Contracts Keyed to Barnettback
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An online search engine corporation wishing to acquire a smaller website entity hired a law firm to perform its target’s audit for a bundled fee of $2.5 million. A first fee installment of $1 million was to be paid on completion of the data collection process, which was to be completed within three weeks. A second installment was to be paid on receipt of a valuation of the target website entity’s liabilities, due after another five weeks. The contract provided in part that “any amendments to this agreement must be in writing signed by both parties.”
On completion of data collection after 25 days, the law firm demanded payment of the first installment payment of $1 million. The client refused, but negotiations conducted between the parties resulted in an oral agreement that the client would pay $750,000 immediately, and then the $1.5 million second installment as originally agreed, after valuation of all liabilities.
Was the oral agreement that the client pay $750,000 to the law firm after 25 days a valid modification of the original agreement?CorrectIncorrect
A builder and a wealthy landowner entered into a written contract whereby the builder would build on the grounds of the landowner’s estate a mausoleum, using imported Italian granite, to hold the remains of the landowner’s recently deceased wife. The cost of the mausoleum was set at $100,000. After the contract was signed but before construction began, the builder learned that an unforeseen embargo prevented him from getting the granite he planned to use to build the mausoleum. He could get the granite from another source, but it would cost an additional $25,000. The builder explained the situation to the landowner, who agreed to pay $125,000 to have the mausoleum built. The builder prepared a writing stating that the price for the mausoleum was now $125,000. Both the builder and the landowner signed the writing. After the work was completed, the landowner gave the builder a certified check for $100,000 and refused to pay one penny more.
If the builder brings suit against the landowner to recover the additional $25,000, will the builder likely prevail?CorrectIncorrect
A professional wrestler entered into a written agency contract with an agent, who agreed to try to get the wrestler’s picture on a variety of food products. The wrestler promised that the agent would have the exclusive right to promote the wrestler on food product lines. They agreed that the wrestler would receive 70% of the proceeds and that the agent would receive 30%. The agent was able to persuade a breakfast cereal company to put the wrestler’s picture on their cereal boxes. Shortly after the agent confirmed the cereal deal with the cereal manufacturer, the wrestler and the agent agreed orally that henceforth the wrestler would receive 50% of the proceeds, including proceeds from the cereal deal, and the agent would receive the other 50%. The wrestler received a $10,000 check from the cereal manufacturer, and he promptly sent the agent a check for $3,000. The agent demanded an additional $2,000, but the wrestler refused to pay.
If the agent sues the wrestler for the $2,000, the party likely to prevail is:CorrectIncorrect
The owner of a summer cottage contracted to put new vinyl siding on the cottage for $10,500. Two weeks before the work was to start, however, the contractor called to say that there was a clerical error in the bid and that he could not do the work for less than $12,000 or he would lose money. The cottage owner agreed to pay the additional $1,500 but told the contractor that he was being unfair. After the work was completed, the cottage owner handed the contractor a check for $10,500, telling the contractor that that was all he would pay him because he had no right to raise the price.
If the contractor sues the cottage owner for the additional $1,500, who will prevail?CorrectIncorrect
Was the agreement to pay half the expenses as construction proceeded a valid modification?CorrectIncorrect
Which of the following choices, if true, would best support The Seller’s position?CorrectIncorrect
A homeowner contracts with a contractor to build him a home, 3 stories, for 900,000. The contract includes that, in addition to the 3 stories, the home will have a one car garage. The homeowner decides that he wants a two car garage, and asks contractor if this is possible. The contractor says “sure, why not? I really have nothing better to do!”
The contractor completes the entire 3 stories, but only builds a one car garage. The homeowner refuses to pay the 900,000 to the contractor.
If the contractor brings a claim for payment, who will prevail?CorrectIncorrect