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Basic Contract Law
Directions: Answer these questions on a separate piece of paper. You may need the Internet. 1. If you read the directions above, then write “Yes”; if not write “No”. 2. Connie Adler agreed to go to the homecoming dance with Fred Wolfe. Fred bought tickets, rented a tuxedo, and purchased a corsage for Connie. Later Steve McNamara, the captain of the football team, asked Connie to be his date for homecoming. Connie broke her date with Fred so she could go to the dance with Steve. Does Fred have a legal claim against Connie? Explain using LEGAL reasons. 3. Hanson Appliance Company wanted to display its stainless steel refrigerator in their direct mail advertisement for $1490 but the advertising company that printed the flyer printed the price as $149. Customer David Smith demands that Hanson Appliance sell him the refrigerator for $149—the advertised price. Does Hanson Appliance Company have to sell their refrigerator for $149? Give a good LEGAL reason for your opinion. See if the famous case of O’Keefe vs. Lee Calan Imports, Inc. helps you make up your mind. 4. What do you think is the difference between a revocation and a rejection? Here’s an example: suppose a friend offers to sell you a jacket. You agree to consider the offer. Your friend calls the next day and tells you that the jacket is no longer for sale. Has the offer been revoked or rejected? What’s the difference between revocation and rejection? 5. Do the courts require that a contract be fair before the court will enforce it? 6. While you are at Eric’s house, Serina calls to ask Eric about some computer equipment he is selling. Eric tells Serina the computer equipment is all top quality and hasn’t been used much. You know for a fact that Eric is not being completely honest with Serina. You are a friend of both Eric and Serina. What will you do? 7. Akeo Shimazu signed a form without reading it. He assumed the form was a request for a free sample copy of a new expensive book. When his order arrived, he found that he had signed an order form buy the book. Shimazu refused the book, claiming he was not bound by the agreement because of his mistake. The book company says the book has now lost value because the book is now “used”. Is Shimazu legally bound by the agreement to buy the book? Explain. 8. Helena Crump was hired to take care of Lorna Boff, an elderly lady who was in poor health. Crimp was a strong, persuasive person, and Boff was weak and ill. After caring for Boff for three weeks, Crump talked Boff into signing a contract agreeing to transfer all of Boff’s property to Crump and none of it to Boff’s family. On what legal grounds may this contract be attacked? Explain. 9. Benton signed some documents when she opened a cash management account with a brokerage firm—sort of like opening a bank account at a bank. Benton did not read the documents because she could not read English. The broker (a person like a banker) did not know that Benton could not read English, and Benton did not ask the broker to read the documents to her. Is Benton bound by the agreement? Explain. Look over Merrill Lynch, Pierce, Fenner and Smith vs. Benton for some help. 10. Bob Goodman made a verbal agreement to buy an iPod from Howard Hermann for $100. When Hermann delivered the iPod, Goodman refused to accept it, stating that he was not bound by his verbal agreement. Goodman says that all contacts have to be in writing for a court to rule against him. Was he correct? Why or why not?

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