Question 1 Tish entered into a contract with Michelle, in which Michelle would redecorate Tish’s

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Question 1

  1. Tish entered into a contract with Michelle, in which Michelle would redecorate Tish's bedroom to incorporate more lighting and pastel colors.  The contract provided that Michelle would perform the duties in a “satisfactory and timely manner.”

    When the work was completed, Tish reviewed the colors and lighting, and determined that it was not satisfactory. Tish refused to pay Michelle the $5,000 due Michelle at the end of the contract, citing a breach.

    Will Michelle be able to legally require Tish to pay her for this job?


    Michelle will be able to require Tish to pay her for her services, because the services were performed.


    Michelle will be able to require Tish to pay her for her services if a reasonable person would consider the job satisfactorily performed. 


    Michelle will be able to require Tish to pay her for her services only if Tish considers the job satisfactorily performed.

      D. None of the above is true.

10 points   

Question 2

  1. Mary has a City Credit Card (CCC) and has run up a $13,000 debt.  She calls the company and explains that she can't pay the full amount, but will be willing to pay $10,000 if they will forgive the other $3,000.  The company agrees to accept $10,000 as payment in full.  This is an example of what type of discharge of the contract?

      A. Modification of contract supported by consideration.
      B. Novation of the contract.
      C. Novation and satisfaction.

    Accord and Satisfaction

10 points   

Question 3

  1. David owned a ranch that was improved with about four miles of white post-and-wood fencing.  David left the ranch for a month to tend to business back East, and while he was gone, Peter and Paul came by his home and left a flyer on his front door.  It said “Peter and Paul's Pretty Good Fence Repair Company is in the area, and will repair and paint all fencing to look like new.  We'll be working in the ranch lands, so if there are any areas of fencing that you don't want to be repaired and painted, please hang a white cloth on that section of fencing so we'll know you don't want our services.”  David came home a couple of weeks later and found his fencing repaired and painted, and a note on his front door explaining that the service had been provided, and the bill was enclosed. 

    David appreciates the repair work, but he is not sure if he is obligated to pay Peter and Paul.  Which of the following is most correct?


    David is not obligated to pay for the services provided.


    David is not obligated to pay for the services because of a contractual obligation, but he did receive services from the other party, and must pay a reasonable price for those services or return them.  Obviously, one cannot return fence repair and painting, so he must pay, even though there is no contract.


    David is obligated to pay, but only if he was negligent in not having someone watch his property during his absence.  That negligence will be determined by a 'reasonable person' standard.


    David is obligated to pay the contract because performance constituted agreement.

10 points   

Question 4

  1. In a contract governed by the Uniform Commercial Code, Rock Quarry agreed to provide Southland Road Constructors with all the rock that Southland needed for the next year, at a price that was 10% below the market price.  Southland agreed, and began receiving rock from Rock. 

    After six months, though, Southland discovered that it could buy rock from another provider at a rate that was 20% below the market price, and it stopped buying from Rock Quarry.  Rock then sued Southland for breach of contract.  Southland countered by pointing out that because there was no stated quantity in the contract, it is unenforceable. 

    Which party will prevail in this suit?


    Rock Quarry will win.


    Rock Quarry will win, unless it has already provided as much material as it expected to under the original contract.

      C. Southland will win IF it did not enter into a written contract with the second provider.
      D. Southland will win.

10 points   

Question 5

  1. Uncle John Callender appreciated the care that his niece Marie provided to him during his recovery from surgery – always baking pies and stuff.  As she was leaving after he was well, he tells her that when she turns 18, he will give her his beloved antique car.  When she turns 18, she asks him about the car and he said that he decided to keep it a few more years. 

    Can Marie Callender enforce her Uncle John's promise to provide her the car now that she's 18?

      A. No, because is a contract that could be revoked by the offeror at any time before he delivered the property to the promisee.
      B. Yes, because she did in fact provide valuable consideration to her uncle, making it an enforceable agreement.
      C. No, the statement of the uncle is to make a gift, not a contract, and anyone can revoke a promise of a gift any time up to the actual delivery of the gift.  She does not promise to do anything, so it is not a contract.
      D. No, because the consideration provided by Marie is insufficient value for a car.

10 points   

Question 6

  1. Marvin entered the auto dealership to buy a new car.  Very elderly, Marvin walked with difficulty and when he discussed cars with the salesperson, he asked questions about speed and gas mileage.  Marvin signed a contract to buy the car, and allowed the dealership to charge $500 as a non-refundable deposit and down payment on his credit card.  Marvin promised to return the next day with the remainder of the money, and slowly walked down the street toward home.

    The next day, Marvin returned, accompanied by his 50-year old son,  The son explained that Marvin was incapacitated by dementia and didn't fully understand the nature of the purchase or how much he was spending on the car.  The son asked for the $500 back, and the dealership refused to do that, citing that Marvin didn't appear to have diminished capacity.

