Exam Questions Packet
Contracts I (6202-14) (Fall 2014)
Professor Swaine
1. Explanatory Remarks
2. Practice Midterm – Multiple Choice and Essay (Fall 2008)
3. Final Examination Essay Questions (Fall 2008)
4. Final Examination Essay Questions (Fall 2009)
5. Final Examination – Instructions and Essay Questions (Fall 2010)
6. Final Examination – Instructions and Essay Questions (Fall 2013)
7. Sample Student Essay Answers (Fall 2010)
8. Sample Student Essay Answers (Fall 2013)
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Final Exam Packet (Fall 2014)
1. Explanatory Remarks
Before doing anything with these – e.g., taking a stab at answering past questions, either
superficially or under mock exam conditions – please read the remarks below.
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Practice Midterm Examination (Fall 2008) (item 2 in this packet). This is material that I
have previously distributed in lieu of a midterm. Reviewing this may be helpful insofar
as it gives you a chance to see some sample multiple choice questions (which will
possibly be included on your final) and essay questions. These particular questions are
somewhat easier than those I typically ask on an exam; on the other hand, the facts are
less complete and the questions as a whole are more loosely composed than would be
appropriate for a final.
•
Final Examination Essay Questions (Fall 2008 and 2009) (items 3 and 4). These are
essay questions from that semester’s final exam. To state the obvious, they test you on
some material that we have not yet covered – and some material we will not cover,
because they are based on a prior edition of the casebook and some variation in readings
– and require a degree of proficiency that you will not have until you have had the chance
to pull everything together. But I also have to stress this: No matter when you answer
them, please expect to find the questions very challenging, because they are designed for
assessment rather than for review. I believe that difficult questions are the best basis for
assessment, since they allow me to avoid assessing based on marginal or superficial
differences in mastery. I also believe in letting you see some in advance so that you are
not startled on the exam – these are really the upper bound of difficulty. But they are not
particularly good vehicles for reviewing the material, nor are they particularly good
vehicles for measuring your preparation.
•
Final Examination – Instructions and Essay Questions (Fall 2010 and 2013) (items 5 and
6). Similar material and caveats. The only additional feature is that I included the
instructions, which are useful to read even while you are preparing. I will post whatever
instructions I am using this year before the exam, so you can read them carefully while
off the clock.
•
Final Examination Essay Answers (Fall 2010 and 2013) (items 7 and 8). I collected
sample student answers for students in Contracts I to use in reviewing their performance
on the finals. This may not be as constructive as I would like, because it is easy to get
anxious over the difficulty of emulating good answers, or to fixate on differences among
the answers, and so forth. But they give you a clue as to how students enrolled in that
class, with that reading and that instruction, responded – and these and others did
reasonably well. Warning: I have not reread these answers and do not plan on doing so at
any point in the days ahead.
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Final Exam Packet (Fall 2014)
2. Practice Examination (Fall 2008)
Mock Instructions
[Omitted – please see later samples.]
Practice Multiple Choice Questions
[N.B. This is intended simply to simulate the look of multiple choice questions as you will
encounter them on the final examination – I have not written them with exacting care, so please forgive
any imperfections. As here, they are typically in the form of hypotheticals, just as you might expect from
an essay question. Many questions will be stand-alone, while others (like those below) will build off a
common set of facts (which, in this case, is unusually long). On the actual final, you will be recording
your answer in pencil on a bubble sheet.]
*
*
*
[PLEASE ANSWER THE NEXT TWO QUESTIONS BASED ON THE FOLLOWING COMMON
SET OF FACTS.] Resort Homes is a developer of resort condominiums; it is eager to market Moving
Mountains, a 200 unit complex adjacent to a ski resort. On June 1, Lucky receives from Resort Homes a
postcard which says: “You can win $500!! To collect your prize-money, you must come spend an
afternoon touring Moving Mountains before July 15. Call us if you need directions at 1-800MOVINMT.”
On June 2, Lucky calls Resort Homes and tells its president: “I got your postcard. I will come on June 10
and collect my money then.” The president responds: “See you then!” On June 9, Lucky sends Resort
Homes a fax that says: “Change of plans – I will visit instead on July 10, 2008.” On July 9, 2008, Resort
Homes sends a letter to all the previous postcard’s recipients saying in relevant part, “Due to
unprecedented interest in Moving Mountain, we are almost sold out. No more tours or other promotional
opportunities will be provided.” On July 10, Lucky shows up at Resort Homes and says, “When’s the
next tour leave?” The receptionist says, “You’re too late, sir.” The letter from Resort Homes arrives at
Lucky’s house on July 11. Lucky sues to collect his $500 prize.
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Final Exam Packet (Fall 2014)
1.
2.
Resort Homes argues that it never made any offer that could form the basis of a contract. Lucky
argues vigorously to the contrary. Which of the following arguments, if supported by the facts,
best supports his position?
A.
Resort Homes mailed the postcards to fewer than 200 recipients.
B.
Because Resort Homes failed to comply with the commitment in its postcard, it engaged
in a bait-and-switch.
C.
By inviting him to call, Resort Homes indicated that his acceptance was all that was
necessary to seal the deal.
D.
By sending a letter to prior recipients stating that the prize money would no longer be
available, Resort Homes acknowledged that its initial postcard was an offer.
E.
Lucky thought the postcard was serious.
Suppose, for the sake of argument (and for purposes of this question only), that Resort Homes
concedes that its postcard constituted an offer. But it still maintains that its offer was never
accepted. A court is likely to decide in favor of:
A.
Lucky, because his telephone call accepted the offer, and only added a detail regarding
when precisely he would arrive.
B.
Lucky, because his fax comprised a counter-offer that Resort Homes accepted by silence.
C.
Resort Homes, because it revoked the offer by letter before Lucky accepted.
D.
Resort Homes, because it revoked the offer before Lucky performed.
E.
None of the above.
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Final Exam Packet (Fall 2014)
Mock Essay Question
Resort Homes, Inc. (“Resort Homes”) is a developer of resort condominiums.
Resort Homes’ latest project, named Hide-A-Way Sands, is a 200 unit, beach-front, high-rise,
condominium complex. Resort Homes is confident that it will be able to sell quickly all 200
units. The only obstacle will be enticing potential purchaser to come visit Hide-A-Way Sands
which is located, predicably, in an out-of-the-way spot. Resort Homes believes that once people
see the Hide-A-Way Sands condominiums, with their beautiful ocean view balconies, and
modern floor plans, the units will sell themselves.
As part of its marketing campaign, Resort Homes sends out 200 postcards which read as
follows:
Dear Prize Winner,
You have been chosen to win $500!! To collect your prize money, come
spend an afternoon at our newest resort, Hide-A-Way Sands, before February
15, 2008. Hide-A-Way Sands is a beach-front, high-rise condominium
complex offering spectacular views and modern floor plans. Your visit will
include a VIP tour of the model condominium units and the resort grounds.
For directions, call us at 1-800-HIDEWAY.
Sincerely,
/signed/
President, Resort Homes
On January 1, 2008, Luke Lucky (“Lucky”) receives one of the postcards from Resort
Homes. On January 2, 2008, Lucky calls Resort Homes and asks to speak to the company
president (“President”). Lucky tells President: “I got your postcard. Thanks for the invitation to
come visit Hide-A-Way Sands. I will be arriving for my VIP tour and to collect my prize money
on January 10, 2008.” President responds: “See you then!”
Life became a bit hectic over the next few weeks for Lucky, so he had to amend his
plans. On January 9, 2008, Lucky sends Resort Homes a fax that says: “My plans have changed.
I will not be able to make it to Hide-A-Way Sands tomorrow. I will visit, instead, on February
10, 2008.”
On February 9, 2008, Resort Homes sends a letter to all of the people who were sent the
postcard described above. The letter says:
February 9, 2009
Dear Friend:
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Final Exam Packet (Fall 2014)
Earlier this year, we sent you an invitation to come visit our newest resort,
Hide-A-Way Sands. We have good news to report: Hide-A-Way Sands is
almost sold out. Because of the tremendous enthusiasm for this resort
property, our VIP tours are over booked. Unless we have already made
arrangements with you, we regret that we will not be able to provide you
with a tour or prize money. We hope we will see you at one of our future
resort locations.
Sincerely,
/signed/
President, Resort Homes
On February 10, 2008, Lucky drives two hours to Hide-A-Way Sands. Lucky walks in
the door of the sales office and is greeted by a Resort Homes sales agent (“Sales Agent”). Lucky
says: “Hi! I have come for my VIP tour!” Sales agent responds: “I’m so sorry, we are not
offering VIP tours any more. Our condos have sold like hotcakes. We only have one left!”
Lucky says: “Well, just give me my $500 then!” Sales Agent responds: “I’m sorry, I can’t do
that.” Lucky yells: “You mean I drove all this way and took a day off from work, and I get
nothing?!!” Sales Agent does not respond. Lucky storms out of the sales office. He decides that
he better take a long walk before getting back in his car, otherwise he is likely to have an
accident on the way home -- he is so mad. On his walk, he is impressed by the resort grounds.
The location is gorgeous. He is mesmerized by the beautiful sand and peaceful waves of the
ocean. After an hour of pure serenity, Lucky decides that he must have a condominium at HideA-Way Sands. He goes back to the sales office and buys the last condominium unit (Sales Agent
is only too happy to oblige him despite the fact that he left in a huff).
Back home, on February 11, 2008, Lucky receives the letter from Resort Homes dated
February 9, 2008. Lucky opens the letter, reads it. Lucky has mixed emotions. He is very
happy that he bought his Hide-A-Way Sands condo, but he is angry that he never collected the
$500. He fears that his resentment over the $500 may spoil his enjoyment of the condo. So, he
decides he better do something about it.
Lucky sues Resort Homes for the failure to pay him the $500. Will he prevail? In
answering, please make sure you address the argument(s) that would be made by both
Lucky and Resort Homes and give your judgment regarding which argument(s) should
prevail. Limit your discussion to issues discussed to date in this course. Do not discuss
damages or agency issues.
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Final Exam Packet (Fall 2014)
3. Final Examination Essay Questions (Fall 2008)
Final Examination
Contracts I, Law 202-12
Fall 2008
Professor Swaine
Essay One (60 minutes recommended)
John and Roger, two lawyers, retire following an adverse verdict finding that their
descriptions of gruesome fact patterns caused widespread emotional distress among a class of
jurors and other listeners. They decide to reboot, quite literally. Building upon their shared
passion for cowboy regalia, country and western music, and low-quality bourbon, they decide to
open JR’s Saloon (“Saloon”), which they envision as the mid-Atlantic’s leading nightspot for
line dancing and drunken yodeling. They form a fifty-fifty partnership (called “JRS”),
headquartered in Virginia, in which each has full authority to bind the partnership.
Unfortunately, entering the world of business proves more challenging than they had reckoned,
and they soon wish they had devoted more attention to the study of contract law.
John and Roger begin to learn the ropes while transforming an abandoned building into
their Saloon; their trials and tribulations with tile suppliers are particularly educational. They
eventually decide that the success of their Saloon depends on their main attraction. After some
brainstorming, they decide to contact Braman Bull Co. (“Braman”), a Maryland manufacturer
renowned for creating the world’s best mechanical bulls – just the thing for wannabe cowboys.
John and Roger telephone Braman and reach its head and namesake, Dawn Braman. When John
and Roger ask Dawn for a sales pitch, she responds gruffly, saying: “There isn’t much to talk
about other than which model you want and how much they cost.” Nevertheless, she warms up
when describing the advances in their latest model, the Ferdinand. Roger is so bowled over by
her description that even after he hears the list price – $10,000 – he blurts out “We’ll take one –
right away! We open in a week!” and hangs up. John and Roger then look at one another and
gulp, audibly.
Braman’s sales department faxes paperwork the next day. It is a daunting document,
entitled “Contract of Sale” and appearing under Braman’s distinctive longhorn emblem, and runs
15 pages in length. In addition to reflecting that JRS (described in the document as “Customer”)
will be purchasing from Braman (the “Company”) a Ferdinand model (the “Product”) for
$10,000, it includes clauses relating to attorney’s fees, dispute resolution, warranties, delivery,
and so forth. One of the terms, Clause 22, provides as follows:
22. Company will provide customer with such official Braman parts and
repair services as may be necessary to maintain the Product in operating
condition, including as necessary the complete replacement of Product.
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Final Exam Packet (Fall 2014)
Upon delivery and for four weeks afterwards, Company will provide
Customer the aforementioned parts and service as part of the initial
purchase price. Following this period, and for a period of twelve months
thereafter, Company will provide Customer the aforementioned parts and
service for a set additional monthly fee of $1,000, which amount
Customer is obligated as part of this Contract of Sale to pay by or on the
15th of each month.
John and Roger respond the same day with a brief fax, handwritten, on a piece of lined
notebook paper. It says in its entirety:
Hey dudes, thanks for the long fax. We love the Ferdinand and we wish to
purchase it for $10,000; that’s our deal. The only thing is, we need a final
written agreement between us for our records and probably for some kind
of legal reason.
Braman receives this but does not directly reply. However, within the week, Braman
ships the Ferdinand to John and Roger, and attaches to the exterior of the crate a copy of a
document entitled “Contract of Sale.” It is exactly the same as the document that Braman
originally sent. John and Roger note its presence but ignore it, so eager are they to examine the
Ferdinand – it has arrived on their opening night, and they quickly put it out in the Saloon’s main
room. They are amazed at the bull’s lifelike appearance, but worry at first over its value as an
attraction; even when powered on, the Ferdinand appears exquisitely peaceful, and the only
motion it evidences is a slight swishing of its tail and a wrinkling of its nostrils. Nevertheless,
John and Roger decide to give it a whirl. An hour or two later, after JR’s Saloon opens for
business, the Ferdinand seems to sense a cell phone buzzing near its hindquarters and goes
berserk, goring the cell phone owner (who does recover, albeit without a digestive tract) and
stampeding into the parking lot – where, after considerable destruction, its horns become locked
in the engine block of Roger’s 1988 Ford Ranger Pickup.
