BUL 4310 FINAL EXAM QUESTIONS & ANSWERS
• If I enter into a contract with someone to buy 10 barrels of nails, at $5 a barrel, and
they don't delivery; they breach the contract. So I have to go out and buy those nails at
a higher price $7.50 a barrel, have I suffered any damages? How do I measure that? -
Answer -o Yes
o It's the difference between contract and market price
• What if he doesn't deliver the nails and because he doesn't deliver, not only do I have
the $2.50 difference, but I suffer consequential damages (I have to pay penalties b/c I
didn't get thing done in time and I lose customers). Can I get those consequential
damages? - Answer -o Yes, but I have to show (evidence) that the other party knew
beforehand that if he didn't deliver I was going to suffer those consequential damages
o Common law and UCC require that you tell him beforehand of these possible
consequential damages
o If not, all you'll get is the difference between market and contract price
• Lucy v. Zamer case (Zamer refused to honor contract to sell property to Lucy. Zamer
said he would sell it to her, drafted and redrafted a contract and his wife also signed.
Then Lucy filed lawsuit to compel Zamer to fulfill his obligations under the contract).
What happened and why? - Answer -o He said he was drunk, that he didn't mean it,
that he had no intention to sell the property—that he was only joking
o Court used the objective theory of contract
• It didn't buy those arguments b/c he wasn't impaired; he wrote contract and redrafted it
and his wife signed it
• He then said I was only joking—the Court said, what would a reasonable other person
think? Lucy obviously thought he wasn't joking
o This objective theory of contract is used in Common Law
• Gives rise to:
• Parole evidence rule - Answer -o If I enter into a contract and the other party doesn't
do what I think he should've done and I file a lawsuit of breach in contract and in court I
say breach in contract but the contract doesn't say what he says the breach is about
o The court will say that if it's not in the contract, "I don't care what you agreed upon
orally"
o Court won't allow parole evidence, aka verbal evidence; they want to see it written
down
• If I file a lawsuit against K-Mart. During a visit to k-mart, it stopped me as I was leaving
the store and they accused me of stealing a book, but then they looked into my
shopping bag and patted me down and saw I didn't and they let me know. I filed lawsuit
for False Imprisonment. Will I win? - Answer -o Probably not, b/c in most states, as long
as they have the reasonable belief that I did steal something and use reasonable force
, to stop me, and then they let me go once they found out I wasn't guilty and only had me
for a reasonable amount of time, then I won't win
• If I tell someone I'll sell him my green Chevy for $15,000 on Friday and they say "I'll
take it I'll pay on Friday and I want you to wash and wax it before you deliver," do they
accept my offer? - Answer -o No because they gave a counteroffer; it destroys the
previous offer because it becomes the new offer
o The Common Law requires the Mirror Image Rule
• It must be exactly the same
• Does the Mirror Image Rule exist under the UCC? - Answer -o No
o Battle of the Forms means we all have our form documents and if I send out a
document which will be in the form of a letter saying "I will buy x-amount of things you
make at this price," and on the back I put my terms and conditions and they send me
one back that says "we accept that you will buy these things," but on the other side they
have different terms and conditions. The last one that comes in is the one that stands
o Three possibilities that it doesn't control
• If when I get it I call them up or notify them in writing as quickly as I can, saying that I
don't accept them. I will only accept my terms and conditions
• If it is materially different than my terms and conditions
• If I say in my original document, "this is the deal; these are the terms and conditions
and I accept no other; if I get any other, they are invalid and there is no deal"
• If I sell automobiles, and I know that Valerie wants to buy one and we get a new
shipment in and I tell her that I will sell her one at a good price, have I made an offer? -
Answer -o I haven't given a price and I haven't even described the car
o I just made a vague statement; not an offer
• If Melissa and I are good friends and I tell her and give her a letter that I will give her
my dog on Friday and by Sunday I haven't given her the dog. Nor Monday nor Tuesday.
