compound in Sansfree. If Roscoe filed a breach of contract action against the barber, would the case be governed by the Uniform Commercial Code or common law? Explain. This case would likely be governed by common law since the principles of common law will typically govern contracts for services in this case and the Uniform Commercial Code will typically govern the sale of goods in this case. Since the barber had provided Roscoe a service by applying Sansfree to his scalp then common law would apply sine Roscoe did not directly buy the product, Sansfree, and apply it himself. Rachel entered into a contract to purchase a 2004 Dodge from Hanna, who lived in the neighboring apartment. When a dispute arose over the terms of the contract, Hanna argued that, because neither

she nor Rachel was a merchant, the dispute should be decided under general principles of common law. Rachel, on the other hand, argued that Hanna was legally considered to be a merchant because she sold the car for profit and that, consequently, the sale was governed by the Uniform Commercial Code. Who is correct? Explain. Hanna is correct in this situation. The Uniform Commercial Code (UCC) generally only applies to persons that are familiar with a particular business therefore they would be considered merchants as defined by the UCC. Since neither Rachel nor Hanna are familiar with the standard industry practices in dealing with the sale of motor vehicles they can not be defined as merchants according to the UCC therefore any dispute they have will be governed by common law. Lee and Michelle decided to cohabit. When they set up house, Michelle gave up her career, and Lee promised to share his earnings with her on a fifty-fifty basis. Several years later they ended their relationship, and when Lee failed to turn over half of his earnings, Michelle filed suit on the basis of Lee’s promise. What kind of contract would Michelle allege that Lee had breached? Explain. The kind of contract that would have been breached would be an implied contract along the lines of common-law marriage if Lee and Michelle lived in a state that recognized common-law marriage. Since their intentions were to act and live together as if they were married then the courts would treat this case in a manner similar to that of a marriage couple going through a divorce and would divide financial assets accordingly. Harry and Wilma were divorced in 2008, and Harry was ordered in the divorce decree to pay his ex-wife $10,000. In 2009 and 2010 Harry was hospitalized, incurring $3,000 in bills. He and Wilma discussed the matter, and Wilma agreed to pay the bill with her own money, even though Harry still owed her $5,000 from the divorce decree. When Harry died in late 2010, Wilma made a claim against his estate for $8,000 (the $3,000 in medical bills and the $5,000 from the decree), but the estate was only willing to pay the $5,000 from the decree, claiming she had paid the hospital bill voluntarily and had no contract for repayment. Is the estate correct? Explain. The estate would be correct in this situation. A unilateral contract had been established between Harry and Wilma and that Wilma was the one who perform the act in this case where she provided her own money to pay for Harry’s medical bills. Based on the information presented there was no promise of repayment by Harry therefore the estate is not required to repay Wilma for the medical bills, however, they are still required to pay the remaining money from the divorcee decree. Unless Wilma can in fact prove that there was a promise for repayment then she will only receive the remaining money from the divorce decree. Louie, an adult, entered into a contract to sell a case of scotch whiskey to Leroy, a minor. Is the contract void or voidable? Explain. The contract between Louie and Leroy would be voidable since Leroy is a minor. Since according to the law, Leroy would be seen as being incapable of entering into a contract since he is a minor therefore he can refuse to fulfill the terms of the contract and Louie will be unable to take any legal action against him. James Mann owned a manufacturing plant that assembled cell phones. A CPA audit determined that several phones were missing. Theft by one or more of the workers was suspected. Accordingly, under Mann’s instructions, the following sign was placed in the employees’ cafeteria: Reward. We are missing phones. I want all employees to watch for thievery. A reward of $500 will be paid for information given by any employee that leads to the apprehension of employee thieves.

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—James Mann Waldo, a plant employee, read the notice and immediately called Mann, stating, “I accept your offer. I promise to watch other employees and provide you with the requested information.” Has a contract been formed? Explain. A contract has been formed. Mann made an offer (promise) of a reward for any information leading to employee thieves. Waldo called Mann and verbally accepted the offer to watch for any employee thieves and provide the requested information. Almost every day Sally took a break at lunch and went to the International News Stand—a magazine store—to browse the newspapers and magazines and chat with the owner, Conrad. Often she bought a magazine. One day she went there, browsed a bit, and took a magazine off the rack. Conrad was busy with three customers. Sally waved the magazine at Conrad and left the store with it. What kind of a contract, if any, was created? An implied contract was created since based on past behavior Sally had bought a magazine. Given the casual nature of the transaction Conrad could assume Sally intended to purchase the magazine and that he could charge her account for the cost of the magazine if she had left a form of payment with him or that he would charge her the next time she came to his stand when he was not busy. Joan called Devon Sand & Gravel and ordered two “boxes” (dump-truck loads) of gravel to be spread on her rural driveway by the “shoot and run” method: the tailgate is partially opened, the dump-truck bed is lifted, and the truck moves down the driveway spreading gravel as it goes. The driver mistakenly graveled the driveway of Joan’s neighbor, Watson, instead of Joan’s. Is Devon entitled to payment by Watson? Explain. Devon in this case would not be entitled to payment by Watson since the order was for Joan and Devon mistakenly performed a job on the incorrect property. Given that the job had been completed it is highly likely that Watson was completely unaware that Devon was mistakenly graveling his driveway therefore he was not given the opportunity to object and stop the action from taking place.

Assignment 5 exercises

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