John and Roger are stunned. After extricating the Ferdinand from Roger’s truck and
returning it indoors, they discuss what they are to do. Roger wants to return the Ferdinand right
away, noting with relief that they haven’t paid Braman any money yet. John, citing the
enormous publicity the event has generated (on which he is capitalizing through a grotesque ad
campaign), argues instead that they should take advantage of Clause 22 and have the Ferdinand
repaired free of charge. Roger then wonders aloud if there is even any contract that JRS, or
Braman, could enforce, and what that contract’s terms might be.
Pretending that you are JRS’ attorney, assess the questions Roger is posing. Be as clear
and specific as possible, and assess the strengths and weaknesses of any arguments you consider.
In answering, please ignore any agency or tort questions you may identify. Also ignore
any impact that the nature of the Ferdinand’s malfunction may have on any unperformed
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Final Exam Packet (Fall 2014)
obligations – such as a claim that because a warranty was breached, no money is owed, or a
claim that John and Roger misused it. Assume, to the extent relevant, that it can easily be
repaired by Braman’s expert technicians.
Essay Two (55 minutes recommended)
In addition to the facts specified in Essay One, please consider the following additional
facts, for purposes of this Essay only. You continue to serve as JRS’s pretend counsel; their
partnership continues as before.
JR’s Saloon does booming business after the Ferdinand incident – its target audience
responds very well to the prospect of bloody mayhem. To accommodate the crowds, JRS plans
to build a second parking lot and, potentially, a second driveway. It enters into a contract with
Mary Maid to construct the second parking lot, but shortly after beginning she breaches the
contract and refuses to continue. JRS has not yet entered into an agreement for the second
driveway, but it pays Mike Mulligan $100 in exchange for its option to use (and pay for, at an
additional, stipulated rate) his services on that project if JRS chooses, in its sole discretion, to go
forward.
Then near-disaster strikes, again. Torrential rains fall during the night, flooding the area
that Mary Maid had started excavating and threatening imminently to wash away the Saloon,
which lies down a slope from the second parking lot site. Happily, Mike Mulligan and his steam
shovel happen by – he is traveling down the road during the wee morning hours, on his way to a
construction job just over the hill from the Saloon at the Popperville town hall. Mike winds up
saving the day. By working from 3 A.M. to 8 A.M. with his trusty steam shovel, he manages to
erect a makeshift dam out of earth that redirects the water under a nearby bridge and saves the
Saloon from being destroyed.
The next day, John calls you to discuss the situation, though he is short on details. He
explains that he has heard that Mike is asking to be paid $5,000 for his night’s labors, which
Mike claims to be reasonable for work of this scope and intensity. John is staggered at the
amount, and says he has heard several different explanations as to why Mike believes he is owed
the money:
•
The first explanation is that Mike was journeying down the road in his steam
shovel toward Popperville when he observed that the building water had caused
an imminent crisis at the Saloon’s site. Mike was apparently concerned that
someone might be on the premises at the Saloon and at risk, though as it turns out
the Saloon was deserted. (After relating this to you, John speculates that Mike
was already a devoted customer of JR’s Saloon, so he would do anything to avoid
seeing it ruined; he also supposes that Mike pitched in immediately so as to avoid
delay as much as possible, so that he could be on his way to Popperville.)
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Final Exam Packet (Fall 2014)
•
The second explanation is that Mike was journeying down the road in his steam
shovel toward Popperville when, consistent with the first explanation, he saw the
imminent crisis at the Saloon site. According to this second account, however,
Roger – upon learning afterwards of Mike’s heroic labors – was overcome with
joy and promised Mike that he would pay him $5,000. (After relating this to you,
John speculates that if Roger did so promise, Roger would have asked Mike to
agree in exchange to explicitly acknowledge that JRS would not be using Mike’s
services in building a second driveway – since spending $5,000 would dry up the
money JRS would have used on that project – and that Mike would have agreed.)
•
The third explanation also has Mike turning from his route toward Popperville to
respond to the imminent crisis, just as in the first and second explanations.
However, on this account, when Mike first arrived at the Saloon site, he
telephoned Roger’s cell phone – and Roger, once awake, volunteered without
hesitation to pay $5,000 if Mike and his steam shovel could protect the Saloon
from the surging water. Mike stayed, and the rest is history. (After relating this,
John speculates that, if Roger and Mike spoke in advance and Roger did promise
$5,000, Roger would have asked in exchange that Mike not only protect the
Saloon but also complete the paving of the second parking lot in order to earn that
kind of money.)
You press John for any additional facts. He adds that Mike’s delayed arrival to
Popperville that morning led to him being fired from that job and replaced the same day by
another steam shovel operator. When you indicate sympathy for Mike, John dryly notes that the
rainwater caused much worse flooding at the town hall, and that the steamshovel operator
working in Mike’s place – Mary Maid – disappeared with her steamshovel in the basement
waters, never to be seen again. John also says definitively that JRS will not be proceeding with
the second driveway project, as is its right.
Neither you nor John can reach Mike, Roger, or anyone else to discuss these
developments, so accept that each of the explanations is possibly true. John wants your
immediate assessment, based on each of three above accounts (coupled, to the extent relevant,
with consideration of his speculations), whether JRS should expect to pay $5,000, and what
obligations (if any) JRS and Mike owe one another. Please answer him, addressing each of the
three explanations in their original order. Be as clear and specific as possible, and assess the
strengths and weaknesses of any arguments you consider.
In answering, please ignore any agency or tort questions you may identify. Also ignore
any questions concerning the contract between JRS and Mary Maid (may she rest in peace).
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Final Exam Packet (Fall 2014)
4. Final Examination Essay Questions (Fall 2009)
Final Examination
Contracts I, Law 202-21
Fall 2009
Professor Swaine
Common Facts
It is sometime in the near future – but the law remains as it stands in 2009. Upon seeing
a large, empty storefront at an upscale local mall, D.C. resident Rowan Marrow had an inspiring
idea: creating a new store called Build-A-Zombie Workshop [ZW], a place where children and
other end-users can stitch together and stuff their very own zombie replica dolls. Rowan quickly
incorporates ZW, secures financing, hires a management team, and leases premises, setting up
his own corporate office in the back of what he dreams will become his flagship D.C. store. His
next steps are to figure out what he’s selling and how he’s going to sell it. These are the subject
of the following essay questions. Please consider each question independently from the other,
together with these common facts.
Essay One (60 minutes recommended)
Rowan Marrow has a very clear vision of how he wants the completed zombie dolls to
look – and the kind of accessories he will sell – but he needs assistance with the supply of dolls
parts and the entire in-store experience. He looks for help, naturally enough, on the internet.
Using a search engine, he searches for “ready to assemble body parts”; near the top of the results
page, he sees a paid advertisement for Franklin Stine, Inc. [FSI], which bills itself as the “first –
and last – stop for the assembly experience industry” that will “meet every merchant’s needs – or
your money back!” Rowan is sold. He follows the link to FSI.com, FSI’s site, desperate to get
his business started.
Visitors to FSI.com first encounter a home page that describes what FSI offers.
Customers like ZW specify what they want their end-users to make, and “FSI will do the rest”
within four weeks – supplying not only the materials for assembly, but also customized workflow diagrams for store layouts and, finally, user-friendly instructions for a retailer to copy and
give to end-users so that they can make their own creations at places like Build-a-Zombie
Workshop. Also on this home page are links to several other pages – an “About Us” page, an
“Investors” page, a “FAQs” page, a “Contact Us” page, and the like – but Rowan goes
immediately to the “New Order” page. On that page, customers are invited to upload an
electronic image and, using blank entry fields, provide not only their mailing and contact
information, but also details concerning the material they plan to employ, the size of the figure
they want end-users to create, the quantity of assembled figures (500 minimum) for which parts
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Final Exam Packet (Fall 2014)
are needed, and the price the customer is willing to pay FSI (input on a per-figure basis). As the
page reiterates, “FSI will do the rest.”
Rowan digests these requirements and works for a bit to produce a document containing a
scanned image of his zombie figure, which he proceeds to upload successfully. To the right of
the zombie image on the scanned page, Rowan has included highly detailed information
concerning the quantity of assembled figures for which he wants parts (enough for “500 figures,
subject to ZW approval”), a price (“$1.00 per figure, or $1.25 per figure at most”), the size of the
figure (with highly specific measurements), and materials (with specific instructions for widely
available components). Because Rowan provides all this information on the uploaded document
itself, he bypasses the (redundant) entry fields that are midway down the order page – and
ignores altogether the section at the bottom of that same page entitled “Terms and Conditions” –
and clicks “Submit Order Now.” A message appears stating “Thank you for your order –
because one or more fields were not completed, an FSI specialist may contact you shortly with
any questions. We look forward to doing business with you.”
No FSI specialist initiates contact, nor does anyone from ZW contact FSI. The next thing
that happens is that, within four weeks, ZW receives a special delivery shipping crate from FSI.
Rowan notes the sender’s address and, guessing what it is, takes only a few minutes to hand the
postman a postage-paid envelope, addressed to FSI, containing a check for $500 (Rowan does
not intend to get behind on bills). He opens the crate and sees inside ready-to-assemble materials
for 500 figures. He also sees a sealed envelope labeled “Build-A-Zombie Workshop: Work
Flow Diagrams and Assembly Instructions.” Rowan opens the envelope; upon reviewing the
enclosures, he is shocked to find that FSI’s instructions would have ZW’s end-users “animating”
their dolls with human tissue and massive jolts of electricity. Rowan decides that he will not
reproduce these instructions, and wonders whether he should have paid FSI.
Rowan later discovers something else in the crate -- a document entitled “Order
Confirmation.” As relevant here, the document includes an “Amount Due” of $625, together
with the following terms:
•
•
Clause 12, stating that “No refund will be permitted once the customer has
reviewed the customized work-flow diagrams and assembly instructions, or if the
ready-to-assemble materials are retained for more than one week.”
Clause 13, stating that “Disputes concerning this agreement are subject to
arbitration in Romania, under Romanian law.”
Rowan has not resolved what to do about the FSI order. Assess whether FSI has an
enforceable contract with ZW, what its terms would be, and Rowan’s options for coping with the
situation. Be as clear and specific as possible, and assess the strengths and weaknesses of any
arguments you consider. Do not worry about whether ZW’s performance or FSI’s performance
(e.g., the latter’s “animating” instructions) actually violates any agreement that may exist.
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Final Exam Packet (Fall 2014)
Essay Two (60 minutes recommended)
One of Rowan Marrow’s biggest tasks is to hire a store personality, someone to represent
the store in the media and greet customers entering the Build-a-Zombie Workshop [ZW]. ZW
conducts a global search through a talent agency called Brainhunter, which circulates “help
wanted” notices asking for applicants to submit to Brainhunter a cover letter and a video of
themselves speaking – mentioning only that a position is available as a English-language media
spokesperson and store greeter at ZW, a new U.S. retail company paying “competitive” and
negotiable” compensation.
After Brainhunter has screened countless submissions (for which screening it bills ZW,
although additional compensation is contingent on a successful placement), it receives a
submission from Igor, a resident of Transylvania (a region of Romania). Igor, who presently
draws a pitiful salary as a laboratory assistant, explains in his cover letter – he understands
English perfectly, and always makes himself understood in it as well – that he has long dreamed
of seeing the United States, and that he is excited at the prospect of receiving a better salary,
which (if he is budget-conscious) will provide him with the final amount necessary to establish
his own laboratory in Transylvania. Igor’s accompanying video submission shows his accented
but comprehensible English as well as scarring, sutures, and zippers criss-crossing his pale bald
head, all of which appear to match the ZW image perfectly. Brainhunter is ecstatic.
After Brainhunter conveys the materials to ZW, ZW asks Brainhunter to open discussions
with Igor about a position with them, and it provides Brainhunter with background information
regarding the position’s basic duties, compensation, and duration as it presently envisions them.
Brainhunter calls Igor to relay ZW’s interest to him, but Igor is so excited that he recalls very
little of the conversation. In that same state of euphoria, he writes down his approximation of
what was discussed on the back of a cured animal hide – but it is delayed by U.S. Customs when
they are unable to identify the animal’s species.
Also after the call, Brainhunter sends a letter to Igor incorporating the terms it originally
received from ZW, and it reads as follows:
Dec. 22
Dear Igor,
We are pleased to present you (hereinafter “Employee”) with this contract of
employment with Build-A-Zombie WorkshopTM (hereinafter “Employer”). As we explained
over the telephone, the terms are as follows:
1. Duties. Employee will serve as a store greeter and spokesperson. Any print,
photographic, video, personal, or visual appearance of any kind shall be solely as directed
by Employer.
2. Compensation. Employee will receive a salary of $10,000 per month, payable
in full on the last day of each month, pro-rated for any fractional month. Reasonable
travel and relocation costs, not in excess of $2,500, will be compensated by Employer.
3. Duration. This contract will remain in force until December 31 of the
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Final Exam Packet (Fall 2014)
following calendar year, barring any unexcused breach by Employee. Employee is
expected to report to work within one month from the date of this letter.
Please endorse this as a written memorial of your agreement and return it to ZW
at your convenience.
Yours truly,
Brainhunter Ltd.
Igor receives this letter and, upon reflection, believes that its terms are indeed the same
ones related to him in the telephone call – and notes, ruefully, that they are generally more
attractive than those he remembered writing to ZW, and he supposes that ZW may simply revert
to his proposal when it receives the hide. Still, anticipating his new life in the United States (and
his salary at ZW), Igor decides finally to do something about his appearance: dipping into his
savings temporarily, he pays for cosmetic surgery, from which he emerges the next day a quite
handsome man, kind of like a Transylvanian George Clooney. Unaware of this, at about the
same time, ZW tries to assess how it might use Igor, sharing his video with an advertising
agency it has hired. The advertising company shows it to a focus group – the vast majority of
whom are wildly enthusiastic, though one very young child is so scared that he loses control of
his bowels.
