Contracts
A maker of handwoven rugs contracted with a supplier to provide yarn made from sheep's wool. The written contract specified that, for four years, the supplier would provide the rugmaker with 2,000 spools of yarn made from 100% sheep's wool per month, at $10 per spool, for a total of $20,000. Two years into the contract, the supplier sent the rugmaker 2,000 spools of yarn made from 90% sheep's wool and 10% synthetic fiber. The rugmaker sent the supplier a check for $15,000 for the shipment, and added a clear note on the check stating that the payment was in full for the shipment but was $5,000 less due to the synthetic fiber in the yarn. The supplier promptly deposited the check, and then four months later filed suit against the rugmaker for the remaining $5,000. The supplier has submitted evidence of the written contract, and the rugmaker has submitted evidence of the deposited check.
What is the rugmaker's best defense in this situation?
Answers:
Correct Answer: C. The supplier deposited the check for $5,000 less than the contract price, thereby discharging the rugmaker of any further duty to pay the remaining amount for that month's shipment.
A contractual obligation is discharged by accord and satisfaction if a party tendered a negotiable instrument with a conspicuous statement that it was tendered as "payment in full" and the other party obtained payment of the instrument.
A man charged with aggravated assault of a hiker in a national park has alleged that he shot at the hiker in self-defense. The man testified that when the hiker crossed the man's campsite at dusk, the man thought that the hiker intended to rob him. On rebuttal, the prosecution wishes to call a bartender to testify that the year before, the man had fired at another patron of the bar after a disagreement and claimed that he had done so in self-defense.
Is the bartender's testimony admissible?
Answers:
B. No, because the testimony presents improper character evidence.
Evidence of a criminal defendant's prior crimes or bad acts is inadmissible if it is offered to show the defendant's propensity to commit the charged crime. But it may be admissible for noncharacter purposes (i.e., MIMIC).
Here, the circumstances of the man's prior act are too unrelated to the current charge to show a pattern of operation or common scheme. While both involved claims of self-defense, they arose in different contexts—a threatened robbery and a barroom dispute
Three siblings, two brothers and a sister, inherited land as equal tenants in common from their mother. The property was subject to a mortgage that contained an acceleration clause, which provided that the entire outstanding balance of the mortgage loan was due upon default. None of the siblings made the mortgage payments as they became due, and the mortgage fell into default.
The mortgagee foreclosed on the mortgage. At the foreclosure sale, the sister purchased the land, paying 45% of the land's fair market value.
Can either of her two brothers reclaim his interest in the land?
Answers:
C. Yes, if he pays his sister one-third of the amount she paid to acquire the land.
Cotenants owe each other a fiduciary duty when they (1) jointly purchase property in reliance on each other or (2) acquire their interests at the same time from a common source. This duty arises when the property is sold at a foreclosure sale and purchased by a cotenant, allowing the other cotenants to reacquire their interests by paying their share of the purchase price.
The owner of an older home sold the property to a buyer. The owner and the buyer conducted a reasonable inspection of the home prior to the sale and did not identify any dangerous conditions. A few days after the sale, the kitchen caught on fire while the buyer made dinner. The buyer was able to escape before the entire house burned down, but she suffered burns and damage to her lungs from smoke inhalation.
Afterward, it was determined that an electrical fire had been caused by an unreasonably dangerous amount of faulty wiring behind the kitchen walls. The owner apologized to the buyer upon finding out about the fire and truthfully told her that because the home had been unoccupied for many years, he had been unaware of the faulty wiring. Despite the owner's apology, the buyer has sued him for negligence to recover damages for her physical harm.
Is the buyer likely to prevail in her action against the owner?
Answers:
B. No, because the owner was not aware of the faulty wiring.
A land seller must disclose unreasonably dangerous conditions if (1) the condition exists at the time of the sale, (2) the seller knows or has reason to know of the condition and its risk, (3) the buyer does not know or have reason to know of the condition or risk, and (4) the seller has reason to believe that the buyer would not discover or realize it.
When do general venue rules apply versus special venue rules?
The general venue statute applies when a federal officer or employee is sued in his/her individual capacity. But special venue rules apply when a federal officer or employee is sued for acting in an official capacity or under color of legal authority.
