Contracts Keyed to Barnettback
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A planter contracted with a homeowner to plant grass, trees, and bushes on the plot where the homeowner was constructing a new house. The homeowner was afraid that the job would not be completed before the first frost, so the parties agreed that “all work will be completed by November 1.” The planter also agreed to extend a warranty of “The homeowner’s 100 percent satisfaction.” The contract provided that the homeowner would be obligated to pay in full within fifteen days of the work’s completion.
The planter’s work was delayed because the homeowner was delinquent in paying the general contractor building the house. The general contractor suspended work for two months. The planter could not begin the landscaping until the house was completed and all building-related refuse was carted away. The planter completed landscaping on November 7. The homeowner was dissatisfied with the results. When the planter asked what he specifically did not care for, the homeowner shrugged his shoulders and said, “I don’t know, I just don’t like it.”
Which of the following statements is most accurate?CorrectIncorrect
The manager of a monthly antique market was looking to hire a professional appraiser who would tell patrons, for a fee of $10 per item, what their antique is worth. Because the man- ager had had problems at other antique markets he had run because appraisers built up a popular following and then abruptly quit for a better job, he emphasized during the hiring interview the importance of honoring the contract to its completion. When the manager offered the job to an experienced appraiser, and the appraiser accepted, the written contract signed by the appraiser contained, in addition to an agreed-to salary, a liquidated damages clause for early termination of the contract. It also contained another clause providing that the appraiser would receive 5% of all gate receipts to be paid as a bonus at the end of the contract, which ran for one year.
Eight months into the contract, the manager’s worst fears were realized when the appraiser got a more lucrative offer and abruptly quit, leaving the manager scrambling to find a replacement for him. In response to the manager’s suit for breach of contract, the appraiser brings a countersuit to recover 5% of gate receipts for the antique markets at which he worked.
Will the appraiser be successful in his countersuit?CorrectIncorrect
On October 19, 1987, a day that became known as “Black Monday,” stock markets across the world plunged. The Dow Jones Industrial Average, which gauges the value of thirty Stock Exchange “Blue Chip” issues, declined more than 500 points. This represents 20 percent of its value. At 2 p.m., an investor decided to sell his entire portfolio. He dialed his broker but the line was busy. For the next half-hour, the investor kept redialing his broker’s number but could not get through. At 2:30 p.m., the investor heard a report that many people could not reach their swamped brokers. Those who did reach their brokers still could not sell their stocks because buyers were nowhere to be found.
“My God, my stocks are worthless! I better pull my money out of the bank before the banks go, too,” the investor thought.
The investor ran to his bank, withdrew $100,000, stuffed the cash in his attaché case, and ran home. When he arrived home, he heard a report that the dollar had fallen to postwar lows against the Japanese yen, Swiss franc, and German mark. On that basis, the investor decided to trade in his cash for gold.
“I’d better buy some gold before this green is worthless,” the investor thought. He was too exhausted to run around any more so he made his building’s doorman a proposition. “I need your help. I have to invest in gold. I’ll pay you $5,000 if you take this money downtown to and buy as many one-ounce Canadian gold coins as they’ll give you. Don’t worry about the door, I’ll open it for whoever comes by,” the investor said. The doorman agreed to the deal, hailed a cab, and went to find that the supply of Canadian coins had already been depleted. He could not contact the investor because the apartment house’s lobby did not have a phone. The doorman decided to buy one-ounce South African Krugerands instead. The Krugerands were composed of the same percentage of gold as the Canadian coins. When the doorman returned with the coins, the investor told him, “I can’t believe you did this. I refuse to lend my support to apartheid. Forget about the money I promised you.”
In an action asserted by the doorman against the investor, the trial judge should rule that the doorman’s purchase of KrugerandsCorrectIncorrect
A university contracted with a general contractor to build an academic building. The contract stated that all work should be completed by August 1, and contained a clause stating that “both parties are aware that classes begin the Wednesday after September 1.” The building was not completed until the middle of October and the university withheld all payment. The court’s decision on whether the university will be liable for the contractual price of the construction will most likely be determined by whetherCorrectIncorrect