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Quiz #1 week 2 Question 1 5 / 5 pts Which of the following is governed by Article 2 of the Uniform Commercial Code? Correct! A contract between Buyer and a Landscaper for the sale and delivery of two cubic yards of gravel for landscaping. A contract between Buyer and Seller to purchase land. A contract to build a custom home between Buyer and a builder. A contract between Buyer and Partner to open a home-based business together selling scented candles and share the overhead costs and profits. The Uniform Commercial Code applies to transactions in goods. Goods are defined as moveable things, no matter how large or small the “thing” is. Therefore, the gravel is considered a good, and the contract is governed by Article 2 of the Uniform Commercial Code. Question 2 5 / 5 pts To which of the following contracts does Article II of the UCC apply? Correct! A contract for $20,000,000 for the manufacture, sale, and delivery of a nuclear accelerator seventeen miles in length. The accelerator will be buried 574 feet under the ground . A contract for $20,000 for the purchase and sale of an apple farm. A contract between a movie company and a screenwriter for $250,000 for the purchase and sale of a completed movie script. An employment contract between a factory worker and a factory. Article II of the UCC “applies to transactions in goods.” UCC § 2-102. Goods are all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale. UCC § 2-105. The size of the item is irrelevant. Here the item is movable and, in fact, will be moved (delivered) according to the contract. Accordingly, Article II of the UCC applies. Question 3 5 / 5 pts

Landowner offered his best friend, Buyer, his 40-acre lot for $4,000. Buyer accepted the offer and paid Landowner the $4,000 for the 40 acres. Unknown to Landowner, Buyer planned to give Landowner a gift of $4,000, and, unknown to Buyer, Landowner had planned to give Buyer the land. Have Landowner and Buyer formed a contract? Correct! Yes. Both Buyer and Landowner outwardly manifested that the other’s promise induced their own promises. Yes. A mutual gift promise can suffice as consideration. No. The contract lacked consideration because the parties intended to give gifts to each other. No. Both parties exchanged mutual promises to give gifts. “To constitute consideration, a performance or a return promise must be bargained for. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. The performance may consist of (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modification, or destruction of a legal relation.” See Rs. 2d § 71(1)-(3). The law looks to the external manifestation rather than the undisclosed mental state. See Rs. 2d § 71, cmt. b. “It is enough that one party manifests an intention to induce the other’s response and to be induced by it and that the other responds in accordance with the inducement. Id. Here, Landowner offered, and Buyer accepted and the parties exchanged consideration—a promise of money for a promise of the land. The parties’ undisclosed mental plans are irrelevant. Question 4 0 / 5 pts Officer, a police officer, was off duty and went to vacation outside of her state, where she is not authorized to investigate crimes. She went to a state where Father was offering a $1,000 reward for finding his missing son. Officer saw this flyer at the airport. As soon as she stepped out her hotel on the first day of her visit, Officer saw the missing child and scooped him up. Officer then delivered the child to Father and said nothing. Officer would have returned the child regardless of whether Father had offered a reward. Father reiterated his promise to pay the $1,000 and promised to mail a check to Officer with a thank you note. Father changed his mind and sent Officer a very nice thank you note but no money. If Officer sued Father for breach of contract and Father defended on the grounds that Officer supplied no consideration, would Officer win? Yes. Officer can take the reward because she was not on duty and out of her home state when she found and returned the child . No. Officer cannot take the reward because she was had a public duty as a police officer to return the child.