    Marvin and his son sued the dealership in small claims court, to get the $500 back plus the the $260 in court fees.   Will Marvin and his son prevail?

      A. No, because the deposit was clearly identified as non-refundable.
      B. No, because the dealership cannot reasonably be expected to conduct mental capacity tests on every customer who comes in to buy a car.
      C. Yes, if there is evidence that establishes that Marvin does not have sufficient capacity, the $500 must be returned.
      D. Yes, because the dealership had reasonable notice that Marvin may not be fully capable of understanding the nature and significance of the act of contracting for a car.

10 points   

Question 7

  1. Mary is a hair dresser who cut and styled Megan's hair for an agreed price of $50.00.    Mary lives in a jurisdiction that requires that hair dressers must be licensed to cut hair, but she has not obtained that license because she only operates in her own neighborhood, working out of her home.  Megan discovered that Mary is not licensed, and even though she liked the cut, she refused to pay.  Mary sued Megan in small claims court for the $50 plus her legal expenses of suit.  Will Mary win?
      A. Yes because Megan was satisfied with the haircut.
      B. Yes, because Mary performed the services.
      C. No, because Mary is working out of her home, and does not operate a business.
      D. No, because Mary does not have a required business license.

10 points   

Question 8

  1. Robert agreed to buy Charlie's business for $500,000, including the building, fixtures, supplies and inventory.  As part of the agreement, Charlie agreed not to compete with Robert in the local community for a period of three years.  At the same time, Robert knew that a former manager at Charlie's place, Pat, had retired, but might want to re-enter the market as a competitor to Robert now that he's bought Charlie's place.  To prevent that re-entry by Pat, Robert agreed to pay Pat $50,000 to not compete with him for a period of three years.  Robert reasoned that three years would give him a chance to establish his own reputation in the community, and he could thereafter withstand any challenge by Charlie or Pat reentering the local market. 

    Are these actions taken by Robert enforceable contracts?

      A. The contracts with both Charlie and Pat are enforceable.
      B. The contract with Charlie is enforceable, but the contract with Pat is not.
      C. The contract with Charlie is unenforceable , but the contract with Pat is enforceable.
      D. The contracts with both Charlie and Pat are unenforceable.

10 points   

Question 9

  1. Andy says that he will continue to pay Bob to maintain Andy's boat so long as Andy owns the boat.  Bob hired Charlie's Fueling Services to provide fuel for Andy's boat with the understanding that when Bob's own fueling dock is constructed, Bob will stop using Charlie's service and fuel Andy's boat himself.  Charlie's Fueling Service then contracted with David's River Rats to provide fuel to that club, with the service to begin when Charlie no longer is obligated to support Bob's fueling of Andy's boat, because he can't do both at once.

    What type of contracts exist between: 

    Andy and Bob? 

    Bob and Charlie? 

    Charlie and David?

      A. Andy and Bob? Condition Concurrent.

    Bob and Charlie? Condition Subsequent

    Charlie and David? Condition Precedent

      B. Andy and Bob? Condition Precedent

    Bob and Charlie? Condition Concurrent.

    Charlie and David? Condition Subsequent

      C. Andy and Bob? Condition Subsequent

    Bob and Charlie? Condition Precedent

    Charlie and David? Condition Concurrent.

      D. Andy and Bob? Condition Subsequent

    Bob and Charlie? Condition Concurrent.

    Charlie and David? Condition Subsequent

10 points   

Question 10

Fox CPA Services agreed to do Donner Partnership's income tax return for the last year, for a price of $2,500. On April 14, Fox CPA realized that the Donner return was more complicated than Fox had assumed and that it would take about twice as long as expected to finish the return.  Fox called Donner, explaining the situation, and said that Fox would not be able to complete the tax return by April 15 unless Donner agreed to pay $5,000, not $2,500. 

Looking at the calendar, Donner realized that it basically had no alternative because another firm couldn't pick up the job this late and make the April 15 deadline, so Donner agreed to pay the $5,000 fee, which was double the original agreement.  After the income tax return was filed by Fox, Fox billed Donner for the $5,000 and Donner sent a check for $2,500. 

Will Fox prevail if it brings legal action against Donner for non-payment of the additional $2,500?


Fox will prevail because Donner agreed to the additional cost, and because there was a justifiable basis for the additional charges.


Fox will prevail because Donner agreed to the additional cost, without regard to the justifiability of the additional charges.

  C. Donner will prevail, but only if it can prove that Fox really didn't incur the “double work” that Fox claimed.
  D. Donner will prevail
    • Posted: 4 years ago
    • Due: 24/01/2016
    • Budget: $0

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