Igor leaves his life in Transylvania behind and departs for the United States. Upon
arriving, and within one month from the date of the letter, he reports for work at ZW
headquarters. Rowan at first fails to recognize him. After Igor introduces himself, Rowan
expresses his shock and disappointment at Igor’s post-surgery transformation, which he claims
violates their terms. After yelling for a while, he shifts gears, telling Igor that he will pay for
undoing Igor’s new appearance with a second surgery that will make him look as he did in the
video – and, seeing Igor’s dismay at hearing this, Rowan adds that he will also pay for a third
surgery after Igor stops working for ZW so that Igor can return to his present, Clooney-esque
state.
You are an attorney in private practice, and Igor has come to you, explaining the above.
He concludes, pitifully, by saying: “Igor scared. Igor doesn’t know if he has job promise with
ZW, or whether Igor did wrong thing. Igor also wants to know about surgery promise.” You
understand this to mean that Igor is uncertain about whether he and ZW have a binding and
enforceable employment commitment, and whether he violated any agreement they have. You
also understand that Igor is concerned about ZW’s offer to pay for his subsequent surgery,
particularly whether it can be made to abide by its promise for the third surgery.
Provide Igor with appropriate legal advice. Be as clear and specific as possible, and
assess the strengths and weaknesses of any arguments you consider. Assume that you (correctly)
explained to Igor that ZW cannot actually force him to undergo surgery (or to refrain from
undergoing surgery), and that it’s just a matter of potential liability for any promises – put that
issue to one side, along with any attempt to calculate damages that you conclude may be owed.
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Final Exam Packet (Fall 2014)
5. Final Examination – Instructions and Essay Questions (Fall 2010)
Final Examination
Contracts I, Law 202-14
Fall 2010
Professor Swaine
Instructions
PLEASE PLACE YOUR GW ID NUMBER AT THE TOP OF THIS PAGE.
YOU MUST RETURN THIS COPY OF THE EXAMINATION,
INCLUDING ALL OF ITS PAGES, AT THE END OF THE SCHEDULED
EXAMINATION. FAILURE TO COMPLY MAY DISQUALIFY YOUR
EXAM. YOU MAY NOT DISCUSS THIS EXAMINATION WITH ANY
STUDENT WHO HAS NOT YET TAKEN IT.
Materials
This is a limited open book exam. You may use the syllabus (and readings attached
thereto), textbook (Knapp, Crystal & Prince, Problems in Contract Law: Cases and Materials),
rules supplement (Knapp, Crystal & Prince, Rules of Contract Law, or its equivalent), and your
own notes or personally generated outlines. For clarity’s sake, this excludes commercial
outlines. A foreign-language-to-English (and vice-versa) dictionary, other than a legal
dictionary, may be used. You will also find a no. 2 pencil essential for the multiple choice
section.
Format and time allocation
The exam is three hours long. It consists of two sections: a Multiple Choice Section
(consisting of 20 multiple choice questions) and an Essay Section (consisting of two essay
questions). Suggested time allocation is as follows:
60 minutes
Multiple Choice Section – 20 questions, so approximately 3 minutes each.
60 minutes
Essay Section: Essay #1
60 minutes
Essay Section: Essay # 2
With any extra time, please review your essay answers and check that you have answered
all multiple choice questions (but please avoid using excessive time on the multiple choice
section).
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Final Exam Packet (Fall 2014)
Instructions for the Multiple Choice Section in Particular
•
Please fill in the appropriate bubble on the answer sheet provided. No consideration is
given to any other answer or explanation you may provide.
•
Answer each question (there is no penalty for guessing).
•
Unless the question indicates otherwise, assume that all of the facts occur in 2010.
•
Unless the question indicates otherwise, assume that the UCC (but not its proposed
revisions), the CISG, and the common law (including all of the Restatement (Second) of
Contracts) are in effect in all relevant jurisdictions.
Instructions for the Essay Section in Particular
•
Read each question very carefully. Note the relevant facts and potential issues.
•
Plan and organize your response before writing.
•
Address all plausible issues clearly and concisely, citing the facts, cases, and legal
principles relevant to your analysis. Where relevant, cite (or otherwise identify, as
clearly as possible) specific cases or provisions of the Restatement, UCC, or CISG that
inform your analysis.
•
To the extent necessary, you may make reasonable assumptions about facts not stated in
the problem, but state these assumptions – and how they affect your analysis – explicitly.
Otherwise, please describe any additional information you would need to make a
competent analysis and how it would be relevant. If you find the problem ambiguous in
some relevant regard, describe the perceived ambiguity and its significance.
•
Your answers should be written in essay form, using paragraph structure, complete
sentences, and so forth, and not bullet points or fragments. Explain any abbreviations
you use. You should not expect to receive credit for outlines, though they may be helpful
to you in composing your answer.
•
Do not overwrite – less can be more – and avoid wasting time discussing subjects not at
issue. At the same time, be aware that your conclusion on a particular point may be
debatable, and lawyers frequently argue in the alternative (so, for example, concluding
that one element of a test is not satisfied probably does not mean you should just leave
the other elements unexplored, and finding that one theory supports recovery nevertheless
allows you to consider others on the possibility arguendo that it does not).
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Final Exam Packet (Fall 2014)
•
Good answers are not one-sided. Carefully consider the strengths and weakness of a
particular position, but also indicate a conclusion, even if it is qualified or tentative.
Good luck!
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Final Exam Packet (Fall 2014)
I. MULTIPLE CHOICE
(60 minutes recommended – approximately 3 minutes each) Please be sure to
review the instructions for this section at the beginning of the examination.
Remember, select the best answer from the choices given, and indicate your
answers to each question on the separate answer sheet provided.
[REDACTED]
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Final Exam Packet (Fall 2014)
II. ESSAYS
Please review the instructions for this section at the beginning of the examination.
Essay One (60 minutes recommended)
It is December 2010. Uncle Shecky, whose real name is Sheldon Sheldon (“Sheldon”), is
a D.C. resident and well-known professional party clown. Sheldon is interested in selling his
wholly owned clowning business – SheckCo – and, upon training his replacement in the role of
Uncle Shecky, retiring. SheckCo’s assets include several months of future bookings on which
Sheldon hopes to turn a profit; a trailer that Sheldon originally purchased for $25,000; a
favorable long-term lease on a vacant lot (where the trailer sits when not on tour, Sheldon having
detached his personal vehicle); several sets of Shecky’s wigs, noses, costumes, and shoes of
various outlandish dimensions; and about $2,500 worth of party favors (“SheckyPacks”) and
Uncle Shecky-style costumes (“SheckySuits”) that Uncle Shecky sells via mail order.
While recently at the World Clown Convention in Atlantic City, Sheldon approached
Herschel Krustofski, president of Megamulti, a conglomerate that owns the hotel hosting the
Convention, to discuss the sale of SheckCo. Sheldon said to Herschel, “This is your lucky day. I
will sell you SheckCo – all its assets, rights, and responsibilities – for a mere $50,000, and I will
personally train your choice as my successor for up to 18 months.” Herschel glanced at Sheldon
and his name tag, then nodded. Herschel then said, “Send the papers to Simon & Simon, my
New York lawyers. They handle all these affairs.” Sheldon was ecstatic. He said “Beep beep!”
– his well-known signal of happiness – and Herschel watched him skip down the hall.
That evening, a Thursday, at the hotel, Sheldon fired up his portable typewriter and typed
the following on hotel stationary: “Sheldon Sheldon hereby agrees that he will sell SheckCo – all
its assets, rights, and responsibilities – to Megamulti for a mere $50,000, and I will personally
train your choice of my successor as Uncle Shecky for a period of up to 18 months.” He
removed the paper, put the typewritten page into an envelope without further ado, and mailed it
the next morning to Simon & Simon.
Early the next week, after Sheldon had returned from the Convention, he received a
document entitled “Final Contract of Sale” from Simon & Simon. For the most part, the Final
Contract elaborated without changing the substance of Sheldon’s proposal, including the sale
price of $50,000. The preamble, though, began by insisting that “This Final Contract provides a
final and complete statement of terms.” Near its end, too, the Final Contract contained a clause
providing that “Sheldon Sheldon will disclose to Megamulti any potential liability arising from
past performances,” as well as another clause providing that with respect to any such potential
liability, Sheldon would entirely indemnify Megamulti. These worried Sheldon, as he remained
concerned about several recent near catastrophes, particularly one involving his performance at a
five-year-old’s birthday party and the tardy arrival by a volunteer fire department, and he
strongly preferred that as few people know about the episodes as possible.
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Final Exam Packet (Fall 2014)
While still at the Convention, however – and prior to receiving Megamulti’s letter –
Sheldon fielded a telephone call from Beau Zeaux, a Mississippi native who explained that he
has been trying to break into the clowning business. After initial pleasantries, the parties had the
following exchange:
Beau: “I’d be honored to purchase SheckCo from you. I’d pay $75,000 for the company
if you’d also be promising to train me as the next Uncle Shecky.”
Sheldon: “Just be warned, it might take as long as a year and a half, maybe more, to be a
good Uncle Shecky! When do you need to hear from me?”
Beau: “Shoot, this money isn’t going anywhere. Tell me by the end of next week.”
Sheldon: “Promise?”
Beau: “You bet your life.”
Sheldon: “How about if you don’t hear from me by Friday at 5 PM, I’m in.”
Beau: “Sounds good.
It is now the Wednesday following the Convention, two days before the deadline Sheldon
discussed with Beau, and Sheldon has now received the letter from Simon & Simon. Based on
the above facts, evaluate whether Sheldon has an enforceable obligation to sell SheckCo and the
terms of this obligation, if any; advise further on what steps, if any, he might take to resolve
favorably his contractual situation. Be as clear and specific as possible, and assess the strengths
and weaknesses of any arguments you consider. Please do not concern yourself on this
examination with questions of tort law involving clowns and birthday parties.
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Final Exam Packet (Fall 2014)
Essay Two (60 minutes recommended)
A few years back – assume, though, that the Restatement (Second), UCC, and CISG were
in existence, and the law in effect was as stated in the textbook – Sheldon Sheldon was not yet
looking to retire as Uncle Shecky, but encountered a different contractual problem. One of
Sheldon’s neighbors, Bill Fryer, was moved to file a complaint against Sheldon seeking
monetary damages.
Bill’s complaint – in which he cast himself as Complainant, and Sheldon as Defendant –
consisted in relevant part of the following factual allegations:
1.
In his occupation as the professional clown Uncle Shecky and in the provision of
children’s entertainment, Defendant went on tour for extended periods of time,
during which periods he was often difficult to reach, having no portable
telephone, answering service, or other means of communication. In light of this,
Defendant routinely asked Complainant to take care of his mail while he was on
tour – which task Complainant understood to entail opening time-sensitive
correspondence and acting appropriately.
2.
During a recent extended tour, Complainant received on Defendant’s behalf a
letter from Defendant’s booking agent, Gaston Alphonse (“Gassy”), addressed to
Defendant. In the letter, Gassy noted that Defendant owed Gassy $5,000 in
commissions, and that $2,000 was more than six months overdue. The letter
stated that – unless payment of the $2,000 was received immediately, along with
assurance that the remainder would be paid – Gassy would contact all of
Defendant’s customers and canceling his bookings for present and future tours,
and would consider warning them that a deranged killer masquerading as
Defendant might be visiting their homes and threatening their children’s lives.
3.
Complainant was alarmed and regarded this as a credible threat, one potentially
putting Defendant and his livelihood in harm’s way. Complainant tried to contact
Defendant but was unsuccessful, for the aforementioned reasons and because
Defendant had not provided his itinerary. Complainant accordingly informed
Gassy that Complainant was wiring Gassy $2,000 to cover Defendant’s
commissions that were more than six months overdue, and guaranteed that all
Defendant’s commissions to Gassy would be paid, no matter what. Complainant
did in fact wire $2,000 immediately, and Gassy withdrew his threat.
4.
When Defendant returned from his tour, Defendant expressed his appreciation for
Complainant’s assistance and – though he claimed also that Gassy’s bills were
exaggerated – stated the following: “I’ll pay you back, Bill [Complainant], as
soon as I [Defendant] go over the bill from Gassy.” Although Complainant has
had numerous and sufficient opportunities, Defendant has not received any
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Final Exam Packet (Fall 2014)
monies.
5.
Upon learning that Complainant was on the verge of filing a legal action,
Defendant contacted Complainant and indicated that he wished to settle any legal
disputes, actual or potential, that related to the Gassy situation. Defendant
promised $1,000 cash in exchange for Complainant’s commitment to never file a
legal action arising from that situation and requested an answer “by noon
tomorrow.” Complainant immediately sought the assistance of a lawyer to
evaluate the settlement proposal, canceling an important business meeting in
order to do so and in order to complete his own evaluation. However, when
Complainant telephoned Defendant the next morning, with the intention of
reluctantly accepting Defendant’s proposal, and began by stating he had consulted
with a lawyer, Defendant stated categorically that this consultation was a
“litigative act” that had the effect of rejecting Defendant’s proposal, and that the
settlement offer was no longer available. Defendant then said he could now only
offer $750 for the same terms.
Accepting the factual allegations in this summary as true, based on this pleading, does
Bill have an enforceable legal basis for establishing Sheldon’s liability to him? Be as clear and
specific as possible, and assess the strengths and weaknesses of any arguments you consider.
Please do not concern yourself with questions of civil procedure relating to the sufficiency of the
allegations.
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Final Exam Packet (Fall 2014)
6. Final Examination – Instructions and Essay Questions (Fall 2013)
Final Examination
Contracts I, Law 6202-11
Fall 2013
Professor Swaine
Instructions
PLEASE PLACE YOUR GW ID NUMBER AT THE TOP OF THIS PAGE.
