ANSWERS TO REVIEW QUESTIONS

1. FALSE
An offer that looks toward the formation of a true unilateral contract can be accepted
only by the offeree's doing the requested performance. A promise to perform is
unavailing.

2. PROBABLY NOT
It is most doubtful that any court would interpret A’s statement as the communication
of an "offer." It lacks evidence of a present manifestation of a present willingness to
enter a contract. If A’s words have any significance beyond a mere general
declaratory statement, they would probably be held as merely evidencing willingness
to receive offers.

3. VERY DOUBTFUL
Under the common law tests, such an exchange would be simply too indefinite for a
court to regard it as the basis for a present contract. Under the U.C.C., in contracts for
the sale of goods, there has been some relaxation of this policy (e.g., the parties can
leave the determination of the price to be fixed by a third party, some certain event, or
a trade journal quotation; or they may leave it to future agreement), but none of the
exceptions by which the price term can be made sufficiently certain are incorporated
by the vague terms of this agreement.

4. NO
Again, a manifestation of agreement on the essential term (price) is missing, and the
agreement by its terms does not set up the machinery by which a court may arrive at
the determination selected by the parties. Given the unique subject matter, this would
not fall under the rule that the court can remedy the omission by supplying a
"reasonable price."

5. YES
Here, the essential quantity term is measured by the seller's output. Under the U.C.C.,
this is specifically authorized as a sufficient basis to create a present contract.

6. FALSE
The revocation is effective if it is given the same notoriety as attended the making of
the offer. If this requirement is satisfied, then revocation is effective through the
constructive notice, even as to individuals who do not actually learn of it.

7. FALSE
Under the common law view, such a revocation, is effective upon receipt by the
offeree.

8. a YES
 At common law, an offer not supported by consideration or detrimental reliance can
be revoked at the will of the offeror, even if he has promised to hold the offer open.

b. NOT NECESSARILY
Depends on whether the promise was in a signed writing. If it was, then under the
U.C.C., this would be a "merchant's firm offer" and as such, it is effective for the
stated period of 30 days without the necessity of showing any independent
consideration.

9. FALSE
Today nearly all courts hold that once the offeree has begun actual performance of the
requested act (as opposed to steps taken in preparation for performance), the offeror's
power of revocation is stayed for a reasonable period, thus giving the offeree further
time to complete the act of acceptance, at which point the contract is formed.

10. TRUE
In contrast to the rules regarding acceptance, a rejection is effective upon receipt by
the offeror.

11. YES
Death or destruction of the subject matter of an offer that is still executory terminates
the offer by operation of law.

12. TRUE
To this extent an offer is deemed "personal" to the intended offeree.

13. PROBABLY NOT

Because of the subject matter (personal services), the more liberal U.C.C. provisions
would not apply, and B's qualification of his purported acceptance will be regarded as
a rejection and counteroffer.

14. YES
The contract is for the sale of goods; hence, the U.C.C. rules apply. Under the U.C.C.,
an acceptance containing additional terms is sufficient to form a contract unless the
acceptance is expressly made conditional on assent to the additional terms. Therefore,
a contract was formed in this case in spite of the additional delivery term. Because the
contract is between merchants, whether the offeree's additional term has become a
term of the contract depends on the court's determination of whether it materially
altered the terms of the offer. If it did not materially alter the terms of the offer, it be-
comes part of the contract unless the offeror reasonably rejects it. If it did materially
alter the terms of the offer (e.g., by materially shifting the economic advantage or risk
of loss proposed by the offer), in the absence of the offeror's assent, it does not
become a term of the contract and only the offered terms will be included

15. TRUE
 Since a bilateral agreement is formed by the exchange of promises, notice of the
return promise is generally required. Any objective manifestation of assent is
sufficient for this purpose.

