Chapter 8

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Southern New Hampshire University *

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Law

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Jan 9, 2024

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Chapter 8: Introduction to Contracts A contract is: - A promise or agreement that can be enforced in court In determining whether a contract has been formed, the element of intent is of prime importance, and the intent is determined by the: - Objective theory of contracts The requirements for a valid contract do not include - Fair price In contract law, consideration means: - Something of value received or promised underlying the bargain. An express contract is one in which: - The terms of the agreement are explicity stated. An executory contract is: - A contract not yet fully performed. A contract that can be avoided by one of the parties is a: - Voidable contract A contract that has no legal force is called a: - Void contract John furnishes goods to Barry and expects to be paid for those goods. Barry receives the goods and knows, or should know, that payment is expected. Barry has a chance to reject the goods from John but does not. John and Barry do not otherwise communicate. This is known as a(n): - Implied contract

When classifying contracts according to their state of performance, a contract that has been fully performed on both sides is a(n): - Executed contract Larry and Leah have a disagreement as to whether they have formed a contract, and a lawsuit is filed. What will the court look to in determining whether a contract was formed? - The reasonable person standard Tracy owns a 2012 Toyota Camry that has been driven 24,000 miles and, to her knowledge, has no mechanical problems. She offers to sell the car to her friend Tami for $12,000. Tami accepts Tracy's offer. Tracy and Tami have: - An agreement Jessica offers to pay Kevin $50 for his used business law textbook. Kevin agrees to sell it for that amount. They agree to meet one week later to exchange the money for the book. Kevin and Jessica have formed: - An express contract - An express contract is one in which the terms of the agreement are fully and explicitly stated in words, oral or written. Because Jessica made an oral offer that Kevin accepted by promising to sell his book for $50, they formed an express contract. Pam's car was hit while it was parked. Pam calls A-1 Towing, tells the dispatcher about the problem, and gives her location. Pam never discusses a price and leaves before the tow truck arrives, so she does not talk with the driver nor sign any documents. Pam: - Owes the company for towing her car under and implied contract. Whitney pulls her car into her favorite gasoline filling station and tells the attendant to fill her tank. The attendant asks Whitney what octane level she wants, and she tells him,

"regular." The attendant properly fills her tank. At this point, the contract between the station and Whitney is: - Executory contract Cindy offers to pay Johnny's way through college if he will give her one of his kidneys in return. Johnny is a perfect donor match and accepts Cindy's offer, signing a contract. Their contract is: - Void MobileFon enters into a cell phone contract with Allison, who is a freshman in high school. This contract is likely: - Voidable Li and Carlo have a disagreement as to whether they have formed a contract, and a lawsuit is filed. Carlo argues that he never accepted the terms of the offer made by Li. According to Carlo's position, what element is lacking that would support the contention that no contract was formed? - Agreement A-One Supermarket has agreed to use NatureMarket farms as its sole provider for melons for a three-month period. At the end of one month into the contract, NatureMarket has delivered eight shipments of melons, for which A-One has paid in full upon receipt. At this point, the contract is: - Executory Steve is going away for three months and wants to rent his apartment to Jeff while he is away. They agree on terms and shake hands on the deal. Their township has a regulation stating that all housing rental agreements must be in writing. As a result, their contract is:

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- Unenforceable William Tackaberry was a real estate agent who spent several months helping Thomas Ryan to purchase a particular piece of property. At the beginning of the process, and during all subsequent discussions, Tackaberry informed Ryan that his commission was 10 percent of the sale price, payable at closing. Ryan refused to sign a contract spelling out the terms of the commission, several times attempted to negotiate a lower commission, and stated he was not going to pay 10 percent for the commission. Tackaberry repeated that his commission was 10 percent, due at closing. After the deal was finalized, Tackaberry sent Ryan a bill for 10 percent of the sale price. When Ryan did not pay, Tackaberry filed a lawsuit to recover the full amount. Tackaberry claimed that he and Ryan had an implied contract. The court most likely found that an implied contract: - Did not exist because Ryan’s conduct indicated that he had never agreed to 10% commission. Engelcke Manufacturing, Inc., planned to design and manufacture Whizball, an electronic game. Engelcke asked Eaton to design the electronic schematic for the toy and told him that he would be paid the reasonable value of his services upon the project's completion. No written contract was signed, nor were any specific terms or amounts discussed. Eaton had finished 90 percent of the project when Engelcke terminated his employment. Eaton filed a lawsuit against Engelcke, claiming breach of an implied contract. Would the court most likely find that an implied contract existed? - Yes, because the conduct of Engelcke and Eaton indicated that they had mutually agreed that Eaton would be paid to design a game for Engelcke. Jay entered into a contract to work for Bowing Systems for six months as a consultant to

help upgrade its computer systems. The job was scheduled to begin one week after the contract was signed. Three days after Jay and Bowing Systems signed the contract, Jay received a job offer from another client that paid better. Jay accepted the second job and told Bowing Systems he would not take the job with them. Bowing Systems was not able to find another contractor able to perform the necessary services on the scheduled start date. Bowing Systems sued Jay. Jay argued that when he signed the contract, he did not intend to be bound by it. How would the court most likely rule? - In favor of Bowing Systems, because mutual assent is indicated by the signed contract. Elsa's neighbors built a fence in their yard along their shared border. She thinks it is unattractive and has asked them to take it down. They refused. When her neighbors go away on vacation, Elsa tells Jerry she will pay him $500 to destroy the fence. Jerry destroys the fence, but Elsa refuses to pay him. Can Jerry collect the $500 from Elsa? - No, they have a void contract.

Chapter 8

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