Contracts

Answer Outline

Fall '94

Question 1 -- 25 pts.

• Misunderstanding
  • Effect of Peerless (Consensus Ad Idem)
  • Restatement Analysis
    • Materiality
    • Reason to know 7 pts.

• Remedy (Homeowners)
  • Expectancy Cost Completion
    • + Down payment
    • - Contract Price
    • 17K+5K-20K = 2K -- 3 pts.
  • Replacing of Wallpaper 5K 3 pts.
    • (Cost completion or diminution in value)
  • Rent of Hall ($500)
    • Hadley v. Baxendale

     

• Remedy (Carl)
  • Expectancy
    • Contract Price
    • - Market Price
      • Minus
    • Down Payment
    • - Expenses ...............................3 pts.
      • 20K-15K = 5K
      • - 5K-3K = 2K
      • ...................3K
  • Reliance
    • 7500
    • -2000
    • 4500
    • (Capped by Expectancy) 3 pts.
• Mitigation 3 pts.

Question 2 -- 50 pts.

• Initial Contract
• Offer/Acceptance 5 pts.
  • "We offer"
  • Distribution of Offer
  • No way to limit the number who could accept
  • Mike acceptance?
    • New Offer?
    • Acceptance by Theresa?
• Output/Requirement K/Certainty 8 pts.
  • Output contract -- generally
  • Illusory promise
    • Req. K? (is this intended to be a combination output/requirement contract?)
  • Certainty
    • will take output for a while
    • Basis for granting a remedy?
• Reliance on Relationship 5 pts.
  • Theresa turned away offer mfr.
  • Reasonableness of Reliance (K lacked duration)
• Breach by Plastics 10 pts.
  • Output K
    • Stated Estimate
    • discontinuing output
      • good faith issues
      • characterization of output -
      • dinosaurs vs. plastic toys
• Settlement -- 2d telephone Call
  • O/A issue 5 pts.
    • Plastics "would consider"
  • Consideration 5 pts
    • Duncan v. Black
    • Did Toy have a valid K?
• 3d Call 5 pts.
  • Offer $10,000
  • Rejection
  • Attempted Acceptance
• Remedy 7 pts
  • Mp - Kp $25,000
  • How many?
  • Settlement 10K
    • Is Theresa limited by final "contract = problem pre-existing dirty rule. No consideration for her promise to take 10K

Question 3-- 8 pts.

• "On Completion of Work"
  • Unilateral v. Bilateral
  • bias toward bilateral
  • If unilateral no damages
  • option to complete but no promise
  • If bilateral, damages = $1,000

Question 4-- 8 pts.

• Conditional Promise problem
  • If Sara decides to buy (mutuality?)
• Acceptance by Sara

Question 5 -- 8 pts.

• Pre-existing Duty
• Cancellation of 1st K