YOU MUST RETURN THIS COPY OF THE EXAMINATION,
INCLUDING ALL OF ITS PAGES, AT THE END OF THE SCHEDULED
EXAMINATION. FAILURE TO COMPLY MAY DISQUALIFY YOUR
EXAM. YOU MAY NOT DISCUSS THIS EXAMINATION WITH ANY
STUDENT WHO HAS NOT YET TAKEN IT.
Materials
This is a limited open book exam. You may use the syllabus, textbook (Knapp, Crystal &
Prince, Problems in Contract Law: Cases and Materials), all course and rules supplements
(including Knapp, Crystal & Prince, Rules of Contract Law, or its equivalent), and your own
notes or personally generated outlines. For clarity’s sake, this excludes commercial outlines. A
foreign-language-to-English (and vice-versa) dictionary, other than a legal dictionary, may be
used.
Format and time allocation
The exam is three hours long. It consists of two sections: a Multiple Choice Section and an
Essay Section. Suggested time allocation is as follows:
54 minutes
65 minutes
55 minutes
Multiple Choice Section – 18 questions, so approximately 3 minutes each.
Essay Section: Essay #1
Essay Section: Essay # 2
With any extra time, please review your essay answers and check that you have answered all
multiple choice questions (but please avoid using excessive time on the multiple choice section).
Instructions for the Multiple Choice Section in Particular
-23-
Final Exam Packet (Fall 2014)
•
Please pencil in the appropriate bubble on the answer sheet provided. No consideration is
given to any other answer or explanation you may provide.
•
Answer each question (there is no penalty for guessing).
•
Unless the question indicates otherwise, assume it is December 10, 2013. You may
assume that the UCC (as revised with regard to its Article 1, but not its Article 2), the
CISG, and the common law (including consideration of the Restatement (Second) of
Contracts) are in effect in all relevant jurisdictions.
Instructions for the Essay Section in Particular
•
Read each question very carefully. Note the relevant facts and potential issues.
•
Plan and organize your response before writing.
•
Address all plausible issues clearly and concisely, citing the facts, cases, and legal
principles relevant to your analysis. Where relevant, cite (or otherwise identify, as
clearly as possible) specific cases or provisions of the Restatement, UCC, or CISG that
inform your analysis.
•
To the extent necessary, you may make reasonable assumptions about facts not stated in
the problem, but state these assumptions – and how they affect your analysis – explicitly.
Otherwise, please describe any additional information you would need to make a
competent analysis and how it would be relevant. If you find the problem ambiguous in
some relevant regard, describe the perceived ambiguity and its significance.
•
Write your answers in essay form, using paragraphs, complete sentences, and so forth,
rather than bullet points or fragments. Feel free to use section headings. Explain any
abbreviations you use. You should not expect to receive credit for outlines, though they
may be helpful to you in composing your answer. Be clear.
•
Do not overwrite – less can be more – or waste time discussing subjects clearly not at
issue. At the same time, be aware that your conclusion on a particular point may be
debatable or simply incorrect, and lawyers frequently argue in the alternative (so, for
example, concluding that one element of a standard is not satisfied probably does not
mean you should just ignore the other elements, and finding that one theory supports or
defeats recovery nevertheless allows you to consider others arguendo).
•
Good answers are not one-sided. Carefully consider the strengths and weakness of a
position, but also indicate a conclusion, even if it is qualified or tentative.
-24-
•
Final Exam Packet (Fall 2014)
Assume you are writing on December 10, 2013. You may assume that the UCC (as
revised with regard to its Article 1, but not its Article 2), the CISG, and the common law
(including consideration of the Restatement (Second) of Contracts) are in effect in all
relevant jurisdictions.
Good luck!
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Final Exam Packet (Fall 2014)
I. MULTIPLE CHOICE {REDACTED}
(54 minutes recommended – approximately 3 minutes each) Please be sure to
review the instructions for this section at the beginning of the examination.
Remember, select the best answer from the choices given, and indicate your
answers to each question on the separate answer sheet provided.
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Final Exam Packet (Fall 2014)
II. ESSAYS
Please review the instructions for this section at the beginning of the examination.
Essay One (65 minutes recommended)
Sanford “Big Sandy” McSorley, an aging widower, owns and lives on a sprawling 7,000
acre property – known as “Sandy Ranch” – in the western United States. Sandy Ranch has
potential value in terms of mineral extraction and agriculture, but it is mostly undeveloped; Big
Sandy cultivates enough hay to feed a small stable of horses, which he uses for riding lessons
and similar purposes, but even that crop is partly consumed by a herd of bison that roams freely
within the ranch’s confines. His only daughter, Sandra “Little Sandy” McSorley, spent her
childhood on Sandy Ranch before decamping for Los Angeles, where she is a successful plastic
surgeon. Big Sandy runs Sandy Ranch with the assistance of his trusted foreman, Lefty Gauche.
As Big Sandy enters his sunset years, he contemplates what is to become of Sandy Ranch. He is
very unsure of its value, and decides to discover more about its market value before proceeding.
Fortuitously, Big Sandy is contacted by Boris Nataskia, a Russian entrepreneur, who
wants to talk to him about buying Sandy Ranch. Boris invites Big Sandy to dinner at a local
restaurant, at his expense, to discuss the matter; Dusty, the bartender, witnesses what transpires.
Big Sandy dutifully brings with him a specification of Sandy Ranch’s property lines – a
notarized copy of the official deed that he submitted to the state registrar of lands – and describes
Sandy Ranch’s terrain and features (e.g., its mineral deposits and its hay production, including
the latter’s vulnerability to the ranch’s bison herd). Upon showing the deed to Boris and
finishing his description, Big Sandy declares that “For all that I’m asking a price of $7.5
million,” confident that this is higher than Boris or anyone else can actually pay. To his surprise,
Boris does not seem at all startled by the price. Boris does ask, however, whether he might be
permitted to pay the sum in installments, explaining that he will need at least three months to
liquidate his holdings in some unprofitable real property investments overseas, in order to
minimize losses from selling on an accelerated schedule. Big Sandy just stares at him, slackjawed. Patiently, Boris writes the following on a piece of notepaper – “$7.5 million, not less
than $1.5 million in three months, balance to follow as we agree” – that he signs and pushes
across the table to Big Sandy. The two shake hands and part company.
A few weeks later, Big Sandy is on the lip of a canyon gazing at the sunset when he is
startled by the sudden appearance of the bison herd; he plunges over the edge and is presumed
dead. Little Sandy and Lefty come promptly to you for legal advice. As they explain, after word
got out about Big Sandy’s accident, Boris Nataskia contacted them extend his condolences and
to explain that he “had a deal with” Big Sandy; beyond corroborating Dusty’s narrative, he does
not elaborate on what he means. Each is newly upset, for different reasons, at this development.
Little Sandy recalls fondly her time growing up on the ranch. She reports that Big Sandy told
her frequently that the ranch would one day be hers, as soon as he was ready to retire and she had
demonstrated her willingness to live on the ranch (and the money to keep it afloat during lean
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Final Exam Packet (Fall 2014)
times, of which he had experienced plenty). She notes her financial success as a plastic surgeon,
and that she has dutifully returned to the ranch during virtually every vacation since leaving for
college, even admitting that she did so primarily so that Big Sandy wouldn’t change his mind. In
response to your questions, Little Sandy estimates that Sandy Ranch is actually worth at least
$10 million, and states authoritatively that Big Sandy has received no money to this point from
Boris.
Lefty, on the other hand, is devoted to the bison, notwithstanding Big Sandy’s
experiences with them. As foreman of the ranch, in addition to dealing with the horses and other
chores, Lefty spent considerable time diverting the herd from Big Sandy’s hay crop. And while
monitoring the herd and its whereabouts, he volunteered many a long and bitter night protecting
the bison from marauding wolves and even a rustler or two. Not long before his accident, Big
Sandy told Lefty quite earnestly that “You love them buffalo so much, Lefty, they’s yours when
I pass, jus’ keep ‘em off the hay,” to which Lefty gratefully assented. Unsurprisingly, then,
Lefty is upset to learn that Boris considers that he has a deal relating to Sandy Ranch – and its
bison herd as well.
Based on the above facts, evaluate: (a) whether Boris has a legally enforceable claim
of some kind relating to Sandy Ranch; (b) whether Little Sandy has a legally enforceable
claim of some kind relating to Sandy Ranch; and (c) whether Lefty has a legally
enforceable claim of some kind relating to the bison herd.
Analyze these questions in terms of the materials and topics in Contracts I. You
should assume, accordingly, that Sandy Ranch (and the bison herd) was the property of
Big Sandy, and ignore any potential restrictions imposed by property law, trusts and
estates (including because you know nothing about his will), natural resources, or
conservation law (or rules relating to the unauthorized practice of law by you). Also, it
suffices to answer the questions above; do not worry about how to reconcile any competing
claims that you perceive to be viable, or whether one or the other party is ultimately
entitled to damages or any other remedy.
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Final Exam Packet (Fall 2014)
Essay Two (55 minutes recommended)
Ignore, for purposes of this question, any facts suggested by Question One; likewise,
nothing in this question should influence your answer to Question One.
Nataskia Industrial Company (NIC) is a multinational conglomerate. NIC specializes in
real estate and minerals development, but has decided for the very first time to diversify into
manufacturing consumer products – specifically, boots of fine bison leather. It conducts a
careful search for the necessary equipment and identifies Stampede Inc., which designs and sells
machinery that cuts leather and other fabrics for use in products (for short, “stampers”). NIC’s
purchasing department calls Stampede’s sales head, Sally Hedd, and after explaining in detail the
kind of machine it desires and its budget, asks if Stampede is interested – Hedd says that it is
indeed and will get right on it. NIC’s purchasing department says that for quality control
purposes, all contracting documents must be submitted to NIC through its “Purchasing and
Sales” web site, and Hedd indicates her understanding.
On May 1, Stampede finalizes a document, entitled “Agreement for Sale,” which
describes the parties, describes in detail the specification of the customized stamper (entirely in
keeping with the telephone conversation), a price of $80,000 to be paid on delivery (which is
within NIC’s budgetary limits, as signaled during the conversation), and provides for delivery to
NIC premises by September 30, in addition to a variety of standard terms that are not relevant for
purposes of this question. Hedd dutifully visits the NIC web site. Hedd selects the button
labeled “Selling to NIC” and is prompted simply to upload her document; she dutifully uploads
the above-described “Agreement for Sale” document.
Very shortly thereafter, she receives a brief email from NIC – politely directing her
attention to the attachment – with a document, called “Order,” attached. Clause 1 of the Order
notes and incorporates by reference Stampede’s “Agreement for Sale,” which is appended to the
document, save to the extent inconsistent with or supplemented by the Order. Clause 2 provides
for delivery not later than August 1. Clause 3 provides that Stampede guarantees that it will
indemnify NIC for any damages or penalties owed by NIC due to any delays in production
attributable to the presence, absence, or malfunction of its machinery. The other clauses are
relatively few and in any event not relevant for purposes of this question.
Hedd prints her previous “Agreement for Sale” document, hand-writes “This time I mean
it!” across the top, scans that document, and uploads it via the NIC web site. Very shortly
thereafter, she receives a brief email from NIC with an attachment that is exactly identical in
every possible respect to the one it sent previously. After Hedd and her colleagues examine this
document, they decide simply to go ahead. Other than a brief call to NIC to ask about the tensile
strength of bison leather – following which Stampede ascertained that it could employ as part of
its stamper a piece of equipment originally developed for making rubber galoshes – Stampede
did not communicate further with NIC, and it proceeded to manufacture the stamper.
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Final Exam Packet (Fall 2014)
Due to changes in its backlog of orders, Stampede is able to complete its manufacturing
ahead of its expected schedule, and is in a position to deliver on August 31. When it calls NIC’s
purchasing department to alert it to the impending delivery, NIC tells it not to bother, claiming
that the stamper was due by the August 1 deadline. NIC also complains that its first and major
customer canceled its order due to delay that is solely the result of the unavailability of the
stamper as of August 1.
When Stampede sues NIC in federal district court, NIC moves to dismiss and/or for
summary judgment, on the grounds that (a) there is no enforceable agreement between the
parties; (b) if there is, Stampede has breached it by failing to deliver by August 1, and NIC has a
valid and substantial counterclaim for indemnity.
Evaluate NIC’s contentions. As with Question One, restrict your answer to the
materials and topics addressed in Contracts I; thus, for example, ignore any civil
procedure questions you may discern. You should also assume for purposes of this
question that the failure to deliver by a set deadline (whatever it might be) is a breach of
contract, and ignore any damages issues you discern.
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Final Exam Packet (Fall 2014)
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7. Sample Student Essay Answers (Fall 2010)
8. Sample Student Essay Answers (Fall 2013)
*G-F.-11-1*
G
Institution GW Law School
Exam Mode Closed
Extegrity Exam4 > 13.10.21.0
G
Course / Session F13 Contracts I - Swaine
G-F.-11-1
Section All Page 1 of 11
__________________________________________________________________________________________
Answer-to-Question-_1_
(a) Does Boris have an enforceable claim to Sandy Ranch?
Borris likely does not have an enforceable claim to Sandy Ranch.
Firstly, it must be determined which law applies to the
transaction.
The predominant purpose of this transaction is the
sale of real property, Sandy Ranch.
While the sale could be
construed to include chattels, i.e., the bison and horses, it is
the 7k acres with great potential mineral resource rights and
some agricultural buildings that appear to represent the majority
of the transaction and thus, the UCC or CISG does not apply.
Janusch; Princess Cruises.
See
Only the common law does. Note that
if this transaction were found to be one for the sale of goods,
the CISG would likely apply because both B. Sandy and Boris
appear to be merchants in the field with Sandy's obvious
expertise as a rancher and Borris' real estate investing, assumig
Russia is a party.
