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Exam 14: Written Contracts

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Question 1

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Robin and Bellman,both merchants,orally agree to a contract for the sale of $5000 of accessories.Bellman,the buyer,sends to Robin,the seller,a written confirmation of the sale,which is sufficient against Bellman under the statute of frauds and which Bellman signs.Robin does not sign.Robin fails to perform the contract and does not ship out the goods.Bellman sues.This contract is:

A) unenforceable,because Robin did not sign any contract.
B) unenforceable,because Bellman did not pay for the goods.
C) enforceable,because Bellman sent the written confirmation of the sale,thereby partially performing the contract.
D) enforceable even without Robin's signature because both parties are merchants.

E) A) and B)
F) None of the above

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Question 2

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Alfred orally promised to pay Robert a salary of $30,000 per year for five years and his moving expenses up to $10,000 if Robert would quit his job and come to work for him at his manufacturing plant.Robert agreed to do so,but requested a written contract.Alfred assured him that the company attorney would prepare such a contract as soon as possible,but Alfred needed Robert to start at once.Accordingly,Robert sold his house,moved his family,and commenced to work for Alfred.He was fired without cause two months later.No written contract was ever executed.Can Robert enforce Alfred's oral promise?

A) No.This was a contract for longer than one year.Without a writing it violates the statute of frauds and is not enforceable.
B) Maybe.Robert should go to court under the theory of promissory estoppel.Alfred made an oral promise that Robert relied upon,and the way to avoid injustice is to enforce the promise.
C) Yes.This is a personal satisfaction contract,and Alfred gave no reason for dissatisfaction.Robert can recoup the loss he took on the sale of his house.
D) Yes.This is a partial performance of the sale of goods.Robert can recoup the loss he took on the sale of his house.

E) A) and B)
F) All of the above

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Question 3

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Any contract involving a sale of goods of $100 or more must be in writing.

Martin,Human Resources Director for Spring Co. ,sent Lynn the following signed letter:"This letter confirms our offer to you.We will pay for your moving expenses,up to $1,500.Your starting date will be February 1,and you will become eligible for health care benefits as of May 1.You will receive a starting salary of $36,500 annually,with reviews and eligibility for increases at six months,12 months,and annually thereafter.Vacation will be for two weeks a year after one year." Spring fired Lynn eight months after she started to work,and Lynn sued arguing the letter constituted a memorandum of an oral contract for employment for five years.Is the letter sufficient to satisfy the statute of frauds?

Hannah orally agrees to sell her house to Brett for $175,000.If she delivers the deed to Brett with the expectation of payment in two weeks and he fails to pay,most courts will not enforce the contract since it was not in writing.

Whittle sent an order over the Internet for a $1,200 garage door.His name keyed onto the order will only be effective as a signature sufficient to create a "writing" "signed by the party against whom enforcement is sought" if he follows up with a signature on paper.

The original statute of frauds is the English law that began the practice of requiring written evidence of certain kinds of contracts,but now the British government has repealed the writing requirement for most contracts.

Claude agrees to lease his house to Irvin for nine months,the lease to begin six months from the signing of the contract.Under the statute of frauds:

When a contract falls within the statute of frauds but is not reduced to a writing,the contract is:

Under the UCC,which of the following contracts may be enforceable,even without a written memorandum?

Vicki entered into a written contract to buy a car from Valley Motors.During the negotiations,the sales representative said that the car had a two-year full warranty.The written contract included a provision that stated,"This writing is the full and final expression of the parties' agreement;anything said before signing or while signing is irrelevant." The written contract did not include a warranty.Two months after Vicki took delivery of the car,she discovered that the transmission needed to be replaced.Vicki claimed that it was covered by the full warranty.Will Vicki be able to present evidence as to the sales representative's statements concerning the warranty?

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land.Since neither of them had any paper with them,Derek wrote the following on a napkin:"Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street,St.Joseph,Minnesota,U.S.A.for the price of $4,500 per acre.Transfer of title,payment,and possession to take place on May 1,2011." Abyan signed the napkin.On May 1,2011,Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price.If Derek sues Abyan for the price of the land,the most likely result will be:

Explain the reason behind having a statute of frauds and give arguments for and against having such a statute.

Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports.Brahma delivered 20 of the skis on May 1.On June 1,Summer Sports notified Brahma that it will not honor the agreement.Which statement is correct?

Ethel's Exercise World plans to order three weight machines from Pete's Push,Pedal and Pull,Inc.for a total of $15,000.Pete's demands that Ethel's friend,Moneybags,a wealthy independent businesswoman (not connected with Ethel's business in any way) promise to pay Pete's for the three machines if Ethel's Exercise World does not.Which of the promises in this problem must be in writing to be enforceable?

Either party may demand rescission of a fully executed oral contract if it was required to have been in writing under the statute of frauds.

Thomas Reep,was the president of First National Bank in Clarksville.R.L.Moore approached Reep requesting the bank to open an account in the name of Texas Continental Express,Inc. ,a corporation owned by his two sons.R.L.had no affiliation with the corporation nor any financial interest in it.R.L.promised Reep that he would open several accounts in First National that would more than amount to the business of his sons.R.L.assured Reep that if anything came up in connection with the sons' account,Reep was to contract him directly.Upon these conditions,First National proceeded to furnish a regular checking account and bank draft services for Texas Continental.Sometime later,First National paid two drafts overdrawing the account by $448,942.When Reep contacted R.L.about the overdrawn account,R.L.assured Reep that money would be deposited in the account.When Reep called back a few days later to find out why the money had not been deposited,R.L.informed Reep that his wife had suffered a nervous breakdown the night before and the deal was off.First National Bank brought suit to enforce R.L.'s promise to pay the debts of Texas Continental.What is the likely outcome?

Abby dies,and her good friend,Clay is appointed to administer Abby's estate.Abby's house was in poor condition,so Clay orally hired a contractor to make repairs.Clay also orally promised that if the estate could not pay the repair bill,he would pay it even though he does not live in the house and has no entitlement under Abby's estate.The estate does not pay the repair bill.Who can the contractor collect from,if anyone?

Bry,Inc.and Gangl Co.entered into an oral agreement for the sale of 3,000 sweaters.Both parties performed as required under the contract.Bry delivered the sweaters and Gangl accepted and paid for them.Since the contract is fully executed,it makes no difference that it was oral.

Tony signed a contract agreeing to purchase a used,high-powered boat for $10,000.Prior to signing the contract,the sales representative explained that the boat motor was guaranteed for six months for all labor and parts.The written contract contained nothing about the warranty;however,it did have an integration clause in it.Tony had problems with the boat motor,causing expensive repairs.Tony returned the boat to the sales representative for the repairs,only to learn the salesman denied knowing anything about a six-month warranty.If Tony sues,discuss the likely outcome.