BUL 3320 Exam 2 Review Questions
with Correct Answers
Scott, manufacturer of a carbonated beverage, entered into a contract with Otis,
owner of a baseball park, whereby Otis rented to Scott a large signboard on top of
the center field wall. The contract provided that Otis should letter the sign as Scott
desired and would change the lettering from time to time within forty-eight hours after
receipt of written request from Scott. As directed by Scott, the signboard originally
stated in large letters that Scott would pay $100 to any ballplayer hitting a home run
over the sign.
In the first game of the season, Hume, the best hitter in the league, hit one home run
over the sign. Scott immediately served written notice on Otis instructing Otis to
replace the offer on the signboard with an offer to pay $50 to every pitcher who
pitched a no-hit game in the park. A week after receipt of Scott's letter, Otis had not
changed the wording on the sign; and on that day, Perry, a pitche - ANSWER-If
Hume was aware of the offer before hitting the home run, he is entitled to $100.
If Todd was aware of the offer before hitting the home run and was not aware the
offer was supposed to be revoked, Todd is entitled to $100.
If Todd is entitled to $100, then Scott can recover $100 from Otis.
Perry is not entitled to $50 even if he is aware that the offer was supposed to be
made as the offer had not been made in the manner intended by Scott.
Ralph, knowing that his son, Ed, desires to purchase a tract of land,promises to give
him the $25,000 he needs for the purchase. Ed, relying on this promise, buys an
option on the tract of land. Can Ralph rescind his promise? - ANSWER-t probably
depends on how much Ed paid for the option. Under the doctrine of promissory
estoppel, the promise will be enforced if injustice can be avoided only by the
enforcement of the promise. If Ed paid $25 or $50, the promise will probably not be
enforced and Ralph can rescind his promise.
George owed Keith $800 on a personal loan. Neither the amount of the debt nor
George's liability to pay the $800 was disputed. Keith had also rendered services as
a carpenter to George without any agreement as to the price to be paid. When the
work was completed, an honest and reasonable difference of opinion developed
between George and Keith with respect to the value of Keith's services. Upon
receiving Keith's bill for the carpentry services for $600, George mailed in a properly
stamped and addressed envelope his check for $800 to Keith. In an accompanying
letter, George stated that the enclosed check was in full settlement of both
claims.Keith endorsed and cashed the check. Thereafter, Keith unsuccessfully
sought to collect from George an alleged unpaid balance of $600. May Keith recover
the $600from George? - ANSWER-Keith may recover some amount from George.
Cashing the check did not constitute consideration for the $600 bill as George
already owed an undisputed amount of$800 to Keith, so George did not pay any
amount toward the $600 and thus there was no consideration.
Discuss and explain whether there is valid consideration for each of the following
promises:
, A) A and B entered into a contract for the purchase and sale of goods. A
subsequently promised to pay a higher price for the goods when B refused to deliver
at the contract price. - ANSWER-Maybe--if the failure to pay was for a good faith
reason under the Uniform Commercial Code
Discuss and explain whether there is valid consideration for each of the following
promises:
B) A promised in writing to pay a debt, which was due from B to C, on C's agreement
to extend the time of payment for one year. - ANSWER-Yes--extending time is a
legal detriment
Discuss and explain whether there is valid consideration for each of the following
promises:
C) A orally promised to pay $150 to her son, B, solely in consideration of past
services rendered to A by B, for which there had been no agreement or request to
pay. - ANSWER-No--past consideration
On March 20, Andy Small became seventeen years old, but he appeared to be at
least eighteen (the age of majority). On April 1, he moved into a rooming house in
Chicago and orally agreed to pay the landlady $300 a month for room and board,
payable at the end of each month. - ANSWER-If room and board are a necessary,
Small owes his landlady a reasonable amount.
On April 4, he went to Honest Hal's Carfeteria and signed a contract to buy a used
car on credit with a small down payment. He made no representation as to his age,
but Honest Hal represented the car to be in top condition, which it subsequently
turned out not to be. - ANSWER-The term "top condition" is puffing, not
misrepresentation or fraud. If the car is a necessary, Small owes a reasonable
amount for the car. If the car is not a necessary, Small owes nothing for the car.
On April 7, Andy sold and conveyed to Adam Smith a parcel of real estate that he
owned. On April 30, Andy refused to pay his landlady for his room and board for the
month of April; he returned the car to Honest Hal and demanded a refund of his
down payment; and he demanded that Adam Smith re-convey the land, although the
purchase price, which Andy received in cash, had been spent in riotous living. -
ANSWER-Can not dis-affirm a contract for the sale or purchase of real property until
after attaining the age of majority.
Johnson and Wilson were the principal shareholders in XYZ Corporation,located in
the city of Jonesville, Wisconsin. This corporation was engaged in the business of
manufacturing paper novelties, which were sold over a wide area in the Midwest.