A construction company contracted with a manufacturer to purchase 100 identical prefabricated windows to use while constructing houses in a gated community. The windows were to be delivered in shipments of 25 windows each on April 1, May 15, July 1, and August 15. The written contract, signed by both parties, was silent as to when payment for each shipment would be due. The manufacturer made the first two shipments in conformity with the contract requirements, and the construction company paid one-fourth of the full contract price upon each delivery. However, on June 1, the manufacturer demanded that the construction company pay the entire remainder of the contract price before the manufacturer made any further shipments.
Which of the following statements is true?
Answers:
B. The construction company must pay the manufacturer one-fourth of the contract price upon delivery of each conforming shipment of windows.
Under the UCC, an installment contract is defined as a contract in which the goods are to be delivered in multiple shipments, and each shipment is to be separately accepted by the buyer. Payment by the buyer is due upon each delivery unless the price cannot be apportioned.
The defendant's attorney in a fraud case called a witness to testify as to the defendant's character. On cross-examination, the prosecutor asked the witness whether he had ever been arrested for writing bad checks. In fact, the witness had been arrested two years ago for writing bad checks, but the charges had been dropped due to a lack of evidence that the witness had committed the crime. The defendant's attorney objects to the question.
Should the prosecutor be allowed to ask the question?
Answers:
B. No, because the witness was never convicted of the crime.
A party can attack any witness's character for truthfulness with reputation or opinion testimony OR with specific instances of conduct (SICs) that are probative of that character (Choice A). Only two types of SICs are admissible for this purpose: (1) convictions for a felony or crime of dishonesty and (2) other bad acts. However, a mere arrest does not qualify as a bad act that can be used to attack a witness's character for truthfulness. That is because an arrest for misconduct is not itself misconduct.
Here, the witness was arrested for writing bad checks—an act that is probative of a person's character for untruthfulness (Choice D). But the witness was never convicted due to a lack of evidence that he had committed the crime. And since the arrest alone cannot be introduced to attack the witness's character for truthfulness, the prosecutor should not be allowed to ask the question.
A widower devised his fee simple interest in his residence as follows: "to my daughter for life, then to my oldest grandchild who survives her." At the time of the widower's death, he was survived by his only two children, a son and a daughter, and by one grandchild, his daughter's son. A short time later, the daughter and her son entered into a contract to sell the residence in fee simple to a buyer.
The applicable jurisdiction continues to follow the common-law Rule Against Perpetuities but has abrogated the Rule in Shelley's Case.
At the closing, the buyer refused to purchase the residence.
Can the sellers compel the buyer to do so?
Answers:
A. No, because the sellers have breached the covenant of marketable title.
The implied warranty of marketable title promises that the seller will convey title reasonably free from doubt and unreasonable risk of litigation upon closing. Title is unmarketable if a future-interest holder has not agreed to the transfer.
A mother and father who recently divorced had one child. As part of their custody agreement, the judge awarded primary custody of the child to the mother and granted weekend visitations to the father. Soon after the divorce, the mother remarried another man, who treated the child like his own. The father became extremely angry when he learned about the mother's remarriage, so he decided to cause her emotional distress. The father appeared at the mother's house when he was supposed to return the child from a weekend visitation. When the mother and the stepfather answered the door, the father told them that the child had been in a car accident and was in a coma. In fact, the child was neither in an accident nor in a coma.
Both the mother and the stepfather suffered severe emotional distress as a result of the father's news. Each of them sued the father for intentional infliction of emotional distress. The father has moved to dismiss the stepfather's claim, arguing that his conduct was directed at the mother alone.
Should the judge grant the father's motion to dismiss?
Answers:
A. No, because the stepfather is a close relative of the mother.
A defendant whose extreme and outrageous conduct has harmed a third party may be liable for intentional infliction of emotional distress if (1) the plaintiff contemporaneously perceived that conduct, (2) the plaintiff was closely related to the third party, and (3) the defendant knew of the plaintiff's presence and that relationship.
An air-freight handler had a four-year contract with an airport in a neighboring state to handle all air freight for the airport. The contract represented 80 percent of the air-freight handler's total business. Two years into the contract, the airport accepted an offer from another company to handle the business at two-thirds of the price of the contract with the air-freight handler. The airport notified the air-freight handler in writing that it had executed a contract with the other company and would be cancelling its contract with the air-freight handler. The air-freight handler brought suit in federal district court under diversity jurisdiction seeking injunctive relief to enforce the contract.