No. The Officer cannot take the reward because she did not intend to take the reward when she found and returned the child. Answered Yes. Officer can take the reward because she complied with the terms of the offer-- finding and returning the child to Father. Question 5 **past consideration** 5 / 5 pts Painter agreed to paint Homeowner’s house for $1,000. Painter promised that the job would be done in two weeks. After the first week, without excuse, Painter threw all of his paint in the river and refused to finish the paint job. Homeowner did not want anybody else to finish the job because Painter had a reputation for being the best painter in the city. Homeowner then offered Painter an extra $500 to finish the paint job that he had initially started. Painter purchased some new paint for $200 and finished the project. Homeowner, however, later refused to pay any more than the original $1,000, and Painter sued Homeowner for the extra $500. Will Painter win? Correct! No. Painter did not undertake any new duty in exchange for the extra $500. No. Painter caused his own problem in throwing out the paint. Yes. Because the extra $500 is a modification of a contract, it does not require additional consideration. Yes. Painter relied on the extra $500 in purchasing the replacement paint. Painter already had a duty to paint the house; A promise to do what one is legally obligated to do is not valid consideration, and Painter only promised to paint the house Painter already had promised to paint Question 6 **promise to do something** illusory promises, if both promised then bargain, if not, no bargain 5 / 5 pts Planner and Client signed a writing promising to serve as Client’s financial advisor for five years starting May 1, and Client agreed to pay $500 per month. The writing included the following term, “Client reserves the right to terminate the agreement at any time with one month’s notice.” Has Planner received sufficient consideration? ect!

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Yes. Because Planner must receive at least one month’s notice if Client terminates Planner, Planner is receiving sufficient consideration. No. Planner might have to perform for a month and not be paid anything if Client immediately terminated Planner. Yes. Because Planner will be paid $500 per month for five years, Planner is receiving sufficient consideration. No. Because Client may terminate the agreement at any time and therefore performance by the consumer is optional, Planner is not receiving consideration. Correct. “A promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performances.” See Rs. 2d § 77. “Words of promise which by their terms make performance entirely optional with the “promisor” do not constitute a promise.” See Rs. 2d § 77, cmt. a. Because Client reserved the right to terminate the agreement at any time, it appears Client’s promise is illusory. However, Client promised to provide one month’s notice, which does restrict Client’s discretion and entitles Planner to at least one month of pay for one month of services. Question 7 0 / 5 pts Two years ago, Bank made a $100,000 loan to Corporation, a closely-held corporation. Last month, when that loan was still outstanding, Corporation asked to borrow an additional $50,000 from Bank. Bank agreed, provided that Shareholder, who owned a majority of Corporation’s shares, guaranteed the entire $150,000 debt. Shareholder signed a guaranty agreement covering the entire indebtedness, and Bank made the $50,000 loan to Corporation. Is Shareholder’s agreement to guaranty Corporation’s debt to Bank supported by consideration? Correct Answer Yes, because Bank agreed to loan the additional $50,000. Yes, but only with respect to the new $50,000 loan, not with respect to the earlier $100,000 loan. You Answered Yes, because Shareholder has an ownership interest in Corporation and therefore benefitted from the loan.

No, because Shareholder received no direct benefit from the loan. Question 8 0 / 5 pts Student, a college junior, agreed to provide extensive landscaping services for Owner for $400 per week for ten weeks over the summer. Student’s goal was to raise $4000 (the full value of the contract) to pay his fall tuition. After three weeks, Owner was very pleased with the Student’s work and agreed to pay Student $600 for each of the remaining seven weeks. Owner and Student are considering two different ways to document this agreement: (i) Owner and Student both sign a writing modifying the payment term of their prior agreement; or (ii) Owner and Student sign a writing terminating their prior agreement and entering into a new agreement for the remaining seven weeks at $600 per week. Assuming Student did not rely on Owner’s promise to pay the new weekly rate of $600, in which of the two approaches will a court conclude Owner’s promise to pay $600 per week be supported by consideration? Only the new agreement. Neither approach. Only the modification. Answered Both approaches. Question 9 **pre-existing duty** 0 / 5 pts After a storm, Homeowner, who lives in a rural area, contracted with Worker for Worker to clear a path from a main street to Homeowner’s property in exchange for $500. The path would necessarily pass by, and thus create access to, Neighbor’s property. After the agreement with Homeowner and before Worker began work, Neighbor agreed to pay Worker $300 bonus in exchange for Worker finishing the path. Worker cleared the path. Homeowner paid Worker $500. Neighbor refused to pay. In an action by Worker against Neighbor, what is the most likely result? Correct Answer Worker will win because Worker’s promise to Neighbor was consideration for Neighbor’s promise. Worker will win because Worker’s promise to Homeowner was consideration for Neighbor’s promise. nswered