Secondly, the potential conclusion of a K should be considered.
It does not appear that a K was every concluded between the
parties.
B. Sandy did in fact make a seasonable offer to Boris,
because he offered the Ranch to him with a definite price term
and a detailed description of the land, followed by saying "[f]or
all that I'm asking," suggesting that only assent was needed by
Borris to conclude a K.
While it is true that B. Sandy secretly
never inteded to sell the land, his outward manifestations only
could be reasonably interpreted as indicating a willingness to
enter into a bargain and Boris had no reason to know of his
subjective intent.
concluded.
Thus, it is possible that a valid K could be
See Lucy v. Zehmer (even though not serious about
sale, valid K because of objective interpretation of actions);
Ray v. Eurice (understanding of party with less information
controls).
Boris did not accept this offer orally, hoever,
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because he only inquired as to the timing of payment and did not
definitely indicate that he wanted to conlcude the K.
Boris'
writing also should not be considered a proper acceptance because
it violates the mirror image rule by altering the terms of the
offer via its change in paymens.
counter offer.
Thus, it may be considered a
B. Sandy did not express acceptance: he did not
counter sign or even orally express assent. Plus, his silence
cannot be construed here to evince an intent to enter into a
bargain.
As he left and apparently never spoke to Boris again,
he never accepted the counter.
Note that a handshake at the end
of the meeting, after Sandy saw the naplin, is also not likely to
be considerer assent given the context of this business custom.
Note that if the napkin is instead construed to be a proper
acceptance or that Sandy had expressed assent, i.e, that it did
not violate the mirror image rule, a valid K would have been
formed. While the napkin leaves open the ultimate
payment plan,
the fact that it does call for an upfront payment of 20% of the
total price would suggest that this is something more than a
tentative agreement to agree.
By making part payment to Sandy,
the parties would already be committed to the K under the
priciples of reliance and the statute of frauds, and therefore
the lack of a set plan at the time of formation would not affect
the ultiamte obligation.
Thirdly, it must be considered that, if a K was, arguendo, formed
whether it would be enforceable.
Because this is a K for the
conveyance of land, it is within the statute of frauds.
Thus, a
written memorandum setting forth the core terms and signed by
Sandy is needed for Boris to be able to enforce.
Here, there is
no evidence that Sandy ever signed Boris' note nor exchanged any
further correspondence with him.
Thus, there appears to be no
memorandum within the statute of frauds and hence, assuming that
a K was formed, it would not be enforceable.
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Again assuming a K was formed, the K could be enforceable if
certain statute of frauds exceptions apply.
First, there could
be part performance under § 129 if Boris relies on the alleged K
to change his position detrimentally.
Actions such as payment,
taking possession of the land, or makin improvements would be
considered by the court. It does not appear that those apply as
Sandy retained the land and there is no evidence of payment.
There is also potential for general reliance on the K, if Boris
commits foreseeable detrimental actions.
Most likely, the
actions in reliance by Boris would be the holdigs he said he
needed to liquidate for this transaction.
In this case, while
the action would be foreseeable, the exception still would
probably not apply because Boris's holdings were apparently
unprofitable to him and thus he benfitted; i.e., no injustice
would be prevented by enforcing the K.
If the UCC applied, i.e., this was considered a sale of goods,
the parties would have a valid K.
Boris' napkin would be an
effective acceptance under § 2-205 because it was not epressly
and unequivocally limited to its new payment terms.
Under §2-
205(2), by virtue of both parties being merchants, the payment
terms would likely come in automatically because they do not
matterially allter the contract by imposing unreasonable surprise
(a reasonable merchant would assent) or surpise and hardsip (no
change in the economic benefit to Sandy).
The K would fall under
the statute of frauds because it is for more than $500, but would
not be enforceable.
There, again, is no signed memoranda from
Sandy and while Boris' napkin could operate as a merchant's
confirmation, it would not be sufficient regardless of whether
Sandy objects or signs it because it does not state a quantity
term.
No other exception would apply (part performance, special
manufacture, or admmision.
If the CISG applied, there would also be a valid K because the
napkin would function as an accpetance that immaterially altered
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the K under art.19(2).
The CISG is silent on the statute of
frauds, and the analyis would thus be identical to the common law
one above.
(b) Does L. Sandy ("L") have a legally enforceable claim to Sandy
Ranch?
L likely does not have a legally enforceable claim to Sandy
Ranch.
Again, the common law best applies.
There is no proposed sale to
L, and this is best understood regarldess to be about real
property.
Foremost, it likely would be argued that the promise was
illisory.
Because B said he would conevy the ranch "when he was
raedy to retire," the promise itself could be performed at the
sole pleasure of B, and he could decide never to retire.
On the
contrary, though, this condition could be considered a contingent
event that does not render it illusory in view of Marshall
Durbin.
It could also be argued that this contigentcy was in
fact never met before B's sudden death, and thus that the promise
is not operative.
As he had been contemplating his sunset years,
though, it is possible he was in fact ready to retire.
If the promise is not illusory, it must be determined if this
promise is binding.
This would be so is for consideration that
renders the promise enforceable.
In exchange for the Ranch, B
promised L the ranch if she showed her willingness to live there
and had the money to support it.
While L did apparently attempt
to do so by visitng the ranch during vacation, this is likely not
valid consideration.
For consideration to be valid, L would have
to be acting to her detriment and to B's benefit, such that the
action actually induces B to make the promise.
Here, it can
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hardly be said that visiting family is a material detriment to L,
and a resulting benefit to B, even if it was only done for the
purposes of getting the Ranch.
Furthermore, that these actions
were apparently a condition placed on the gift of the Ranch by B
but one that lacked any material benefit also weighs against
there being consideration.
If, for example, L had use her
signifiant earnings to prop up the Ranch or worked there at B's
request, there would be a stronger claim to consideration.
L's
purported consdieration, though, simply does not pass the
benefit/detriment test.
Another possible avenue for the promise to be enforceable is
reliance by L.
If it is found that L foreseeably and
detrimentally relied upon the promise of the Ranch, it could be
enforced to prevent injustice.
Here, L's reliance is apparently
having visited the the ranch during her vacations.
As with
consideration, this could hardly be considered detrimental to L
and further, has not actually changed her position permanently in
anway moving forward. While this these visits could be forseen in
light of the requirement to desmonstrate the willingness to live
there, enforcing the promise to convey the Ranch would do little
to actual remedy this injustice.
Instead, at best, L could have
a claim to part of the ranch solely to compensate her for her
losses.
As L apparently did not provide any services to B on the ranch,
she likely has no restitution claims as well.
If there is a valid promise, it would fall within the statute of
frauds because it is for the conveyance of land.
There does not
appear to be a sufficent memorandum against B. L's best avenue is
for promissory reliance, which would need to be of a definite and
substantial nature. It is unlikely that the visits would be
considered as such because they were to family and did not reuslt
in any permanent changes in her life.
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(c) Does Lefty have a legally enforaceable claim to the bison?
Lefty likely does not have a legally enforceable claim to the
bison.
This is not a transaction for the sale of goods, so the common
law applies only.
B did in fact promise the bison to Lefty, but it must be
conisdered whether this was enforceable.
not supported by consuderation.
First, it was likely
B apparently made the promise in
recognition of Lefty's services, which are inadequate past
consideration.
Additionally, services rendered per an employment
agreement are not valid consideraion.
Second, the promise to
"keep 'em off the hay" that B wanted from Lefty would also not
suffice, as B would not benefit from the action after death and
Lefty would arguably not suffer a detriment.
Further, this
promise for the future was not what induced B to make the
promise.
Lefty apparently has also not acted in reliance on the promise,
which could render it enforacebale to prevent injustice.
There
is no evidence that since it was made, that Left has foreseeably
and rasonably acted to change his position.
IF there were such
actions, LEft would have a better claim to the bison.
Lefty also likely does not have restitution claim to the bison.
While the promise was made in condieration of LEfty's services,
there is no evidence that Lefty was not compensated for his work
as a foreman and thus B could not be said to have been unjustly
enriched by not paying LEfty.
Thus, the promise would not be a
"moral obligation" made in light of extant unpaid debts.
Note
that if the bison were the ultimate payment for Lefty, whould was
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neved given wages but did intend to charge, B would have been
unjustly enriched from his servies and the promise culd be
enforeced in order to make good.
Note that if the promise is binding, it would not be within the
statute of frauds because B's death could be performed withing a
year of the promise.
Thus, it would then bee enforceable.
---------------------------------------------------DO-NOT-EDIT-THIS-DIVIDER---------------------------------------------------Answer-to-Question-2
(a) Is there an enforceable agreement between the parties?
There is likely an enforceable agreement between the parties.
The UCC likely governs this transaction because
it appears that
both NIC and Stampede are domestic companies (or at least
multinations with operations in the U.S.) contracting for the
sale of goods.
Note that it this were an itnernationa
transactipn, the CISG would apply.
A K was potentially concluded during the parties' telephone
conversation on May 1.
During this conversation, the parties'
respective sales and purchasing heads discussed
and agreed to
all of the core terms, including the specs, price, a delivery
date of Sept. 30, and quantity.
As Hedd said she was interested
and would get right on it, this could be a sufficient expression
of assent to enter into a bargain.
Further, that NIC directed
Hedd to visit its website apparently submit documents also
evinces the conclusion of a K because the formal agreement
apparently conteplated was a mere formality for apporval.
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Importantly, the documents were directed to the sales and
pruchasing department for qaulity control and not to legal,
suggesting that the bargaining was concluded.
Even if this K wsa
incomplete, on account of the many terms that accompany large
commercial transactions, that the core terms were included does
make for a valid K.
The subsequent dueling forms would be best
understood to be proposals for modification that were not
accepted.
Assuming a K was not formed on the phone, one also would have
been formed during the the parties' sending of forms back and
forth.
Here, Stampede would be considered the offeree by sending
its Agreement for Sale.
NIC response is best conisdered an
acceptance, because it agrees to Stampede's forms with some
changes and additions, but is not explicitly limited to
acceptance to the new terms.
Under 2-207(1), this form would
operate as an acceptance with the additional terms proposals for
addition.
The second exchange of forms also woudl result in the formation
of a K if the first did not.
In this case, the NIC response
would be considered a counter offer, that Stampede simlarly
accepted by responding with its form.
BEcause the NIC response
incoporated by reference the Stampede Agreement for sale, the
sending of this doc by Stampede would be conisdered assent.
Further, because Stampede's second Agreement for Sale was not
EXPRESSLY limited to the terms therein, as was requred in Brown
Machine, it is an effective acceptance under 2-207(1).
The
changed terms would likely be exlcuded.
The second and identical NIC response would similarly be an
acceptance to HEdd's second form (see above).
And if it were
not, Stampede ultimately would be found to have accepted by
conduct by virtue of going through with the manufacture of the
stamper.
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This K would also be found enforceable.
BEcause the value of the
goods as more than $500, the K would be within the statute of
frauds. There is apparently no sufficient memorandum, because the
parties' dueling forms do not appear to have been signed.
Regardless, though, this K would meet at least the special
manufacture exception.
The stamped was made to NIC's custom
specifications, was not made in the oridnary course of business,
and was actually made.
Note that weighing against this excpetion
is the use of an off-the -shelf part that could render the
stamper usful to other customers, but on the balance the
excpeiton likely applies.
The K could also fall under the
merchant's confirmation exception, but this is unlikely as the
confirmations exchanged were not signed and NIC is probably not a
merchant because it is new to this industry.
If the CISG were to apply, there would still be a contract.
with the UCC, this K would have been formd over the phone.
As
Note
that if it were found not to have been formed then, though, the
dueling forms would not have concluded a K. THis is because they
materially altered the terms, especially the date of delivery,
under art.19(3) and were not proper acceptances under art.19(1).
The CISG is silent as to the statute of frauds and the above
discussion is best understood to represent the analysis.
(b) Are the August 1 terms and indeminification terms
incoporated?
NIC likely does not have an indemnification claim.
Again, UCC applies.
Assuming from the above that K formed came out of the telephone
conversation, the terms at issue are not part of the K.
The
terms discussed and agreed to then had a delivery date of Sept.
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30 and made no mention of indemnification.
Thus, under these
terms, Stampede is incompliance with the K by being ready to
deliver byt Aug. 31.
Per the above, the telephone K is
enforceable by virtue of the special manufacture exception.
While the subsequent form dueling is best understood to be
proposals for modification, that the last form from NIC was not
objected to could result in modification.
If the parties are
both merchants, immaterial changes could autmoatically be
incorporated under 2-207.
Here, NIC is probably not a merchant
because it is brand new to the industry and is not one of
ordinary skill therein.
Assuming it is a merchant (stampede
clearly is), though, the August 1 delivery term would likely not
be found eligbile for automatic incorporation because it is a
different term from Hedd's perceding agreement for sale and under
the majority approach, different terms are not boruhg in
automatically.
As to the indemnification term, it likely does
not come in automatically to the K because it is a material
change.
It would be found material under both the unreasonable
surprise test, because no merchant would reasonably agree to a
term for unndeminifcation for delays in production, and surpise
and hardship, because would impose a significant economic burden
on stampede and was not expected by it.
ADditionally, the "this
time I mean it" could conceivably be taken as a prior objection,
but this is a strech argument due to its lack of specificity.
While Stampede ultimately went ahead with its manufacturing under
the K, it must explicitly have assernted to material changes for
them to be incorporated into the K.
There is no evidence
indicating that here.
Note that the analysis would be identical for considering the
battle fo the forms as offer/acceptance.
The deletion and
addition of the indeminifcation term would material and thus not
eligble for autmoatic incorporation, again assuming NIC is a
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merchant.
It must be also noted that 2-207(3) indicates that in situations
like tis one, where the parties by conduct indicate they have a
contract (Stampede: manufacturing; NIC: taking orders) but there
is no single memorandum, the K comprises only those terms on
which the parties' forms agree. Here, those are only the terms of
the Agreement for sale, minus the delivery date and exluding the
indemnification term.
