Contract

QUESTION 1

  1. In the Lucy v. Zehmer case in the assigned reading, Lucy and Zehmer signed a contract in which Zehmer agreed to sell a farm to Lucy. When Zehmer signed the contract, he whispered to his wife that he was joking and did not really intend to sell the farm. Why did the court enforce that contract?

The court enforced the contract because, though Zehmer whispered to his wife that he did not intend to sell the farm, Lucy did not hear that comment, and Zehmer’s outward manifestations indicated to Lucy an intent to sell.

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The court said that it did not matter what Zehmer intended; he signed the contract, and the contract was enforceable.

The court said that written and signed contracts are always enforceable.

The court said that the contract for the sale of land (the farm) is always enforceable.

QUESTION 2

  1. If Sid says to Pat, “I will sell you my laptop for $200,” and Chris, who overhears Sid’s offer, says, “I accept your offer, and I will buy your laptop for $200,” is a contract formed?

Yes, unless Pat accepts the offer before Chris accepts the offer.

No, the offer was made to Pat, so only Pat can accept the offer.

Yes, an offer can be accepted by anyone who hears the offer.

No, Sid’s offer is not a valid offer because it does not contain a term specifying when the offer has to be accepted.

QUESTION 3

  1. Advertisements are generally not considered to be offers but, rather, invitations to make an offer. Under what circumstances is that general rule not applied?

When the advertisement appears in writing, as in a newspaper advertisement

When the item advertised for sale has a sales price of less than $500

When the advertisement is for a discontinued item and the price is stated

When the advertisement specifies a limited quantity of the item advertised and specifies the means by which the item can be purchased

QUESTION 4

  1. One of the elements of an offer to make a contract is intent. What standard do courts use to determine if an offeror intends to enter into a contact?

Courts consider what the offeror is thinking at the time the offer was made.

Courts consider only the words that are actually stated in the contract to determine the offeror’s intent.

Courts are concerned only with the outward manifestations of the offeror’s intention to enter into a contract.

Courts will consider all of the circumstances surrounding the making of the contract, including what the offeror said and what the offeror must have been thinking.

QUESTION 5

  1. What does the mailbox rule provide?

That the response to an offer is effective when that response is placed in a mailbox

That if an offer is mailed to an offeree, that offer must be accepted by mail by the offeree

That an acceptance but no other response is effective when that acceptance is placed in a mailbox

That some offers can only be communicated to the offeree by mail

QUESTION 6

  1. Why do courts usually not consider the adequacy of consideration for a contract?

Courts do not usually have the information necessary to determine adequacy of consideration for a contract.

Courts will not set aside a contract because one of the parties to the contract was not prepared to get the best deal for themselves.

Courts do not determine questions of fact in dealing with contracts.

The Constitution prohibits government from interfering with the validity of contracts.

QUESTION 7

  1. Contractual capacity means:

that an agreement contains all of the elements necessary to create a contract and is, therefore, a contract.

that the parties to an agreement have exchanged valid promises and have formed a contract.

that each of the parties will receive an equal benefit under an agreement and have formed a contract.

that a person has the competence to understand the obligations imposed by a contract and the legal ability to enter into a contract.

QUESTION 8

  1. If the law will enforce an agreement that contains a set of promises, that agreement is called a(n):

offer.

acceptance.

contract.

quasi-contract.

QUESTION 9

  1. How does an offer differ from an option contract?

An offer has to be communicated before it can be accepted, but an option contract does not have to be communicated.

An offer must contain definite terms, but an option contract is simply an outline of a proposed agreement.

An offer can be revoked by the offeror at any time before the offeree accepts the offer, but an option contract cannot be revoked by the offeror until the time stated in the option contract has expired.

An offer is valid until it is rejected by the offeree, but an option contract ends at the option of the offeror.

QUESTION 10

The elements necessary to create an enforceable contract are:

intent, definite terms, and communication to the offeree.

an offer and acceptance of that offer.

genuine assent and proper form.

agreement, consideration, capacity, and legality.

QUESTION 11

  1. Susan, a wealthy widow, invited an acquaintance, John, to her home for a steak dinner on a specific date and at a specific time. John told Susan that he would be delighted to come to dinner and, eager to impress Susan, spent lavishly in preparing for the evening. His purchases included a new blazer, new shoes, an expensive floral arrangement, and champagne for Susan.At the agreed upon date and time, John arrived at Susan’s house only to find that she had left for the evening. John went home and sent Susan an email saying that he came for dinner but she was not home. The next day, Susan sent John an email saying that she was sorry that she had forgotten the dinner and had gone to the theater with friends.Assume that the facts given are admitted and not in dispute. Did Susan and John have a contract? Why, or why not?Your response must be at least 75 words in length.

QUESTION 12

  1. Rhodes, a wealthy businessman, and Axe, an artist, were involved in a business venture a few years ago, and Axe blamed Rhodes for the failure of that business venture. Despite the bad blood between the two, Rhodes, who was also an art collector, wanted one of Axe’s paintings because Axe was becoming more popular, and the value of his paintings was increasing.Rhodes sent Axe a letter stating that he would pay Axe $100,000 if Axe would agree to paint a painting specifically for Rhodes. When Axe received Rhodes’s letter, he was angry and wrote a quick letter to Rhodes not only rejecting Rhodes’s offer but saying that he thought Rhodes was a crook who should be in jail. As soon as Axe put the letter rejecting Rhodes’s offer in the mail slot at the post office, Axe had second thoughts about rejecting the offer and decided that he would paint a quick painting and take Rhodes’s $100,000. Axe immediately called Rhodes and said he accepted Rhodes offer and was ready to start on the painting immediately. The next day, Rhodes received the letter from Axe rejecting the offer. Now, Rhodes was angry because the letter said that Axe thought he was a crook and should be in jail, so Rhodes immediately called Axe and said the deal was cancelled.Was a contract between Rhodes and Axe formed? Why, or why not? If a contract was formed, did Rhodes have a legal basis for cancelling the contract?

Your response must be at least 75 words in length.

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