Is the court likely to grant the air-freight handler's request for a preliminary injunction?
Answers:
A. No, because monetary damages are potentially available to the air-freight handler.
A federal court may grant a preliminary injunction when (1) the movant is likely to succeed on the merits, (2) the movant is likely to suffer irreparable harm in the absence of relief, (3) the balance of equities is in the movant's favor, and (4) the injunction is in the best interests of the public.
On August 1, a buyer and a seller contracted in writing for the sale of the seller's duck farm. The contract provided that the closing would occur on September 15. On September 1, the buyer sent the seller an email containing the following: "After discussing our August 1 contract with my financial advisors and some experts in the field, I am increasingly concerned that entering the duck market at this time is a grave mistake. As such, I do not intend to buy your duck farm unless I am legally obligated to do so."
If the seller sues the buyer for breach of contract on September 1, is the seller likely to succeed?
Answers:
A. No, because the buyer's statement is neither a present breach nor a repudiation of the August 1 contract.
A contracting party must generally wait until performance is due before suing the other party for breach of contract. But a party can sue immediately under the doctrine of anticipatory repudiation if, before performance is due, the other party clearly and unequivocally indicates by words or conduct that it cannot or will not perform.
A son and a daughter are opposing parties in federal court. At trial, the daughter presented evidence that her father has been missing for 10 years and that no one has heard from him in that time. The son testified that he received a phone call three years ago from a person whom he believes was his father.
In the jurisdiction, a rebuttable presumption that a person is dead arises when a party establishes that the person has been missing and not heard from for more than seven years.
Which of the following is correct?
Answers:
C. The jury may find that the father is dead.
Under the "bursting bubble" approach, a rebuttable presumption "bursts" when the opposing party in a civil case produces sufficient evidence to contradict the presumed fact. The fact finder must then weigh the evidence to decide the issue.
By statute, a jurisdiction provides: "Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered." In addition, the recording act of the jurisdiction reads, in its entirety, as follows: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law." This act has been interpreted as not providing any grace period for recording a conveyance or mortgage.
An owner conveyed land by a warranty deed to his adult child. The child recorded the deed a week later. Three days after the conveyance to the child and without knowledge of it, a creditor of the owner properly filed a judgment against the owner. The creditor then filed suit against the owner and his child to foreclose on the judgment lien against the land.
If the court rules against the creditor, which of the following is the most likely reason?
Answers:
B. The creditor is not a purchaser for value.
Here, the creditor created a lien against real property "then owned or subsequently acquired" by the owner when the creditor filed its judgment against the owner. At that time, the creditor lacked actual, constructive, and inquiry notice of the owner's conveyance to the child. Therefore, the creditor would be protected by the recording act if it is considered a purchaser for value.
Which of the following statements regarding warranties is TRUE?
A. Generally, the tort defenses that may be asserted in a strict products liability claim can be asserted in a breach of warranty claim.
B. An implied warranty is an affirmative guarantee of the product’s safety.
C. There is no tort for breach of an implied warranty of merchantability.
D. An implied warranty of merchantability arises when the seller knows the particular purpose for which the product is being sold and the buyer relies on the seller’s skill or judgment.
A. Generally, the tort defenses that may be asserted in a strict products liability claim can be asserted in a breach of warranty claim.
A jury found for the plaintiff in a defamation action in federal district court against a newspaper publisher. Following the verdict, the newspaper publisher moved for a new trial on the ground that the verdict was against the weight of the evidence. The court granted the motion. The plaintiff wants to immediately appeal the court's order granting the new trial.
Which of the following is most accurate concerning immediate appeal of the court's order?
Answers:
A. Immediate appeal is available if the appeal is filed with the circuit clerk within 14 days after the order is entered.
B. Immediate appeal is not available because the basis of the motion was that the verdict was against the weight of the evidence.
C. Immediate appeal is precluded by the final-judgment rule.
D. The plaintiff may appeal the order as of right.
C. Immediate appeal is precluded by the final-judgment rule.
Under the final-judgment rule, a federal appellate court generally has no jurisdiction to hear an appeal until the district court has issued a final judgment—i.e., a decision that fully resolves the dispute on the merits. However, the interlocutory appeals statute allows certain orders to be appealed before the entry of a final judgment.