Neighbor will win because Worker was under a pre-existing duty to clear the path. Neighbor will win because Worker did not promise anything in return for payment from Neighbor. Question 10 5 / 5 pts Landowner told Friend, “If you promise to give me $1,000 to initiate this lawsuit against this oil company, I will give you $50,000 when I recover from the oil company.” Friend accepted this offer from Landowner but is afraid that it is not a valid contract because of the unequal values of the consideration. Is Landowner’s promise to pay $50,000 out of her lawsuit proceeds valid as a consideration for a promise of $1,000? Correct! Yes. Because Landowner is not certain to win the lawsuit, the difference in values exchanged does not require a conclusion that the contract lacks consideration. Yes. Court’s will not inquire into the adequacy of consideration so that the parties’ exchange of $1,000 for $50,000 does not create an adequacy issue. No. Landowner has, in effect, promised to give Friend a gift of $49,000. No. Because Landowner may not recover anything from the oil company, Landowner is not supplying any consideration in exchange for Friend’s promise. Correct. Courts usually do not inquire into the adequacy of consideration. See Rs. 2d § 79, cmt. c. While an exchange of $1,000 for $50,000 without more would suggest a gift of $49,000, here, while there is a large difference between $1000 and $50,000, the exchange is an exchange of $1,000 for a chance at $50,000. The uncertainty of Friend getting anything overcomes the disparity in values. Question 11 5 / 5 pts What are some of the sources of contract law?

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State common law State statutes, such as the UCC Federal rules, regulations, and statutes (such as the CISG) All of the above Question 12 5 / 5 pts What best describes the "common law?" Correct! Legal rules which are derived from decided cases Legal rules passed by a state legislature through legislative enactment Legal rules dictated by the King Uniform Commercial Code Question 13 5 / 5 pts The CISG stands for Correct! United Nations Convention on Contracts for the International Sale of Goods Center for Information Service Gathering Rules for Contracts of International Serious Good None of the above

Question 14 5 / 5 pts The default law or rules governing contract law is Correct! The Common Law The UCC (Uniform Commercial Code) The Restatement 2nd of Contrcts The CISG Question 15 5 / 5 pts Under UCC 2-105, "goods" are described as all things which are movable manufactured goods Correct! both of the above none of the above Question 16 5 / 5 pts The term of art in contract law that describes the "bargain" between parties to a contract (that which is given or promised in exchange for that which is sought from the promisor). Correct!

Consideration Expectancy Reliance Mutual Assent Question 17 5 / 5 pts In a unilateral contract Correct! The promisor bargains for performance. The promisor bargains for a promise. The promisee bargains for performance The promisee bargains for promise Question 18 5 / 5 pts In a bilateral contract Correct! The promisor bargains for a promise The promisee bargains for a promise The promisor bargains for performance The promisee bargains for performance

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Question 19 5 / 5 pts The issue of mutuality applies Correct! To only bilateral contracts To all contracts To only unilateral contracts To the sale of goods Question 20 5 / 5 pts A promise may be fully or partially enforceable, even if there isn't any consideration, if the promisor should have reasonably foreseen reliance by the promisor, and the promisee did in fact rely on the promise in that foreseeable manner. This doctrine is called Correct! Promisorry estoppel Reasonable Reliance Sham Consideration Expectancy Review Quiz Score: 80 out of 100 Quiz 2 week 3 Question 1 5 / 5 pts The parties must demonstrate a "meeting of the minds" to form a binding contract. This means they share the same actual mental intention to be bound. This doctrine is called !

mutual assent mental assent mutual ascertainment mental ascertainment Question 2 5 / 5 pts The outward actions of negotiating parties, to determine whether they have a contract, is based on an objective standard as understood by this person watching the parties. Correct! A hypothetical third party observer referred to as the "reasonable person." A witness to the contract referred to as a notary. The judge. The attorney or attorneys for the parties who drafted the written agreement. Question 3 5 / 5 pts O + A + C = K What does this formula stand for? Correct! Offer + Acceptance + Consideration = Contract Offer + Acceptance + Contract = Knowledge

Objective review + Assent of the parties + Criminal liability = Contract formation It doesn't stand for anything Question 4 5 / 5 pts This is a communication that reasonably invites the recipient to conclude a contract between the parties by nothing more than timely assent. Correct! An offer An advertisement An invitation An option contract Question 5 5 / 5 pts The question of whether an offer has been made may raise which of the following issues: intent to be bound specificity as to the offeree empowered to accept definiteness as to the terms of the offer all of the above Question 6 5 / 5 pts This is the manifestation of assent to the terms made by the offeror in the manner invited by or required by the offer. t! Acceptance