16. FALSE
Ordinarily, acceptance is effective on dispatch. Only if acceptance is attempted by an
"unauthorized" mode of communication is the effective date delayed until receipt by
the offeror.

a. YES
But under the U.C.C., the rules have been even further liberalized in favor of the
offeree-the offeree obtains the benefit of the "mailbox rule" (acceptance effective
upon dispatch) if any mode of communication commercially reasonable under the
circumstances is used

17. YES
This surprising result flows from a strict application of the common law rule-a
contract was formed upon dispatch of the acceptance. However, if the offeror relies to
his detriment on the rejection, the offeree will be estopped from enforcing the
contract.

18. TRUE
Absent a situation in which there is a recognized "duty to speak," the offeror cannot
impose upon the offeree the peril of having silence treated as a binding acceptance.

19. TRUE
Brown's case might not, however, survive Fox's defense that she made no offer
looking toward performance of a bargained-for act (coming to the apartment), but
merely stated a condition, the satisfaction of which would position Brown to receive a
gratuity. A gift is revocable absent a union of do native intention plus delivery, here
refused.

20. NO
The promise is supported only by past consideration which, at common law, cannot
bind a promisor who has changed his mind concerning the terms of an executory
obligation.

21. TRUE
It is supported only by "moral consideration" and, like "past consideration," is
incapable of binding a now unwilling promisor to an executory obligation.

22. (B)
Here is an example of "moral" consideration sufficient to support an executory
promise to pay a debt discharged in bankruptcy (but only as per the tenor of the new
promise).
23. TRUE
Here is an example of bargained-for valuable consideration. But for this proposal, the
mother was free to name the child anything she wished. In response to the offer, she
named the infant "John." This is a legal detriment. In such a case, the law will not
inquire into the economic equivalency of the promise and the act.

24. TRUE
The bank will raise the objection of failure of consideration since Brown was already
under an existing duty to repay the principal. However, the facts strongly imply an
obligation on Brown's part to pay the 8% interest for the second year, and this is
valuable consideration supporting the bank's extension promise.

25. NO
O's promise of the additional $100 was not supported by an exchange of valuable
consideration. All C promised or did was to complete the installation, but this was
already his existing duty under the original executory contract. This case cannot, on
the facts, qualify for the exception where performance is more onerous than
foreseeably anticipated.

26. YES
A bargained-for promise to forbear the prosecution of any claim that is not patently
groundless, and that the party in good faith believes to have merit, is another example
of "valuable consideration."

27. NO
Given the express reservation, A has given only an "illusion" of a promise.

28. YES
Here, the key is that unless and until A gives the notice, his promise binds him to
regard B as an exclusive source of supply for the goods in question.

29. YES
Although a minor's promise is voidable, it is held to impart valuable consideration in
a bargained-for exchange with an adult.

30. YES
Under the trend of modem decisions prompted by section 90 of the Second
Restatement, a gratuitous promise made for the benefit of an intended third party
beneficiary, which induces reasonable reliance on the part of the intended beneficiary,
may be enforced as against the promisor on a theory of promissory estoppel.

31. FALSE
No recovery on the contract because of a mutual mistake concerning a basic
assumption of the contract. Here, both parties are held to have contracted for the
purchase and sale of a barren cow. Afterwards, this mutual assumption is discovered
to be at variance with the fact of the cow's pregnancy. Such a mutual mistake goes to
 the "essence of the transaction" in that it changes the value of the subject matter
tenfold over the contract price. Such circumstances excuse the seller's executory
obligation.
32. YES
Here, there is a unilateral error as to the value as it is fixed in the mind of the seller.
Such a mistake of judgment (as opposed to a unilateral mistake in computation)
generally does not prevent the formation of a contract between parties dealing at
arm's length, even though the other party is of the well founded opinion that the
offeror is mistaken in his judgment.

33. a. PROBABLY YES

O can probably recover the $8,000. There is a unilateral mistake which is
unknown to O, who has accepted reasonably and in good faith.

b. PROBABLY NO
If the disparity had been $38,000 ($12,000 vs. $50,000 as the next lowest bid),
there would still be a unilateral mistake, but here the facts strongly suggest that O
could not form a reasonable, good faith belief that the bidder was not mistaken
when he submitted such an obviously defective bid. The law protects and rewards
only commercially reasonable expectations entertained in good faith.