A licensing agreement provided that a manufacturer could use an inventor's patent in manufacturing its products for 10 years. Immediately thereafter, the inventor assigned his rights to receive payments pursuant to the licensing agreement to a corporation. The inventor did not receive compensation for this assignment. The inventor, upon his death five years later, devised his stock in the corporation to his daughter and all of his remaining property to his son.
To whom should the manufacturer make its payments under the licensing agreement?
Answers:
C. The inventor's son.
A gratuitous assignment—i.e., an assignment that is not supported by consideration—is automatically revoked upon the death, incapacity, or bankruptcy of the assignor.
A defendant was charged with theft of merchandise from a store. On the witness stand, the defendant admitted to taking the merchandise on the day in question but contended that she lacked the intent to do so. A rebuttal witness testified that she was standing outside the store after purchasing something, and she saw the defendant outside the store furtively removing the merchandise from her coat. When asked about her recollection of the date, the witness testified that she knew that it was the day in question because that date was on her receipt. The defendant objected, asserting that the prosecution must produce the receipt.
How is the court likely to rule on this objection?
Answers:
A. Overrule the objection, because the date is a collateral issue.
Here, the witness relied on the date on the receipt when testifying about the date of the theft. But the date of the theft is collateral (i.e., undisputed) because the defendant has already admitted to taking the merchandise on the day in question. This means that the prosecution need not produce the receipt (or a reliable duplicate) for the witness to testify about it. Therefore, the court will likely overrule the objection
A woman who owned a vacant cottage contracted to sell it to a man. The contract was silent as to the risk of loss and contained no contingencies. The parties agreed that closing would occur the following month at which time the man would take possession of the cottage. The woman maintained casualty insurance on the cottage, but the man did not obtain such insurance. On the evening before the closing was to take place, a fire caused by lightning destroyed the cottage. The jurisdiction has not adopted the Uniform Vendor and Purchaser Risk Act.
May the man rescind the contract for the sale of the cottage?
Answers:
A. No, because of the doctrine of equitable conversion.
A majority of jurisdictions apply the doctrine of equitable conversion when a land-sale contract is silent regarding the risk of loss (as seen here). Under this doctrine, the risk of loss is placed on the party with equitable title at the time the property was destroyed unless the other party is at fault for the loss. The seller retains legal title to real property during the pendency of the sales contract (i.e., during the executory period), but the buyer receives equitable title once the contract is formed and can be specifically enforced.*
When, as here, no conditions/contingencies appear in the contract—e.g., a condition that the buyer secure financing before closing—the contract is specifically enforceable as soon as it is formed. And since the woman (seller) was not at fault for the fire, the man (buyer) had equitable title at the time the cottage was destroyed by the fire. For this reason, the man bears the risk of loss and cannot rescind (i.e., cancel) the contract for the sale of the cottage.
*Under the Uniform Vendor and Purchaser Risk Act (adopted by a minority of jurisdictions), the seller retains the risk of loss unless and until the buyer takes possession or title is transferred.
Which of the following statements regarding trespass to chattels is FALSE?
A. The requisite intent to be liable for trespass to chattels is the intent to do the interfering act.
B. Mistake by the defendant about the legality of his actions is not a defense.
C. In circumstances of use or intermeddling, the plaintiff may recover even if he cannot show actual damages.
D. In the case of dispossession, a plaintiff may recover actual damages caused by the interference and the loss of use.
C. In circumstances of use or intermeddling, the plaintiff may recover even if he cannot show actual damages.
What 3 options does a judge have when the jury’s answers are inconsistent with the verdict on a general verdict with special interrogatories?
Order a new, trial, direct the jury to further consider its answers and verdict or disregard the jury’s verdict and enter a judgement consistent with the answers provided.
An electrician and a landlord executed a contract under which the electrician agreed to upgrade the electricity in the landlord’s ten-unit apartment building at a cost of $10,000. The electrician began work as scheduled and completed two of the ten identical units before quarreling with the landlord. The electrician refused to complete the job. The landlord hired another electrician who completed the last eight units at $1,100 each in the same time frame as was contemplated in the landlord’s contract with the electrician. If the first electrician sues the landlord for restitution damages, how much will a court likely award?
