Contracts Keyed to Kuneyback
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An owner of a chain of bookstores occupied a store in a mall. The bookstore owner’s lease for this store, from the landlord, the owners of the mall, provided him with 5,000 square feet of space. When the lease was about to expire, the bookstore owner devoted significant time and effort to find a suitable new site for his store. After months of negotiation, the bookstore was about to sign a lease on the new location he had found, when he received a phone call from the landlord. The landlord’s representative convinced the bookstore owner to stay on by stating, “We’ll give you a two-month option to renew your five-year lease.” The bookstore owner subsequently paid an architect $9,000 to redesign the store and included the mall’s address when preparing a $24,000 direct-mail campaign. With more than a week remaining on the option, the bookstore owner was notified by the landlord that they were revoking the option because the mall was to be demolished. The bookstore owner brought an action to compel the landlord to honor its option and the lease. Of the following arguments, which would be most persuasive in the bookstore owner’s favor?CorrectIncorrect
An owner of a chain of supermarkets and an owner of a department store chain, agreed on a cooperative advertising program whereby both parties would share the costs of the campaign based on their respective average retail sales. They appointed an independent auditor to monitor their sales and bill them for their respective shares. The supermarket owner paid several bills without complaint, but then he said he had discovered an accounting error made by the auditor that had led him to pay a disproportionate amount. The supermarket owner asked the department store owner to refund the amount the auditor had caused him to overpay. The department store owner refused to give the supermarket owner a refund. The department store owner found it hard to believe that the auditor had erred.
The supermarket owner proposed a settlement to their dispute. The supermarket owner offered not to pursue his claim for the refund in exchange for the department store owner’s promise to pay the supermarket owner’s maintenance costs for the common areas of their shopping center for a two-year period. The department store owner said, “Okay, I’ll agree because you’re stubborn, but I still think that you’re wrong.”
Six months after the advertising agreement was signed, The department store owner’ department store in the mall experienced a sharp decline in sales. The department store owner closed the store to cut her losses. She managed to sublease the store to a tenant, who agreed in the sublease to maintain the common areas as per the supermarket-department store agreement. Shortly after the tenant subleased the department store owner’ store, he realized his sales were very low and moved the store to another shopping center. The supermarket store owner was forced to pay for maintaining the common areas.
Was the department store owners’ promise to maintain the common areas supported by consideration if the accountant did not in fact err?CorrectIncorrect
A driver operated a tractor for a constructor. Without informing the constructor, the driver drove the tractor home after work to use in the landscaping of his neighbor’s yard. The neighbor was so thankful that he gave the driver a six-pack of beer that the driver drank while driving the tractor back to the construction site.
The driver negligently lost control of the tractor, ramming into a crowd of pedestrians and a puppy on the sidewalk. One of the pedestrians was seriously injured requiring six months of physical therapy for a fractured hip. The constructor mistakenly believed that he was liable for the damages in the accident. He visited the pedestrian in the hospital and told the very distraught man, “Don’t worry about anything. I am going to pay for everything.” The constructor then told the pedestrian’s physical therapist, “Take care of the pedestrian, and I’ll take care of you.”
An owner of the puppy who died a slow painful death from wounds received in the accident threatened to sue the driver, who had no assets. A constructor contacted the puppy owner and told her, “If you agree not to sue the driver, I will compensate you for all of your damages.”
If the pedistrian brings an action against the constructor for pain and suffering, the constructor should assert in his defenseCorrectIncorrect
An oil company had the following contract with a refinery:
“The oil company agrees to purchase all of its refined heating oil for the next six months from the refinery. The price will be determined by the heating oil price on the Mercantile Exchange on the day of delivery. Guess reserves the right to purchase all or part of the refinery’s output. The refinery agrees to produce a minimum of 10,000 barrels of heating oil per day.” The contract was written and properly authenticated.
After three months, the refinery asked the oil company if they would agree to lower the minimum to 5,000 barrels per day. The oil company agreed, but only if the refinery agreed to accept payment after twenty days rather than after ten days as they had previously agreed. The refinery and the oil company shook hands on this new arrangement.
Four months into the contract, a tremendous explosion destroyed the refinery’s primary refinery. The refinery stopped delivering oil to the oil company.
Was the original agreement between the oil refinery and the oil company enforceable?CorrectIncorrect