34. PROBABLY YES

While there is a division of authority here, most courts hold that there is a contract on
the terms actually transmitted to the offeree unless the mistake would be so obvious
that no reasonable person in the position of the offeree could have assumed that it
represented a correct manifestation of an offeror's intention. Here, the error is two
cents per pound on a 621t per pound item. A minority of courts would hold that no
contract was formed on a theory that the error in transmission prevented the minds of
the parties from meeting on an offer.

35. YES
There is a binding contract, and it is for the sale of the house that A knew O to own
on Peck Road. O is guilty of using a patently ambiguous term as to her own
understanding. A is not chargeable with such negligence; hence, credence is given to
A's construction of the term.

36. NO
No recovery can be had either on the contract or in quasi-contract, because p (the
party who violated the statute) is seeking to enforce the contract; he is not an
"innocent" party. The courts take the position that activity by an individual who
proceeds without a mandatory license to traffic in the affairs of such a calling or
profession is "illegal."

37. a. YES
Because the agreement is with a minor, it is voidable at the option of the minor.
 c. YES
The landlord may always recover in quasi-contract for necessaries had and received.
Recovery is measured by the market value, not the contract price.
38. MAYBE
Contracts induced by duress are voidable, but merely taking advantage of another's
economic need generally is not duress.

39. (D)
Under the majority view, termination is not the equivalent of performance and so
does not take a contract out of the Statute of Frauds. The minority view is contra. The
remaining obligations are capable of being discharged within one year. The lifetime
employee may die, requirements or output may cease, and the lease may be
terminated within a period of one year following the making of these oral promises.
Since performance is technically possible (however unlikely), the Statute of Frauds
has been held not to apply.

40. TRUE
The price set by the terms of the contract is determinative.

41. FALSE
Under the majority view, such a contract would be voidable at the option of the party
to be charged. The party would have to raise the Statute as an affirmative defense.

42. a. YES
C can enforce the obligation of A on the theory that C was an intended third party
beneficiary of a direct obligation of performance created in the A-B contract.

b. NO
D is only an incidental beneficiary. D might be economically benefited by A's
performance, but this is insufficient to vest in D enforceable rights.

43. NO
Such a beneficiary would have an enforceable right to sue for the promisor's
performance, but generally has no remedies against the donor-promisee, who is under
no existing obligation. The donor-promisee has simply attempted a gift.

44. NO
Such a contract right to scholarship funds would be considered non-assignable in that
it would vary the promisor's obligation or undermine the confidence that induced
selection of the original promisee as the beneficiary of the scholarship assistance.

45. a. NO
Such an attempted assignment of the insurance coverage would vary the risk of the
promisor (insurer) in that the risk of a casualty loss would vary with the habits and
practices of the occupant of the insured premises.
 b. YES
If the fire has already occurred, the proceeds of A’s claim are assignable. Here, there
would be no enlargement of the insurer's obligation or risk.

46. NO
Even though the debt in both instances will be secured by a mortgage on the same
land, A cannot be forced by this unilateral assignment to accept C's credit risk in lieu
of that of B, the original promisee.

47. NO
Here, there is an attempt to make a present assignment of future rights in a non-
existing future contract. For the simple reason that a contract for the sale of Blackacre
does not presently exist, there is no operable present assignment. Note that since the
assignment was for consideration, courts can treat it as a contract to assign and under
this rationale, impress a constructive trust on any proceeds that A may realize from a
sale of Blackacre in the future, thus protecting B's interest.

48. YES
Here, the language of the agreement would be held to destroy only A's right to make
an assignment, but it does not destroy A's power to do so. The assignment will be
effective, and A will be liable for breach of the covenant not to assign.

49. NO
As a general common law rule, no formalities are mandatory to create a present
assignment. There is a major exception for assignments of land or an interest in land.
Here, the Statute of Frauds would be operable and would require a writing signed by
the party to be charged (here, the assignor).