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Consideration Manifestation of a Contract Bilateral Assent Question 7 5 / 5 pts An offer doesn't remain open forever. The term that we use to describe when an offer is no longer acceptable is t! lapse death reliance estoppel Question 8 5 / 5 pts When can an offer lapse upon the death of the offeror or offeree when it is revoked by the offeror upon the incapacity of the offeror or offeree all of the above Question 9 5 / 5 pts The mirror image rule states ect! An acceptance must be a "mirror image" of the offer

An acceptance may have different terms or conditions, but if the basic intent of the parties looks like they want to be bound in a contract we will use a mirror image to predict what the contract terms should be To determine what the parties intent is, you should use what you think they wanted (i.e., look in the mirror) None of the above Question 10 0 / 5 pts Seller and Buyer were negotiating the purchase and sale of a small, vacant lot. Seller made a valid offer to sell the land to Buyer for $10,000. Buyer, however, explained she currently only has $4,000, but she expected to receive a royalty check in the amount of $20,000 within the next seven days. Seller then wrote the following on a piece of paper and signed it, “If you give me $100, I will keep my offer open to you for 10 days.” Buyer signed the paper and gave Seller a check for the $100. Nine days later, Buyer went to Seller’s office to pay off the remaining balance on the land. Seller apologized and said he could not accept the payment because he had sold the land to another buyer two days earlier who had agreed to pay $20,000 for the land. Seller returned the $100 check to buyer and told her he looked forward to working with her in the future. If Buyer sues Seller for breach of contract, will Buyer win? Correct Answer Yes. Seller and Buyer created a valid option contract . No. Because the promise was just scribbled out on a piece of paper, a valid option contract did not exist and seller was free to sell the land to another buyer. No. Because Seller only received $100 and never cashed it, the consideration for the option was nominal. Yes. Buyer has a claim against Seller for bad faith breach because Seller failed to inform Buyer that he sold the property prior to the expiration of the 10-day option period. Question 11 5 / 5 pts

Father made the following offer to Tutor, “Will you agree to tutor my daughter in math? If you agree and tutor her, and she gets at least a 90% on her math test one week from today, I will pay you $50 for every hour that you tutored her up to a maximum of $500.” Tutor contemplated this offer but decided not to accept it and did not say anything. However, the night before the exam, Tutor decided to tutor Father’s daughter to see if she could successfully do it. The two girls pulled an all-nighter. Father’s daughter received a 95% on her next math exam. Assume that Father is divorced from the mother of his daughter, and the daughter lives with her mother and not with Father. Delighted that Father’s daughter did so well and the fact that she actually did have some tutoring skills, Tutor went back to Father and told Father that she now accepts the offer and that Father owed her $500; Tutor explained that she tutored Father’s daughter for 10 hours in math, and Father’s daughter scored well over the required 90% on the daughter’s next math test. Must Father pay Tutor $500 for the tutoring she provided the daughter? Correct! No. Father does not have to pay Tutor the $500 because Tutor did not timely accept Father’s offer. Yes. The offer did not lapse before Tutor accepted it because, as both Father and Tutor knew, as long as the tutoring occurred before the exam, it would be provided in time to help Father’s daughter. No. Father does not have to pay Tutor $500 because Tutor is friends with Father’s daughter and she would have tutored her whether she was paid to do it or not. Yes. Father and Tutor entered into a binding contract when Tutor tutored Father’s daughter and the daughter scored 95% on her next math test. Correct. Tutor’s silence in response to the offer was not an acceptance. None of the exceptions to the general rule against silence as acceptance even arguably fit. While some offers can be accepted by performance, this offer could not because Father asked for a promise, and Father would logically want to know she had secured a tutor for her daughter rather than waiting to find out if she had a contract when Tutor did or did not do the tutoring. By the night before the exam, the offer lapsed. An offer lapses, according to a well-established presumption, at the end of a face-to-face conversation unless the circumstances indicate otherwise. Given Father’s request for a promise and need for certainty about having a tutor for her daughter, the offer did lapse at the end of the conversation. Question 12 5 / 5 pts Mother approached her adult daughter and said, “If you will agree to take care of Fido (Mother’s dog) for the next three weekends, I would be in a