Answers:
C. $1,200
Answer choice C is correct. Restitutionary damages restore to the plaintiff (here, the electrician) whatever benefit was conferred upon the defendant (here, the landlord) prior to the breach. If the plaintiff breached the contract, his damages are generally limited to the amount of wealth conferred upon the defendant, which would take into consideration any damages suffered by the defendant. In this case, the electrician conferred roughly $2,000 of benefit on the landlord (two-tenths of the value of the original contract, assuming the contract price reflected the value conferred), and the landlord incurred $800 in extra costs as a result of the electrician’s breach (an extra $100 per unit x eight units). Accordingly, the electrician is entitled to $1,200, or the amount of benefit the electrician conferred upon the landlord
A plaintiff brought a defamation action against his friend, an internet blogger, for the publication of defamatory accusations against the plaintiff that the friend allegedly published on his internet blog. The plaintiff testified that because he had always been a daily reader of the friend's writing, he read the defamatory remarks on June 10, the same day they were published. When the plaintiff's attorney asked the plaintiff how he remembered the date, the plaintiff answered, "When I called his house to demand that he take down the post, his girlfriend answered the phone and said that he was out seeing a movie that had come out that day." The friend's attorney objected and moved to strike the testimony.
Should the court strike the plaintiff's testimony about the girlfriend's statement on the phone?
Answers:
B. No, because the statement is not being offered for its truth.
Here, the plaintiff is offering the girlfriend's statement to show how he was able to recall the date on which the accusations were published—not to prove that the friend in fact went to the movies on that day. An out-of-court statement implicates the rule against hearsay only when it is offered to prove the truth of the matter asserted therein. Therefore, a statement offered for some other purpose is not barred by this rule.
A homeowner bought a home with the proceeds of a loan from a thrift institution. The loan was secured by a mortgage on the home. Under the terms of the loan, the full amount of the outstanding loan obligation was to become due and payable if the home was sold or otherwise transferred without the prior permission of the thrift institution. The thrift institution recorded its mortgage.
Subsequently, the homeowner established a living trust and transferred ownership of her home to the living trust. The homeowner recorded this ownership transfer. Upon learning of the transfer, the thrift institution demanded that the homeowner pay the outstanding amount due on the loan immediately. When the homeowner refused, the thrift institution brought a foreclosure action to collect the full amount of the outstanding loan obligation.
Is the thrift institution likely to succeed?
Answers:
A. No, because ownership of the home was transferred to the homeowner's living trust.
When a due-on-sale clause appears in a mortgage loan agreement, the mortgagee (the thrift institution) can demand payment in full of the remaining mortgage debt if the mortgagor (the homeowner) transfers the mortgaged property without the mortgagee's consent. If the mortgagor cannot pay, then the mortgagee can foreclose on the mortgaged property to satisfy the unpaid debt.
A journalist received information from a credible source that a large corporation had used child labor in foreign countries to produce electronics. The corporation had previously criticized its main competitor for using unethical labor practices in foreign countries. The journalist published an article in a nationally distributed newspaper repeating the charges against the corporation, which resulted in boycotts of the corporation’s products. The corporation sued the journalist for defamation and produced records showing that no child labor was ever used in the production of its products. The journalist’s source testified at trial that she knew the statements she made were false. The journalist testified that the article was based solely on the source’s statements, and that no other research was conducted into the veracity of her statements. He further testified that he believed the source, and never doubted the truthfulness of her information. The trier of fact found the testimony of the source and the journalist to be credible.
Is the corporation likely to prevail in its defamation suit against the journalist?
Answers:
D. No, because the journalist did not act with malice.
A plaintiff may bring an action for defamation if the defendant’s defamatory language is of or concerning the plaintiff, is published to a third party who understands its defamatory nature, and damages the plaintiff’s reputation. For matters of public concern, the plaintiff must prove fault on the part of the defendant as well as the falsity of the statement.
What four circumstances must a court clerk enter a default judgement?
(1) the plaintiff's claim is for a sum certain or a sum that can be made certain by calculation,
(2) the plaintiff's request for default judgment includes an affidavit establishing the amount due,
(3) the defendant failed to appear, and
(4) the defendant is not legally incompetent or a minor.