The corporation was also in the business of binding books. Johnson
purchased Wilson's shares in XYZ Corporation and, in consideration thereof, Wilson
agreed that for a period of two years he would not
(a) manufacture or sell in Wisconsin any paper novelties of any kind that would
compete with those sold by XYZ Corporation or
(b) engage in the bookbinding business in the city of Jonesville
with Correct Answers
Scott, manufacturer of a carbonated beverage, entered into a contract with Otis,
owner of a baseball park, whereby Otis rented to Scott a large signboard on top of
the center field wall. The contract provided that Otis should letter the sign as Scott
desired and would change the lettering from time to time within forty-eight hours after
receipt of written request from Scott. As directed by Scott, the signboard originally
stated in large letters that Scott would pay $100 to any ballplayer hitting a home run
over the sign.
In the first game of the season, Hume, the best hitter in the league, hit one home run
over the sign. Scott immediately served written notice on Otis instructing Otis to
replace the offer on the signboard with an offer to pay $50 to every pitcher who
pitched a no-hit game in the park. A week after receipt of Scott's letter, Otis had not
changed the wording on the sign; and on that day, Perry, a pitche - ANSWER-If
Hume was aware of the offer before hitting the home run, he is entitled to $100.
If Todd was aware of the offer before hitting the home run and was not aware the
offer was supposed to be revoked, Todd is entitled to $100.
If Todd is entitled to $100, then Scott can recover $100 from Otis.
Perry is not entitled to $50 even if he is aware that the offer was supposed to be
made as the offer had not been made in the manner intended by Scott.
Ralph, knowing that his son, Ed, desires to purchase a tract of land,promises to give
him the $25,000 he needs for the purchase. Ed, relying on this promise, buys an
option on the tract of land. Can Ralph rescind his promise? - ANSWER-t probably
depends on how much Ed paid for the option. Under the doctrine of promissory
estoppel, the promise will be enforced if injustice can be avoided only by the
enforcement of the promise. If Ed paid $25 or $50, the promise will probably not be
enforced and Ralph can rescind his promise.
George owed Keith $800 on a personal loan. Neither the amount of the debt nor
George's liability to pay the $800 was disputed. Keith had also rendered services as
a carpenter to George without any agreement as to the price to be paid. When the
work was completed, an honest and reasonable difference of opinion developed
between George and Keith with respect to the value of Keith's services. Upon
receiving Keith's bill for the carpentry services for $600, George mailed in a properly
stamped and addressed envelope his check for $800 to Keith. In an accompanying
letter, George stated that the enclosed check was in full settlement of both
claims.Keith endorsed and cashed the check. Thereafter, Keith unsuccessfully
sought to collect from George an alleged unpaid balance of $600. May Keith recover
the $600from George? - ANSWER-Keith may recover some amount from George.
Cashing the check did not constitute consideration for the $600 bill as George
already owed an undisputed amount of$800 to Keith, so George did not pay any
amount toward the $600 and thus there was no consideration.
Discuss and explain whether there is valid consideration for each of the following
promises:
, A) A and B entered into a contract for the purchase and sale of goods. A
subsequently promised to pay a higher price for the goods when B refused to deliver
at the contract price. - ANSWER-Maybe--if the failure to pay was for a good faith
reason under the Uniform Commercial Code
Discuss and explain whether there is valid consideration for each of the following
promises:
B) A promised in writing to pay a debt, which was due from B to C, on C's agreement
to extend the time of payment for one year. - ANSWER-Yes--extending time is a
legal detriment
Discuss and explain whether there is valid consideration for each of the following
promises:
C) A orally promised to pay $150 to her son, B, solely in consideration of past
services rendered to A by B, for which there had been no agreement or request to
pay. - ANSWER-No--past consideration
On March 20, Andy Small became seventeen years old, but he appeared to be at
least eighteen (the age of majority). On April 1, he moved into a rooming house in
Chicago and orally agreed to pay the landlady $300 a month for room and board,
payable at the end of each month. - ANSWER-If room and board are a necessary,
Small owes his landlady a reasonable amount.
On April 4, he went to Honest Hal's Carfeteria and signed a contract to buy a used
car on credit with a small down payment. He made no representation as to his age,
but Honest Hal represented the car to be in top condition, which it subsequently
turned out not to be. - ANSWER-The term "top condition" is puffing, not
misrepresentation or fraud. If the car is a necessary, Small owes a reasonable
amount for the car. If the car is not a necessary, Small owes nothing for the car.
On April 7, Andy sold and conveyed to Adam Smith a parcel of real estate that he
owned. On April 30, Andy refused to pay his landlady for his room and board for the
month of April; he returned the car to Honest Hal and demanded a refund of his
down payment; and he demanded that Adam Smith re-convey the land, although the
purchase price, which Andy received in cash, had been spent in riotous living. -
ANSWER-Can not dis-affirm a contract for the sale or purchase of real property until
after attaining the age of majority.
Johnson and Wilson were the principal shareholders in XYZ Corporation,located in
the city of Jonesville, Wisconsin. This corporation was engaged in the business of
manufacturing paper novelties, which were sold over a wide area in the Midwest.
The corporation was also in the business of binding books. Johnson
purchased Wilson's shares in XYZ Corporation and, in consideration thereof, Wilson
agreed that for a period of two years he would not
(a) manufacture or sell in Wisconsin any paper novelties of any kind that would
compete with those sold by XYZ Corporation or
(b) engage in the bookbinding business in the city of Jonesville