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position to babysit Granddaughter for you from 6-10pm on Thursday nights for the next six weeks.” Has Mother made an offer? No. Mother has not made a valid offer because she failed to communicate her commitment. No. Mother has not made a valid offer because her offer lacks the requisite certainty regardless whether she had the requisite intent to contract. Yes. Mother’s offer has sufficient certainty for the court to determine breach and provide a remedy. Yes. Mother has expressed the requisite commitment to babysit Granddaughter. Correct. “An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” See Rs. 2d § 24. The problem here is that Mother does not unequivocally express commitment; she only describes her ability and not her commitment to perform. Question 13 0 / 5 pts Seller emailed Buyer, “I will sell you my 50-acre property, Blackacre, for $40,000, escrow to close in 30 days. This offer to expire in one week.” Buyer immediately emailed back, “I was hoping for a price more in the neighborhood of $35,000.” Would you consider that price?” Seller responded, “No.” Buyer replied, “Ok, I accept your $40,000 offer.” Seller responded, “It’s too late. You rejected my offer.” Do Buyer and Seller have a contract? Correct Answer Yes. Buyer and Seller do have a contract because Buyer’s first response to Seller’s offer was not, itself, an offer. Yes. Buyer and Seller do have a contract because Buyer had an option. No. Buyer and Seller do not have a contract because Buyer did not possess an option. No. Buyer and Seller do not have a contract because Buyer’s first response to Seller’s offer was a counter-offer. Question 14 5 / 5 pts Olivia and Beatrice were discussing the sale of Olivia’s car over drinks at a local bar. On a bar napkin, Olivia wrote, “I agree to sell my car to Beatrice for $1000.” Olivia and Beatrice signed the napkin. Which

additional fact, if true, would cause a court to conclude the parties formed a contract during the conversation? Correct Olivia was joking when she agreed to sell the car to Beatrice, but Beatrice did not know Olivia was joking and was reasonable in her understanding . Both Olivia and Beatrice were joking during the conversation and everyone in the room, including the two of them, knew they were joking. A reasonable person would have thought Olivia was joking when she agreed to sell the car to Beatrice. Although a reasonable person would have thought Olivia was serious during the conversation, Beatrice knew Olivia was joking about selling the car. Correct. While Olivia’s assent is required to form a valid contract, a court will look to her words and acts, judged by an objective reasonable person standard. Olivia’s undisclosed intent is not relevant. Therefore, the fact that she was joking during her conversation with Beatrice about selling the car will not, without more, negate a contract between the parties. Question 15 0 / 5 pts Which of the following communications, if responded to by the alleged offeree with unequivocal assent in the proper manner, is likely to be deemed a contract? Correct Answer A toy store places an advertisement in a newspaper that says, “For Sale: New BuildCo Brick Building Sets! $50. 10 left, first come, first-served.” A shopper calls a toy store on the telephone and asks the price for a BuildCo Brick Building Set. The shopper is told the price is $50. A toy store and a toy manufacturer are negotiating a contract for the purchase and sale of building brick sets. They sign a “Letter of Intent” that includes the price, parties, subject, and quantity, and says, “Dependent on subsequent approval by the presidents of toy store and toy manufacturer.” A toy store places an advertisement in a newspaper that says, “For Sale: New BuildCo Brick Building Set, $50.” Question 16 5 / 5 pts