Under the CISG, it it applied, the analysis would follow a
similar course: the telephone K terms would likely control.
If
not, however, and the dueling forms are considered,the Stampede's
ultiamte manufacture of the goods would mean that NIC's final
offer controls.
The changes it made to athe agreement for sale
were amterial and thus it was the final offer.
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Answer-to-Question-_1_
note - "Restatements section..." is abbreviated as "R"
Choice of Law
As this is a contract for real estate predominately, the
common law applies. Goods may consist of some small part of it,
but no goods are actually listed alongside the land, the
deposits, the herd, and the crops. Therefore, we must assume that
neither the UCC nor the CISG apply (Boris' foreignness
notwithstanding).
Boris and the Ranch
Agreement?
First, there is the question of whether Boris and Big Sandy
even came to an agreement. There are three incidents of note. The
verbal price quote, the written quote and the handshaking.
The initial price quote really can't substantiate an offer
because an offer must have clear terms and manifest an intention
to be bound. Since "for all that I am asking..." does not name a
particular offeree and the "am asking" language seems to denote
some generality, this statement would likely be analogized to the
first letter in Lonergan. This type of statement is much like a
form letter providing basic information of starting terms without
actually providing the power of "yes" to the offeree. Therefore,
this normally should not be considered an offer. Perhaps a court
could infer that although this is a general statement, the only
person available to hear it was Boris and therefore there was
some objective directness to its meaning; plus, the provision of
an actual solid number does provide some certainty of terms.
However, the court might balk at the certainty of "for all that"
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as unclear terms. Therefore, on balance this is probably not an
offer.
Furthermore, Boris' immediate inquiry is also not an offer
since it is simply hypothetical and does nothing to indicate an
intentional to be bound at that point.
However, Boris writing on the piece of paper could come
close to an offer. It certainly has a clear price term. But it
isn't exactly clear on what is being purchased for that land.
There is no statement of what is exchanged for $7.5 million and
to this point no one has clarified what "for all that" exactly
means.
If that was an offer, then Big Sandy would seem to have
accepted it. The handshake would likely satisfy an objective
manifestation of assent. This is a normal formality for being
entering agreements with one another and therefore could
substitute a simply "yes" in assenting to an offer. Even if Big
Sandy didn't actually mean to agree at that point, like in
Normile, the subjective intent is irrelevant and Boris could
reasonably believe that he was entering into an agreement.
However, if the previously mentioned weaknesses in Boris' writing
are fatal to that being an offer, the court might just take the
handshake as progress in negotiations - this payment scheme would
be acceptable, if an offer were made and if it were accepted.
Roughly, the court would likely find that these
circumstances did provide terms certain enough for their
enforcement in court. The "for all that" could reasonably be
linked to description of the ranch immediately before it, and the
price term could be reasonably linked to those items for sale.
Therefore, despite weaknesses, there is probably an agreement.
Of course, if the court does decide that Boris' writings
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were an offer and the handshake was an acceptance, then
consideration is an easy one. The bilateral nature of this
agreement ($7.5 million in exchange for an under developed ranch)
would be exactly the kind of reciprocal inducement that would be
expected of a bargained for exchange. Alternatively, detriment
could be found in Boris outlaying $7.5 million and in Big Sandy
handing over his ranch, with both benefiting the other.
Therefore, with both tests clearly satisfied, consideration would
be present for an agreement. Furthermore, even if the ranch were
actually worth $10 million, the possible inadequacy of the
contract would not be of concern to the court.
A problem would arise if the court attempted to settle the
agreement to agree provision "balance to follow as we agree."
While unsettled price terms are workable under the UCC, the
common law strongly requires a mechanism to settle an
undetermined terms. Even a court willing to make reasonable
inferences as to how to implement a vague mechanism could not
enforce this nondescript provision. As there is no evidence of
this being established during their dinner, Boris and Big Sandy
probably left a major hole in their agreement. This does not
fatally injure the contract because the price term itself "$7.5
million" is clear, however there would be complication in
enforcing timely payment.
Promissory Estoppel?
As a fallback, Boris might attempt to use a Promissory
Estoppel claim. As long as the court decided that the sale of the
ranch was an enforceable promise (Baird required this to be an
accepted offer), Boris could claim that he relied upon and that
his reliance was entirely foreseeable. However, he would have to
describe his reliance as detrimental. If he had actually
liquidated these other real estate assets, this might be
considered detrimental, except that he has the cash value of that
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property - there is little detriment there, especially since they
seemed inoperative (plus this type of preparatory gathering of
capital isn't normally accepted by courts - see Berryman). This
is very different from Boris beginning to improve the ranch
itself where he could not otherwise recover his investments.
Here, nothing has been paid as of yet. Therefore, he has no
functional detriment upon which to make a R 90 claim.
Furthermore, without such a compromising position, there is
little injustice to be cured. Perhaps this would be a different
scenario if Boris had already moved to complete his end of the
bargain.
Statutes of Frauds?
There is a major problem here with the statutes of frauds
(SoF). As an sale of land (and interests in land), this quslifies
for SoF requirements at common law - writing signed by the party
to be charged that indicates a contract or an offer with all
terms to be enforced.
Firstly and most fatally, Sandy signed nothing. Therefore,
Boris has no qualifying writing to impose on the Big Sandy's
estate. The only writing is a price term, which does seem to
indicate that there is at least an offer and the memo would
qualify since parole evidence (from Dusty) would indicate some
assent to the writing. However, this only includes the price term
and therefore the court could not require the exchange of
anything specific for that money. Therefore, Boris probably could
not press any claim without further memos and if he did the most
that would occur is that there would be a promise of one-sided
payment of millions of dollars. Luckily for Boris, that would
fail for lack of consideration sufficed by the writings.
As Boris could not substantiate R 90, he certainly could
not substantiate the higher threshold of R 139 in order to except
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this from the SoF on a promissory estoppel ground. Furthermore,
the R 129 exception for reliance on promises regarding land does
not apply because none of Boris acts thus far apparently relied
on the continuous consent of the land owner, and there is no
evidence that a third party would reasonably conclude that there
was a contract between these parties based on Boris' acts or
forbearances.
Conclusion
Ultimately, the SoF effectively bars Boris from seeking to
enforce his agreement. Plus, the agreement itself might run into
serious problems of specificity. Therefore, Boris has no
enforceable claim to the Ranch.
Little Sandy and the Ranch
Contract?
Taking Little Sandy (Little) at her word, there was an
agreement between her and her father that she would receive the
ranch at some point in the future. The "this will be yours"
assurances could be interpreted as offers and the "demonstration
of willingness" could be understand as an acceptance by conduct,
presuming the demonstration was actually affirmative and clear.
Perhaps also it could be interpreted that this offer was expected
to be accepted by silence and then Sandy's apparent nonvocalizations were done with the intent to assent and therefore,
this agreement could slip in through the Ninja Rule on R 69.
However, Little would probably not be able to prove
consideration. This seems to be framed exactly as a gift and Big
Sandy didn't even seem to wrap it up in the garb of a contract.
This was just a vague promise to a family member. Such
intrafamilial gifts are received skeptically on the best of days
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by courts and this case doesn't even seem to have anything
exchanged for the promise of the ranch in the future. Little
might attempt to argue that her returns were detrimental to her
and done in exchange for her father's promise. However, it
doesn't seem that she acted in anyway particularly beneficial or
forebore from any legal rights. At best, she could argue that she
forebeared from going to Cancun as was her legal right.
Nevertheless, she would find it very difficult to connect these
objectively to the agreement to transfer to Ranch to her.
Therefore, there is no actionable contract.
Prommissory Estoppel?
She might have better chances under a prommissory estoppel
theory. Under R 90, she would be able to display a promise (that
she would get the ranch upon her father's retirement) and
reliance (that she has apparently amassed serious capital to be
able to run the ranch properly). The court might consider her
action unreasonable since she shouldn't have believed that she
could enforce this kind of promise; but, she is unlikely to
qualify for this type of heightened professional expectation
found in Berryman (where the plaintiff was a real estate agent
who should have known that the option was unenforceable). Also,
the foreseeability of this reliance would probably be clear since
her father understood the expectations of running a ranch and
probably expected her daughter to take the promise seriously and
prepare herself for the responsibility.
Furthermore, this kind of conditions-upon-a-gift behavior
might not qualify as detrimental reliance because she has not
actually lost anything in the process of preparing to take over
the ranch. Additionally, injustice would be difficult to display
since she, like Boris, has not actually sunk anything into this
piece of land. Unlike Harvey, this daughter has not actually
built a home to which she has no other legal claim. In this case,
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the daughter seems flush with liquid assets and short one ranch,
but not in the kind of compromised legal and financial position
that normally accompanies promissory estoppel. Therefore, this
claim will likely also fail.
Statute of Frauds?
Finally, if Little were able to make either a contractual
or promissory estoppel claim, she would run into the thick wall
of the SoF. According to the text, she has absolutely nothing in
writing. This is still an interest in land and unlike even Boris,
who writings were insufficient for the common law, Little as
nothing to even begin with. It is possible that some kind of
correspondence between the father and daughter might be able to
substantiate the existence and terms of this promise and be
signed by her father (whose estate she would have to charge with
this suit). But, there is no such writing in the facts. Like
Boris, her promissory estoppel claims would not give her an
exception to the SoF under either 129 or 139 (following the above
analysis). Therefore, Little Sandy also has no actionable claim
to the ranch.
Lefty and the Bison
Contract?
If we assume Lefty is not lying, then there is apparently
an agreement between Big Sandy and himself. The "they's your when
I pass" is certainly a clear promise (assuming the court can make
the connection between "they's" and "them buffalo," which
shouln't be a problem) and apparently Left did assent, according
to the text.
However, there is a problem with consideration. Altruism is
not consideration. Past consideration is no consideration at all
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and moral consideration does not suffice for a contract.
Therefore, Sandy respecting Lefty's fondness of the bison is not
consideration; Sandy attempted to compensate Lefty for his
"bitter nights protecting the Bison" is not sufficient because
the performance preceded the promise; and Sandy trying to "do the
right thing" would be thrown out in court.
The only other route is the envision "keep 'em off the hay"
as the basis for a bargained for exchange. This is probably more
than conditions on a gift, because it is not a necessary thing in
order to be able to receive the bison, but an actually distinct
promise. A court could envision the bison being exchanged for
protection of the hay crop. It might be difficult to imagine how
this would reciprocally induce the promises, but Sandy does seem
to be satisfied with his arrangement. Since courts don't examine
very deeply whether promisors are actually benefited, this might
very well qualify (in Hamer the court just took the uncle at his
word that his nephews forbearances would benefit him.)
The alternative benefit/detriment test might be harder to
pass because it is not clear that the forebearance (purported
detriment) is actually refraining from a legal right. Sandy only
promises Lefty the bison, not the land (or the crops thereon).
Therefore, perhaps he would not be legally entitled to use the
hay at all. In that case, the detriment would be as unacceptable
for consideration as refraining from the use of heroin.
Nevertheless, the bargained-for-exchange analysis can survive on
its own. Lefty does actually seem to have a claim to the Bison.
Promissory Estoppel?
Without any apparent detrimental relinance, Promissory
Estoppel seems inapplicable.
Promissory Restitution?
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If the contract claim stood, Lefty might try to make a
promissory restitution claim that the bison were promises in
exchange for his requested or unrequested protection of property.
If requested, then the court would apply R 89. If unrequested
they might apply the R of Restitution 21 that apply proportionate
compensation for the emergency, effective, and justifiable
protection of property. However, chiefly this claim would be
undermined by the fact that Lefty's employment as "foreman"
likely compensated him already for these services. Nothing about
running a ranch effectively seems to exclude the management of
its livestock and crops. Therefore, even if the contract was
inadequate, the court would not consider the protection of hay
crops unjust enrichment. Therefore, there could be no
restitutionary claims.
Statute of Frauds?
Finally, it is unclear whether bison will qualify as an
interest in land. If they did, Lefty would have no paperwork to
prove his contract. But, if they did not, they might qualify as a
contract for goods. This would be an interesting application
since the contract does not value them at $500 of dollar, rather
it exchanges them for a promise. Perhaps the court would
interpret the bison as still worth $500 or more, but courts often
turn to the parties own definition for market-based numbers like
this. Therefore, Lefty might escape the the statuate of frauds,
but this is no guarantee. He would have no qualifying memos
(apparently) under 2-201 and couldn't use any of the exception in
2-201(2) or (3) because there was no confirmation memo, partial
performance, admission in court, or specially manufactured goods
at hand. Therefore, it is unclear whether Lefty actually has an
actionable promissory estoppel claim although otherwise he could
succeed at least in obtaining the bison.
Conclusion
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In sum, all three might be barred by the SoF. Perhaps Lefty
can get around this, in which case he is the only one with an
otherwise sufficient claim (under a contract theory), but his
success is not guaranteed due to the attentuation of
consideration.
---------------------------------------------------DO-NOT-EDIT-THIS-DIVIDER---------------------------------------------------Answer-to-Question-_2_
Applicable Law
Firstly, we establish that this is a contract for goods.
There are no services or land interests present in the facts.
However, it is unclear where Stampede and NIC have their places
of business. Therefore, I will apply both the UCC and the CISG.
Statute of Frauds
If the CISG applies (either company has its place of
business in a foreign signatory state), then there is no statute
of frauds (. If the UCC applies (these are both domestic
companies), then the fact that there are specially manufacturer
goods - "customized stamper[s]" - exempts this agreement from the
UCC SoF in sec. 2-201, which required memos for goods valued at
more than $500. This assumes that this customization makes it
difficult for the seller to just find another buyer. Although its
not explicit in this case, custom orders normally suffice this
requirement. Therefore, we can move forward without respect to
sufficient writings.