50. YES
Since it is made without consideration, a gratuitous assignment is revocable by the
assignor at any time before the promisor of the obligation that has been the subject of
the assignment renders performance to the assignee.

51. TRUE
Such detrimental reliance, which is reasonably foreseeable to the assignor, will give
rise to a substitute for valuable consideration and will function to cut off the
assignor's power of revocation.

52. YES
If a gratuitous assignment of a simple chose is in writing, the assignment is
irrevocable.
53. TRUE
The assignment to B, although first in time, was gratuitous and oral and, hence,
revocable. Such revocation was automatically accomplished when A, as assignor,
made the second assignment to C.
54. FALSE
The general rule is that where an assignor makes two assignments of the same right
and the first assignment is irrevocable, the first assignee has priority.

55. YES
Although some of the old cases required an express assent to the assumption of
delegated duties, the prevailing modem view is that acceptance of the rights under an
assignment that clearly is coupled with a delegation of duties operates as legally
effective assent to receive the delegation of duties as well as assignment of rights.

56. DEPENDS
A can show additional oral terms unless the writing was an integration of all the
agreements between the parties. Whether a writing represents such an integration is a
question of intention. If A and B came to regard the writing as representing the full
and final expression of the terms of their agreement, then for purposes of application
of the parol evidence rule, the writing is regarded as "integrated."

57. TRUE
Parol evidence may always be offered for the purpose of establishing the terms of a
"collateral agreement." Here, the theory is that the parties reached two agreements,
only one of which was reduced to an integrated writing. The proffer of parol evidence
goes to the establishment of the terms of the second agreement, which the parties
intended to "rest in parol."

58. TRUE
The operation of the classic "condition subsequent" is to extinguish a present contract
obligation.

59. NO
True "constructive conditions" arise on the theory that they are inserted by operation
of law in the interest of preserving fair and equitable dealings between the parties.

60. FALSE
The plaintiff has the burden of pleading and proving that all conditions precedent to
or concurrent with the ripening of the defendant's duty of performance have either
been performed or excused. Once this is established, the defendant, if he would rely
on the escape possibility afforded by a condition subsequent, must allege and prove
the happening of the event or contingency that satisfied the condition subsequent as a
matter of affirmative defense.

61. YES
 Here, it is likely that the condition will be held to have been excused by B's conduct.
The key issue would be whether A can fairly be said to have assumed the risk that B
would dispose of the hotel by means that technically were not a "sale." As a business
creditor, it’s highly unlikely that A would be held to have assumed this risk.

62. NO
The factor that prevents this from being a case of excuse by prospective inability to
perform is the fact that in the July 1 conveyance to T, the vendor retained an option to
repurchase "at any time." Clearly, such conduct on the part of the vendor, who is
under an executory contract duty. to convey to his vendee on September 1, would
give the vendee reasonable grounds for insecurity and a right to demand of the vendor
adequate assurance of performance. Failure of the vendor to respond with such
assurances within a commercially reasonable period will ripen into a breach by the
vendor that would then excuse the duty of counterperformance.

63. TRUE
It establishes a prospective failure of condition, as much as actual prevention.

64. a. NO
Here, A's statement falls far short of an unconditional present repudiation of his
executory contract obligation and thus fails to provide grounds for a present breach
by anticipatory repudiation.

b. NO
For the simple reason that there exists no present breach of the contract on the part of
A, B does not have an immediate cause of action against A.

65. TRUE
Nearly all American courts have allowed recovery of the restitution interest in an
action premised on a theory of quasi-contract.

66. TRUE
Under such circumstances, performance of the personal services that formed the
subject matter of the agreement has been rendered legally impossible.

67. TRUE
If the default on the part of the other party amounts to only a minor breach, the
aggrieved party is not relieved of a duty to render performance of his own promise,
but having done so, such a party may recover any consequential and ascertainable
damages occasioned by even the minor breach.

68. TRUE
The U.C.C. provides that the buyer may buy substitute goods and recover the
difference between the contract price and the price of the substitute goods.