Mother wanted to reserve a clown performer for her daughter’s birthday party in 30 days. After doing some research on how much local clown performers charge for their services, Mother found one, Clown, she liked. Clown told her that she would perform at the daughter’s birthday party for $5,000. Clown explained that she was the most popular clown in town, and she was giving the mother a good deal on such short notice. Clown and Mother signed a written agreement that said Mother would pay Clown $14 now and Clown could keep the $5,000 offer open for three days. Have Mother and Clown formed a contract? ! Yes. Mother and Clown have agreed to an option. No. Mother’s consideration is a mere sham and is nominal. Yes. Because courts generally will not inquire into the adequacy of consideration, a court should conclude Mother and Clown have formed a contract. No. Mother and Clown have agreed to an option and not a contract. Correct. “An offer is binding as an option contract if it is in writing and signed by the offeror, recites purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time.” See Rs. 2d § 87 (1)(a). “Offers made in consideration of one dollar paid or promised are often irrevocable under Subsection (1)(a)...a comparatively small payment may furnish consideration for the irrevocability of an offer proposing a transaction involving much larger sums. But gross disproportion between the payment and the value of the option commonly indicates that the payment was not in fact bargained for but was a mere formality or pretense. In such a case there is no consideration...such a nominal consideration is regularly held sufficient to support a short-time option proposing an exchange on fair terms” See Rs. 2d § 87, cmt. b. Even though Mother is only paying $14, this consideration was bargained for, and Clown only agreed to keep her offer open for a short period of time, three days. Therefore, there is sufficient consideration. Question 17 0 / 5 pts Concert Hall mailed an offer to Singer to have singer perform at the Concert Hall for April 12-15. Singer immediately mailed a properly stamped and addressed letter unequivocally accepting Concert Hall’s offer. Two days later, Singer sent Concert Hall, a rejection letter using overnight mail, which Concert Hall received before it received Singer’s acceptance. On the day Concert Hall received the rejection letter, Concert Hall executed a contract with a dancer for April 12-15. Singer changed her mind again and decided

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she did want the gig, but Concert Hall refused. Singer sued Concert Hall for breach of contract. Will Singer win? Correct Answer No. Concert Hall received the rejection first and then selected dancer for the April 12-15 dates. No. The rejection arrived first and therefore the rejection controls. Yes. The acceptance was effective on dispatch. Yes. The Concert Hall could always arrange for the dancer to perform on another day. Question 18 5 / 5 pts Mutual assent has 2 elements. What are they? Correct! Offer and acceptance Consideration and enforcement Offer and consideration Acceptance and consideration Question 19 5 / 5 pts Daughter was negotiating the sale of her deceased parents’ assets with EstateCo, a local company specializing in estate sales. EstateCo sent Daughter a one-page “letter of intent” signed by EstateCo for EstateCo to collect, organize, and sell to the public all of the physical belongings left in the decedents’ house. The letter also outlined a plan for Daughter and EstateCo to share the profits from the sale. Finally, the letter specified times for both parties’ performances. The letter also stated that “the parties reserve the right not to go forward if a final agreement is not executed in 30 days.” Daughter also signed the letter as requested by EstateCo. Daughter

and EstateCo had no further contact. Daughter eventually decided to sell her parents’ belongings through another estate sale company. If EstateCo sued Daughter for breach of contract, will EstateCo win? Correct! No, because the letter makes it clear the parties are not bound merely based on signing the letter. Yes, because the letter contains all the essential terms. Yes, because EstateCo and Daughter both signed the letter. No, because the writing does not contain the essential terms. Correct. According to the Restatement (Second) of Contracts, letters of intent may (or may not) be contracts. It depends upon the parties’ intent. Here, the parties expressly reserved the right to be released from the obligation of a contract. Therefore, the letter of intent is not a contract. Question 20 5 / 5 pts Abby lost her computer tablet in the law school library. On Monday, she posted a flyer on a bulletin board in the student lounge that said, “Lost Computer Tablet, If Found Call Abby, $200 Reward.” Student A saw the flyer and immediately started looking for the tablet. Student B called Abby and said, “I promise to find your tablet by tonight.” Student C called Abby and said, “I will give you my computer tablet in exchange for the $200.” On Tuesday, Abby posted another flyer next to the original flyer that said, “I revoke my offer to give a $200 reward in exchange for my lost computer tablet.” Does Abby have a contract with Student A, B, or C? Correct! Abby does not have a contract with any of the students. Abby has a contract with Student A. Abby has a contract with Student B.

Abby has a contract with Student C. Correct. In a unilateral contract, such as here, the offer is accepted by completing a task. Abby directly revoked her offer by posting the flyer before her unilateral offer was accepted. Thus, Abby did not have a contract with any of the students. Quiz Score: 80 out of 100

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