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Agreement and Terms
It is unlikely that an agreement was formed over the phone.
NIC solicited "interest" from Stampede and then Stampede decided
to "get right on it." This seems to indicate that Stampede would
prepare an offer. Of course, there are implications that general
terms were discussed in that phone call, but there is no evidence
of any intention to be bound. Therefore, I will assume that this
was simply preliminary negotiations as both parties apparently
expected further formality and conclusions to be done before
beginning performance.
When Stampede placed its "Agreement for Sale" this could be
interpreted as two things - either a price quotation or an offer.
Normally, the order is the offer, but this does seem to have all
certain terms and an intention to be bound by them (no
reservations apparent in the text). Nothing in this document
seemed to limit this to their terms.
Assuming this "Agreement" was an offer (under Izadi and
Quake certainty and intention to be bound can elevate things that
normally aren't offers to offers), the "Order" by NIC would
either be an acceptance with additional terms of a
(counter)offer. If CISG 19 applies, any material alterations
would make this a counteroffer (Filanto) and under the UCC
expressly conditional acceptances are counteroffers. Although
there is no indication that this was expressly conditional as per
2-207(1), the changes to the delivery schedule (from 9/30 to 8/1)
would be considered material. Therefore, this could be a
counteroffer under the CISG. Stampede's "I mean it this time"
would probably reject this counteroffer and substitute their own
(their original again).
Alternatively, it would be an acceptance with proposed
additions under the UCC. Since the delivery terms was different,
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most courts would simply exclude it, some courts would include it
as if it were additional, and some would knock it out and fill it
in with a default provison. Assuming this is an inclusive
jurisdiction, the terms (delivery and indemnity) would be
included unless the offor had precluded them (which they did
not), they are material alternations (they don't seem to be
unreasonable so they probably aren't), or they are objected to
within a reasonable time. See 2-207(2). Stampede resending their
"Agreement" with "I mean it this time" would probably suffice as
a reject/objection to NIC's additional terms. Therefore, these
terms would not be incorporated under the UCC either.
However, then NIC sent another "Order" again reasserting
its terms. If this is covered by the CISG, then this would have
rejected the counteroffer (the second "Agreement") and put up its
own new offer. In this international battle of the forms,
Stampede probably Princessed itself by accepting this offer by
performance and binding itself to the delivery terms as well as
the indemnification clause. Although the CISG does not allow
acceptance by silence, it does allow acceptance by conduct.
Stampede would have operated under the last form standing - NIC's
(just as how Princess operated under GE's form and found itself
at a loss for the terms it had to answer to).
But, if this is covered by the UCC, then these additional
have already been objected to(the different terms would either be
excluded/knocked out or thrown out with the rest of the
additional terms). There is no requirement that the objecting
party continually object because once they have objected once
under 2-201(2)(c) they have essentially precluded those terms
from re-entering without manifest assent (not by silence or
conduct) much like 2-201(2)(a).
To take a step back, the original "Agreement" could also be
interpreted as a price quotation since although it described the
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parties, the quanity, and the price, and demonstrated
consideration, perhaps it did not display an intent to be bound.
This would be strange in context of this document seemingly
finalizing preliminary negotiations, but it would keep with the
UCC norm of "orders" being offers. Therefore, when the "Order"
comes in from NIC, it is actually the first offer on the table.
Stampede then responds with its "Agreement" due to the different
delivery terms (and liability terms), this would be a
counteroffer under the CISG. It would also be a counteroffer
under the UCC because "this time I mean it" would be considered
an indication of express conditionality. Therefore, in either
jurisdiction the "Agreement" rejects the "Order" and becomes the
operant offer. Then, when the NIC resubmits its "Order," under
the CISG is it again a counteroffer (material alteration of
delivery terms) and becomes the standing offer, and under the UCC
is a purported acceptance with additional terms. Because these
are not clearly unreasonable or not surprising under "surpise
[and] hardship test" for material alterations under 2-207(2)(b),
nor were they objected to after the second "Order" submission;
but, they were precluded by the "this time I mean it" language of
the "Agreement" which seems to indicate both express
conditionality and the limitation of agreement to its own terms
that satisfies 2-207(2)(a). Although this alternative line of
thinking in which the first "Agreement" is not an offer, is less
likely to be entertained by the court, the same result comes out.
Conclusion
Ultimately, there is some form of contract. But, the terms
are unclear. Under the CISG the NIC "Order" stands at the end of
the day as the operant document underwhich Stampede performed. In
contrast, under the UCC the terms of the NIC "Order" were never
included into the contract. Therefore, the answer to NIC's
summary judgment hinges on where these parties are located.
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If the UCC applies, then the indemnity counterclaim fails
(the provision did not enter into force) and there was no breach
(the Stampede delivery date is in effect). If the CISG applies,
then the NIC contract stands as the last counteroffer at the end
of a battle of the form and the counterclaim succeeds and the
contract was breached.
Forgive me if this answer was disorganized. It was hard to
keep track of the different lines of thought.
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Answer-to-Question-_1_
a) Boris' claim with regard to buying the Ranch.
First, it's best to answer the question of what law applies
in this transaction. This is a contract for the sale of land and
other real estate, so the common law will almost certainly apply.
It's true that the sale involves some goods (defined in UCC 2-105
as things that are moveable): these moveable goods include the
bison that come with the ranch purchase, and also the hay, as 2105 (1) specifically indicates that the crops growing on a land
are goods. The mineral deposits, if they are to be "severed from
the land" will also count as goods under the UCC definition. In
sum, there are some goods on the property, some of which may turn
out to be valuable--especially the mineral deposits. In Jannusch,
the court established that it had to first determine whether the
sale of goods or services predominates in order to determine
whether the UCC or the common law applies. Here, land most likely
predominates, as 7,000 acres, plus any other real estate on the
land (including the stables, houses, etc), probably outweighs the
value of the goods. However, if time permits, I will briefly
discuss arguendo what would happen if this were a UCC contract.
Here, the first communication between Boris and Big Sandy is
Big Sandy's statement that he is asking for a price of $7.5
million. This is the first offer: it's addressed to a specific
person (Boris), and Big Sandy's words seem to indicate that all
that's necessary to complete a deal is Boris' assent. This
satisfies the definition of an offer in Restatement 24. However,
Boris' response will be considered a counter-offer; under the
common law mirror image rule, any purported acceptance with terms
that don't match those of the original offer is actually a
counter offer. In Normile v. Miller, the seller's response to the
buyer's offer was considered a counter-offer, because it had
things like a different deposit amount and interest rate. Thus,
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changing things like payment methods is enough under the common
law to constitute a counter-offer; since offers must match
acceptances exactly under the mirror image rule, any change would
be a counter offer. Boris writes out the terms of the counteroffer, which becomes an offer and signs it--manifesting his
assent. Big Sandy shakes hands with Boris. Shaking hands is a
manifestation of assent that under objective standards of
contract formation, would likely indicate assent to the other
party. Thus, we have an agreement under the common law.
However, Boris will have some problems with arguing that this
agreement should be enforced as a contract. First of all, under
the Restatement Section 110, in common law, land transactions are
subject to, or rather, fall within the Statute of Frauds. To
constitute valid contracts, they must be signed in a memorandum
that indicates that there has been a contract, and they must be
signed by the party to be charged with enforcing the contract-i.e. Big Sandy, since Boris will be bringing any claims against
Sandy's estate. Big Sandy did not sign the contract, because his
assent was oral. Thus, this agreement failed to satisfy the
statute of frauds.
Boris still may be able to argue that he had a contract with
Sandy based on some common law exceptions to the statute of
frauds. There's no other writing that we no of, so he could not
piece together a memorandum like the plaintiff in Crabtree.
However, if Boris has made any "part performance"--that is, taken
any actions in reliance on the land sale contract--he may be able
to argue a claim under restatement section 129, the section for
exception based on part performacne of land contracts. We don't
have enough information about Boris's conduct to know if he did
enough in reasonable reliance to change his position to his
detriment so much that injustice could only be avoided by
enforceemnt, as section 129 requires. Big Sandy did have reason
to believe Boris would rely, because Boris mentioned that he
would have to bo back overseas to liquidate some assets to buy
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the ranch, which would definitely put Boris in a worse position
than he was before--if he did this, we'd have an acception.
Additionally, if Boris had paid for any part of the land in any
of the installments, he would have an even stronger claim for
part performance that might make this a statute of frauds
exception. If Boris took any action or made any investments in
the land, which Big Sandy would reasonably expect, Boris, like
the plaintiff in Beaver v. Brumlow, could have his contract
enforced despite the lack of a writing. But if we trust Little
Sandy's statement that Boris hasn't paid anything, probably Boris
hasn't done enough to rely under 129.
Similarly, there's a general promissory estoppel exception of
the restatement in section 139, for if a plaintiff can
demonstrate detrimental reliance on a promise. Here, this would
require a similar inquiry to section 129 about whether reliance
was detrimental--however, because we are looking at an alleged
contract instead of a promise to sell, 139 is not the most
appropriate method of analysis. 129 is more fitting and what
Boris should try to argue.
Another requirement of a contract is that there be
consideration, defined in restatement 71 as a bargain for
exchange in which consideration is something that's sought for
and given in exchange for a promise. In most commerical contexts
like this one it is easy to find the requisite consideration:
here, Big Sandy promised to sell the farm, in exchange Boris made
a promise to pay, believing it would be binding--that's enough
for consideration.
Finally, this contract seems to contain most of the essential
terms--a court would consider the boundaries of the land, the
exact deed, knowledge of what comes with the land, and a price to
be most of the terms needed to constitute an agreement, so
probably any contract would be sufficiently certain, and the
biggest problem would be the statute of frauds--though Boris may
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be able to get around that if he could show enough "part
performance." However, there is one open term that should be
discussed: Boris and Big Sandy do not agree on a timeline for
payment, a number of installments, an amount for each
installment, etc: the contract simply says "balance to follow as
we agree." Since this contract doesn't provide a mechanism for
determining what this balance would be, a court may find that,
like the court in Walker v. Keith found, this was an agreement to
agree, and a court could decline to fill in the gap and enforce
the agreement. However, there's more of a mechanism here than in
Walker. In walker, the parties provided for rent-fixing based on
comparative market conditions but did not say they had a method
for measuring compatative market conditions, so the price of rent
could differ drastically. Here, we know what the ultimate price
would be if this contract would be enforced, and the question
would simply be how quickly Big Sandy's estate would get the
money--something that would probably be easier for a court to
impose a solution on, especially since the rest of the contract
terms were so certain. Indeed, we even know that Boris agreed to
pay "not less than 1.5 million in three months." That's a bit
vague--does it mean every three months? Probably it means in the
first three months. However, this will give a court more of an
idea of what to do than the phrase "comparative market
conditions" gave the court in Walker; here, the court will have
an idea of what an initial payment would be, the sort of interval
that was expected between payments, etc. This could be used as a
mechanism for fixing an arrangement about when Boris would pay
Big Sandy (or now, sadly, Big Sandy's estate).
In conclusion: unless Boris relied in the form of part
performance under 129 (unlikely, if we trust Little Sandy's
statement that Boris hasn't paid anything--although he may have
liquidated assets but not paid yet), this will probably not be
enforceable because of the statute of frauds. However, all the
other requirements: assent, consideration, certainty of terms, of
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a contract would likely be met. (Also: under 110 contracts made
on behalf of executors/administrators of an estate fall within
the requirement--I do not think it's likely that the contract at
issue here could be construed in this way, becuase it was for
land with Big Sandy when he was alive, but in the event that the
estate made any contract after his death it would have to be in
writing).
If this were a UCC transaction: it would fall under the
statute of frauds because it would be for the sale of goods over
$500. See UCC 2-305. These would probably both be merchants under
2-104, because they're both used to transactions of this kind
(Boris is an entreprenuer who's probably entered into similar
contracts in buying assets; Big Sandy is clearly a merchant in
that he owns a farm and does business off of it). There's no
merchant's confirmation, no delivery and acceptance of goods that
we know of, the goods aren't specially made, nothing is signed
and in writing by Big Sandy, so this would not be enforceable
because of the UCC Statute of Frauds. The issue of whether the
balance was an agreement to agree would be less problematic in a
UCC inquiry, because under the UCC, the only term that really
must be fixed is quantity.
b) Little Sandy's claim to Sandy Ranch
Little Sandy could make two arguments about her claim to
Sandy Ranch. She could try to say that she and Big Sandy had an
agreement that was supported by consideration. She could also try
to argue for recovery on a promissory estoppel theory. Both
theories will be difficult. All of these will be under common law
because they are dealing primarily with real estate.
Little Sandy would want to try consideration first, becuase
that would probably give her more damages under contract law;
promissory estoppel tends to give lower damages.
The Restatement and common law suggest that an agreement can
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be made even if you aren't sure of the exact time when it
happens, as long as there are objective externally obvious
indicators of mutual assent. Little Sandy would say that the
verbal agreement she had with Big Sandy, in which he made her the
deal that the ranch would be hers one day as long as she showed
her commitment and that she had the money to keep up the ranch,
formed an enforceable contract. Since this is something that
seems like it could be a gratuitous promise, we want to look
carefully for whether there is any consideration. WE can compare
two cases: Hamer v. Sidway, in which the court found
consideration, and Dougherty v. Salt, in which the court found no
consideration. Both involved things that looked like gifts of
money from relatives.
Hamer found consideration because the nephew gave up
drinking, smoking, and playing billiards for money--all things
that he seems to have had a right to do legally--in return for
his uncles promise to give him $5,000. The court found that this
satisfied the traditional benefit/detriment test, but we could
say today also that this was a bargain for exchange--a promise to
give money in return for a promise to give up immoral acts. Here,
Little Sandy did actually make some promises to Big Sandy by
showing her willingness to live on the ranch--mostly in the form
of her returning for vacations. She could try to argue that this
was enough to constitute consideration--however, manifesting
willingness to live on the ranch is a vague promise. Big Sandy
may not even have meant returning every summer--he could have
meant simply saying she'd love to have the ranch--and thus Little
Sandy's actions may not be considered sufficiently sought for by
Big Sandy. These summers may be enough consideration, but they
may not be. In Kirksey v. Kirksey, a court applying a
consideration analysis said that a widow moving permanently to
live on her husband's brother's land wasn't even enough to count
as consideration--giving up summers is certainly less than that.