She sues me. Will she win? - Answer -o No, b/c it's a gift
o You can't enforce a promise to make a gift
• What is consideration in an offer? - Answer -o Something of value
o A promise has value, so it doesn't have to be money
o Most contracts are a promise for a promise
o So if I say I will give you this dog on Friday, I just made a promise and if you say "ok I
will buy the dog on Friday and I'll give you $50" you just made a promise as well
o If I say "I will give you my dog and I want $50 for it" it means I can't sell it now for $100
or anything else
• If you say you will buy it for $50, you have to buy my dog for $50
• What kind of law is the Uniform Commercial Code (UCC)? - Answer -o Statutory law
• If I go to a lawyer and I ask her, "what do you charge to form a corporation?" And she
tells me what her fees are and I go home. I figure out what I want (corporation with this
• If I enter into a contract with someone to buy 10 barrels of nails, at $5 a barrel, and
they don't delivery; they breach the contract. So I have to go out and buy those nails at
a higher price $7.50 a barrel, have I suffered any damages? How do I measure that? -
Answer -o Yes
o It's the difference between contract and market price
• What if he doesn't deliver the nails and because he doesn't deliver, not only do I have
the $2.50 difference, but I suffer consequential damages (I have to pay penalties b/c I
didn't get thing done in time and I lose customers). Can I get those consequential
damages? - Answer -o Yes, but I have to show (evidence) that the other party knew
beforehand that if he didn't deliver I was going to suffer those consequential damages
o Common law and UCC require that you tell him beforehand of these possible
consequential damages
o If not, all you'll get is the difference between market and contract price
• Lucy v. Zamer case (Zamer refused to honor contract to sell property to Lucy. Zamer
said he would sell it to her, drafted and redrafted a contract and his wife also signed.
Then Lucy filed lawsuit to compel Zamer to fulfill his obligations under the contract).
What happened and why? - Answer -o He said he was drunk, that he didn't mean it,
that he had no intention to sell the property—that he was only joking
o Court used the objective theory of contract
• It didn't buy those arguments b/c he wasn't impaired; he wrote contract and redrafted it
and his wife signed it
• He then said I was only joking—the Court said, what would a reasonable other person
think? Lucy obviously thought he wasn't joking
o This objective theory of contract is used in Common Law
• Gives rise to:
• Parole evidence rule - Answer -o If I enter into a contract and the other party doesn't
do what I think he should've done and I file a lawsuit of breach in contract and in court I
say breach in contract but the contract doesn't say what he says the breach is about
o The court will say that if it's not in the contract, "I don't care what you agreed upon
orally"
o Court won't allow parole evidence, aka verbal evidence; they want to see it written
down
• If I file a lawsuit against K-Mart. During a visit to k-mart, it stopped me as I was leaving
the store and they accused me of stealing a book, but then they looked into my
shopping bag and patted me down and saw I didn't and they let me know. I filed lawsuit
for False Imprisonment. Will I win? - Answer -o Probably not, b/c in most states, as long
as they have the reasonable belief that I did steal something and use reasonable force
, to stop me, and then they let me go once they found out I wasn't guilty and only had me
for a reasonable amount of time, then I won't win
• If I tell someone I'll sell him my green Chevy for $15,000 on Friday and they say "I'll
take it I'll pay on Friday and I want you to wash and wax it before you deliver," do they
accept my offer? - Answer -o No because they gave a counteroffer; it destroys the
previous offer because it becomes the new offer
o The Common Law requires the Mirror Image Rule
• It must be exactly the same
• Does the Mirror Image Rule exist under the UCC? - Answer -o No
o Battle of the Forms means we all have our form documents and if I send out a
document which will be in the form of a letter saying "I will buy x-amount of things you
make at this price," and on the back I put my terms and conditions and they send me
one back that says "we accept that you will buy these things," but on the other side they
have different terms and conditions. The last one that comes in is the one that stands
o Three possibilities that it doesn't control
• If when I get it I call them up or notify them in writing as quickly as I can, saying that I
don't accept them. I will only accept my terms and conditions
• If it is materially different than my terms and conditions
• If I say in my original document, "this is the deal; these are the terms and conditions
and I accept no other; if I get any other, they are invalid and there is no deal"
• If I sell automobiles, and I know that Valerie wants to buy one and we get a new
shipment in and I tell her that I will sell her one at a good price, have I made an offer? -
Answer -o I haven't given a price and I haven't even described the car
o I just made a vague statement; not an offer
• If Melissa and I are good friends and I tell her and give her a letter that I will give her
my dog on Friday and by Sunday I haven't given her the dog. Nor Monday nor Tuesday.
She sues me. Will she win? - Answer -o No, b/c it's a gift
o You can't enforce a promise to make a gift
• What is consideration in an offer? - Answer -o Something of value
o A promise has value, so it doesn't have to be money
o Most contracts are a promise for a promise
o So if I say I will give you this dog on Friday, I just made a promise and if you say "ok I
will buy the dog on Friday and I'll give you $50" you just made a promise as well
o If I say "I will give you my dog and I want $50 for it" it means I can't sell it now for $100
or anything else
• If you say you will buy it for $50, you have to buy my dog for $50
• What kind of law is the Uniform Commercial Code (UCC)? - Answer -o Statutory law
• If I go to a lawyer and I ask her, "what do you charge to form a corporation?" And she
tells me what her fees are and I go home. I figure out what I want (corporation with this