The same with the money she's earned--it's unclear that her being
a plastic surgeon and making tons of money was really something
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sought for by Big Sandy. Little Sandy did do more, though, than
Charley in Dougherty, who wasn't required to show any
consideration by Aunt Tilley's now infamous note.
It's probably easier to characterize the summers and the
making money as conditions on gratuitous promises. Big Sandy
wants to give Little Sandy the ranch; having her express her
willingness to live there and making sure she has the money to
maintain it are conditions, sort of like employeee's ahving to
come to the office in Plowman to pick up their checks. Here, Big
Sandy is not promising the ranch to Little Sandy because he wants
her to want it and to keep it up--he's just imposing those things
as a condition. That is not enough for consideration, as Plowman
shows. Thus, there's probably no contract.
As a final note: the statute of frauds would be an issue if
this couldn't be fully performed within a year--but there's a
possibility that Big Sandy could've decided to retire while
Little Sandy was a child soon after the promise was made and
given her the ranch, so this wouldn't fall within the statute.
Little Sandy could next try a promissory estoppel theory,
though this will be difficult for similar reasons. Under
Restatement 90, a promise can be enforced under promissory
estoppel theory if theres a promise, which the promisor should
reasonably expect to induce action or forbearance, which does in
fact induce action or forbearance (and in common law cases, the
reliance must be found to be to the promissee's detriment for
such claims to succeed) and if injustice can only be avoided by
enforcing the promise.
There's evidence of a promise: Big Sandy's repeated
statements to give the ranch to little Sandy. Big Sandy would
probably reasonably expect Little Sandy to take some actions with
one day owning the ranch in mind, as she's grown up knowing about
this prospect. However, whether there is reliance in fact is
questionable. Unless Little Sandy can prove that she has become a
plastic surgeon in order to take over the ranch, or that she gave
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up lots of assets and potential earnings during her summer
vacations, it'll be hard to show that she's really done anything
that caused her detriment. She hasn't changed positions for the
worse like the plaintiff in Katz, or given up a lease like the
plaintiff in Pop's Cones, or lost any major assets like the
plaintiff in Aceves. Even if she had relied in some way to her
detriment, she's wealthy, not in a bad position, and has not
demonstrably lost any assets because of the ranch. Thus, she
almost certainly will not meat the "as necessary to avoid
injustice" part of section 90--Sandy will be totally fine if this
promise is not enforced.
c) Lefty's claim to the bison
Lefty, like Little Sandy, could argue on consideration and
promissory estoppel theory. And his claims will be similarly
difficult to make.
Big Sandy told Lefty very soon before the accident that Lefty
could have the bison when Big Sandy died. When Big Sandy made
this promise, he was thinking about all of Lefty's past acts in
taking care of the bison and keeping them off the hay. However,
as Plowman establishes, past consideration is no consideration at
all. We can only evaluate whether Lefty demonstrated
consideration for this promise of Big Sandy's based on what Lefty
did after the promise. Perhaps the fact that Lefty took care of
the bison and kept them off the hay until Sandy's death would
cound as consideration--you could characterize the promise to
give the bison away as somehting for which taking care of the
bison was sought in a bargain for exchange. However, this, like
the promise to Sandy, seems to be much more like a condition on a
gratuitous promise. Big SAndy is making the promise out of
gratefulness, not because he wants the bison off the hay. A court
would likely find this the case and find there was no
consideration. However, restatement section 81 does say that the
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motive behind a promise doesn't have to be the same inducing
cause as the consideration--if this really is a bargain for
exchange deal, there could still be consideration despite the
fact that there is some gratuity involved. There does seem to be
a deal--Lefty assented, they shook hands, etc. But based on the
past cases cited, this seems more similar to those finding no
consideration.
QUESTION 2
AS to the question of which law applies: We don't actually know
where either party is from, though the fact that NIC is a
multinational conglomerate suggests that this may be an
international corporation. Because this is for the sale of goods,
the UCC would apply if both parties were American. If they were
not, as they are both merchants and this is a commercial
contract, the CISG will apply. I will evaluate the claims under
the UCC first.
Is there an agreement? (UCC analysis)
Under the UCC, Stampede and NIC almost certainly have an
agreement. The first potential time for when the agreement was
formed was the phone call-under UCC 2-204, parties can have an
agreement even if the moment of its formation is undetermined, as
long as the essential terms are agreed upon. PStampede knows
NIC's budget and teh type of machine it wants, but they still
have to produce a machine, determine a price, etc, so many
essential terms are missing. However, the UCC does indicate that
quantity is really the most essential term in an agreement--if
it's clear that NIC wants one machine, the other terms could be
filled in as long as the other terms are agreed upon. If this
were the case (that the phone agreement was the moment of making
a contract), this case would be similar to Harlow & Jones v.
Advance. In that case, the court found that an agreement was made
over the phone, because the parties had determined critical terms
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like price and quantity, so the court found that the subsequent
haggling over additional terms wasn't relevant. If this case were
like Harlow & Jones, all of the terms NIC tried to throw in later
wouldn't matter. However, because the phone call doesn't indicate
a specific price and arguably doesn't indicate a specific
quantity, it's much more likely that the agreement came later.
Stampede formulated what would be considered the offer--the
"agreement for sale", as typically the buyer is the offeror and
this was the first agreement finalized with a price and certain
terms. This was the agreement that was uploaded to the website on
May 1.
NIC made the acceptance shortly after via email, with its
"Order" attached. Under UCC 2-207, even if an acceptance contains
different or additional terms (and this one does--it changes the
delivery date to August 1, which was originally Sept 30 in
stampede's offer, and it provides for an indemnity clause), it
can still be accepted under 2-207(1), as long as the acceptance
is not expressly made conditional upon assent to the new terms.
Because we don't know of anything that made this acceptance
expressly conditional, I will assume that this constitutes an
acceptance under 2-207(1).
Thus, the parties have a legally enforceable agreement.
Is there a breach? Do the delivery and indemnity terms go into
the contract? UCC
Becuase the parties are both merchants, 2-207(2) describes
what will happen to the additional and different terms. This
section says that between merchants, these terms will go into the
contract--unless b) the terms materially alter the contract, a)
the offer expressly limits acceptance to teh terms of the offer
or c) the offeror objects preemptively or within a reasonable
time after getting notice of the new terms.
First, subsection a does not apply,because there is nothing
in Stampede's "Agreement for Sale" that we know of that expressly
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limits acceptance. If there were such limitation, of course, the
new terms would not come into the contract. Neither the delivery
nor indemnification clause will be excluded because the offer did
not expressly limit acceptance.
The delivery clause is a different term--a term that is in
conflict with the earlier delivery date in stampede's form. Thus,
there are several ways that courts could use to approach the
delivery clause under subsection b. A few courts categorically
treat these terms as included if they would be included as merely
new terms--but a minority of courts do this. (The delivery clause
probably wouldn't be included anyway--it constitutes a
significant chance in delivery, thus satisfying the list of
material alterations in comment 4, and it would probably also
satisfy the surprise or hardship test, which I will discuss
later). Many courts categorically exclude different terms and
thus would exclude the new delivery date. Finally, some courts
apply a "knockout" approach, in which they take out the
inconsistent terms (both delivery dates) and fill them in with
gap fillers, reasonable solutions provided by other sections of
the UCC.
Under all three approaches to subsection b, the delivery
clause would not make it into the contract.
The indemnification clause, however, may not be a material
alteration, and thus may make it into the contract under
subsection b. HOwever, there's a strong argument that this clause
causes surprise or hardship, and thus will not become part of the
contract. Comment 5 to 2-207
says somewhat cryptically that a
clause "otherwise limiting remedy in a reasonable manner" is not
a material alteration, but that seems to be designed for
indemnifying makers of defective goods rather than buyers who
aren't paying because they aren't satisfied--the claim NIC is
trying to make here. Since there's nothing in the comments that
explicily relates to this type of situation, the claim would ahve
to be evaluated based on the "surprise or hardship test" to see
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whether it was a material alteration. Gottlieb v. Alps discusses
the surprise or hardship test--in that case, a clause
indemnifying the manufacturer was deemed not to be a material
alteration. The clause wouldn't have surprised the buyer because
several previous dealings contained such clasues, and Gottlieb
had no reason to expect that hardship would result to Alps. The
facts here are a bit different, as there are no previous
dealings; however, the most important holding from Gottlieb is
that surprise and hardship are both to be evaluated objectively-whether the party including the term would expect surprise or
hardship to result from inclusion of the term. NIC and Stampede
have had no prior dealings, so the term would likely cause
surprise if it were not a customary part of the trade. Finally,
not being paid for its work would certainly be a hardship that
could be expected to occur to Stampede. Thus, it's likely that
the indemnification clause would not make it into the contract
either. In cases like Harlow & Jones v. Advance, we've seen that
manufacturers are typically given some leeway with respect to
delivery dates expected to be later in commercial trades--thus
based on what little I know about trade customs, it seems like
this would be enough of a material alteration that would cause
surprise and hardship because it would be unexpected by Stampede
and would result in financial harm to them.
Also, subsection c says that an offeror can object and keep
the new terms out. When Hedd reprints her agreement, writes "This
time I mean it!" at the top, and rescans it to send it to NIC,
this could count as an objection that would keep the new and
different terms out of the offer, indicating that Hedd wanted to
go back to her original offer.
However, becuase the same thing transpires again--NIC resends
the same document, and Hedd simply gives up and goes ahead with
the manufacturing, she
does not object on Stampede's behalf the
second time around. So essentially at the end, there is no
objection.
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The only hope Stampede would have is if the indemnification
clause is treated as a material alteration and thus excluded, and
if the delivery clause fails to make it into the contract (it
probably will under all three approaches).
As a final note, the UCC has a statute of frauds provision in
2-305, requiring contracts to be in writing and signed by the
party against whom they are to be enforced, if teh sale of goods
is for over $500. This is over $500. It is in writing, and
Stampede signs it, so NIC could use this against them--Stampede
will have no statute of Frauds defense. NIC sends their form in
an email attachment--a form of written communication. Whether NIC
physically signed anything is unclear; however, the UCC allows
for anything intended to authenticate to constitute a signature.
Therefore, an email signature, or anything intended to show the
email was from NIC, like the electronic form of a letterhead,
would suffice to satisfy the UCC Statute of frauds.
In conclusion: treating this as a UCC transaction, there is
an agreement that is enforceable. However, it is likely that this
agreement will not contain the delivery and indemnification
terms. Thus, Stampede did not breach the agreement by delivering
the goods too late, because the agreement will consist of
Stampede's original delivery date of Sept 30 (or possibly a
reasonable gap filler based in the UCC and supplied by the court
if the court used the knockout rule, and this is purely
speculative but it seems like manufacturers usually get a
considerable amount of time to deliver). Since the
indemnification clause will also not likely make it into the
contract, NIC will probably not have a valid counterclaim for
indemnity. Stampede's suit against NIC for failure to pay, then,
will likely succeed.
Finally, there's one point that I didn't mention earlier,
which may affect this transaction: Hedd uploaded Stampede's forms
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on NIC's website. Thus, there is a chance that NIC has some terms
on the website affecting contracts submitted through its site,
attempting to impose its own terms, etc. Since we don't know of
Hedd clicking any button to say she agrees to the terms, this
probably isn't a clickwrap agreement. If anything, it could be a
browsewrap situation, where websites attempt to impose terms on
their users simply for using the site. HOwever, under Hines v.
Overstock, anything included in browsewrap agreements can only be
enforced if it is obvious to a reasonable user that there are
terms they need to review, if a user gets a meaningful
opportunity to review those terms before using the site, realizes
using the site means using those terms, and uses it anyway.
Because Hedd "dutifully visits" the site, I am assuming she is a
reaonsble user, and that if such terms had been there, she would
have read them. Probably, NIC couldn't impose any terms by virtue
of her use of the website--though they may be able to if there's
an obvious terms and conditions section that we don't know about
but that Hedd had notice of.
CISG
If Stampede and NIC are from different countries, both of
which are parties to the CISG, then the CISG will apply to this
transaction, and things will turn out differently.
The analysis of whether the phone transaction is the
agreement will be very similar as the analysis under the UCC. The
CISG also allows agreements to be formed by phone, but would
require that such agreements state most of the essential terms,
have the intent to form a contract, etc. I will argue, therefore,
as if the phone conversation is not the agreement, for reasons
stated above.
Under the CISG, then, the Agreement for Sale from Stampede,
the first certain document uploaded, would be the offer.
Under article 19 of the CISG, sections 1 and 2, a reply to an
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offer cannot be an acceptance if it contains terms that
materially alter the contract. However, if the terms do not
materially alter the contract, there will be an acceptance. If
they do materially alter, it would be a counter offer.
CISG 19(3) defines material alteration. 19(3) explicitly says
that time of delivery is a material alteration. So, not only
would the new delivery date be excluded; but also, NIC's entire
purported acceptance would thus be a counter-offer. This counteroffer and rejection would happen both times that NIC emailed its
document.
So, then, if there is no acceptance by NIC, what would
happen?
Article 8 of the CISG allows for acceptance of a party by
conduct. Since Stampede starts making the stamper and sends it to
NIC, this is activity that arguably constitutes assent. Thus,
Stampede by acting as if it had an agreement with NIC, actually
accepted NIC's counter-offer, and the terms of NIC's email
control.
Therefore, under the CISG, Stampede breached by failing to
deliver by August 1, and NIC has a valid claim for delivery.