ANSWERS TO CHAPTER 1hfbus019/PDFs/CH 1_18 Answers280_14e.pdfP’s failure to counter the affirmative...

Business Law: The Ethical, Global, and E-Commerce Environment, 14E 379

CHAPTER 1 THE NATURE OF LAW

ANSWERS TO CHAPTER 1

True-False Multiple Choice

1. T

2. F

3. F

4. T

5. T

6. F

7. F

8. T

9. F

10. T

11. F

12. F

13. F

14. T

15. b

16. d

17. a

18. d

19. b

20. d

21. c

22. b

23. c

24. d

25. c

26. a

Short Essay

27.

Administrative agencies and chief executives get the power to make law through a delegation from the legislature. In other words, the legislature effectively hands over some of its power to the chief executive or to an administrative agency that it has created. However, so loose are these delegations of power sometimes that Joe’s view may not be completely off the wall.

28. John should argue that he is not guilty under legislative history or intent—the purpose of the law is to protect crops from large farm animals. The prosecutor may argue plain meaning—a cat is “another animal.”

29. No, Fred has not intelligently applied the doctrine of stare decisis. The tort of intentional trespass to land presumably exists to enable people to control conditions on the land they own (which should include a right to exclude intruders). If this is the relevant purpose, and if there is liability for trespasses by the various animals described earlier, why shouldn’t there also be liability for trespasses by geese? In other words, Fred has made what lawyers call an artificial distinction: one without a point, purpose, or moral justification. In this context, what’s the difference between intrusion by chickens and intrusion by geese?

380 Answers to Student Study Guide and Workbook Questions

30. Because he seeks simply to discover existing law and apply it to the case before him, Marvin basically is a legal positivist judge. Because Emily is concerned with what is morally right, and because she wants to ensure that the law also has this quality, she exemplifies natural law thinking. Because Sam wants the law to follow prevailing values and interests, he exemplifies the wing of sociological jurisprudence which says that the law ought to follow prevailing feelings and demands, whether right or wrong.


CHAPTER 2 THE RESOLUTION OF PRIVATE DISPUTES



1. F

2. T

3. T

4. F

5. F

6. T

7. T

8. T

9. F

10. F

11. F

12. T

13. T

14. F

15. d

16. a

17. b

18. a

19. a

20. b

21. c

22. b

23. a

24. b

25. a

26. c

Short Essay

27. The motion for judgment NOV is made at the end of the trial after a verdict has been reached. The motion asks the judge to reverse the verdict and enter judgment notwithstanding the verdict. The motion to dismiss for failure to state a claim generally is made early in the proceedings and long before trial. It asks the court to dismiss the case because the law does not give a remedy to the plaintiff based on the facts of his complaint.

28. P’s failure to counter the affirmative defense means that she loses her breach-of-contract suit against D. Her failure to defeat the counterclaim means that D recovers against P for fraud.


29. Both in personam jurisdiction and in rem jurisdiction are territorial in the sense that they involve people, things, or activities residing, existing, or occurring within a state’s borders. Either of these two types of jurisdiction, when combined with a court’s subject matter jurisdiction, will give the court the power to render a judgment that is binding on the parties. The crucial difference between in personam jurisdiction and in rem jurisdiction is that the former is based on the residence, location, or activities of a person within the state, whereas the latter is based on the fact that property is located within the state.

30. It’s more correct to say that there must be jurisdiction before venue questions arise. Jurisdiction concerns the question whether some class of courts (e.g., state trial courts or the federal district courts) has the power to hear a case. Venue involves the question of which courts of the class (e.g., which state trial court or which federal district court) is the appropriate forum for the case.


CHAPTER 6 INTENTIONAL TORTS



1. F

2. F

3. T

4. F

5. F

6. T

7. T

8. F

9. T

10. T

11. F

12. F

13. F

14. F

15. d

16. a

17. d

18. b

19. d

20. a

21. b

22. b

23. a

24. a

25. c

26. b

27. c

Short Essay

28. The doctrine of transferred intent applies when a defendant who intends to injure one person actually injures another. For example, D throws a rock at A but hits P instead. D is liable for injuries caused to P even though he intended to hit A.

29. Public officials and public figures must prove actual malice (knowledge of falsity or reckless disregard for the truth) in order to win a defamation suit. Sincere probably must prove actual malice in order to win her suit against Rustler. A person who voluntarily involves herself in a matter of public controversy can become a public figure. Here, Sincere voluntarily became an anti-abortion leader. Abortion rights clearly are a matter of public controversy. The false statement about her—that she supposedly had an abortion recently—might seem purely private and ordinarily might be so regarded. Here, though, the alleged abortion is connected with the abortion rights controversy and with the appropriateness of Sincere’s role in it. Thus, the statement probably is a matter of public concern and Sincere probably has to prove actual malice. Had the statement involved a genuinely private matter, however, the actual malice test would not apply.


30. Amy has a chance of recovering. Although Bob lacked knowledge or reason to know that the watch was stolen, the culpability required for liability is the mere intent to exercise dominion over the plaintiff’s property. But was there a serious interference with Amy’s property rights in the watch? This triggers consideration of all the factors laid out in the McCray case. Factors a, d, and f work against Bob, while factors c and (maybe) e help him. Like other good-faith buyers and sellers of stolen property, therefore, Bob might be liable for conversion.

31. Pete can’t recover for battery, because there was no physical contact with his body or anything attached to it. But it looks as if there was reasonable apprehension of an imminent battery at the time the threat occurred. There also was intent to make harmful contact on Nelson’s part, and hence an assault. Because she never saw the shot coming and thus didn’t suffer apprehension at the time of the treat, Priscilla can’t recover for assault. But there was harmful physical contact to which she did not consent. If Nelson defends by claiming that he didn’t intend to hit Priscilla, Priscilla can invoke the doctrine of transferred intent.


CHAPTER 7 NEGLIGENCE AND STRICT LIABILITY



1. F

2. T

3. F

4. F

5. F

6. T

7. T

8. F

9. F

10. T

11. F

12. F

13. a

14. c

15. b

16. a

17. b

18. c

19. c

20. c

21. a

22. b

23. b

24. b

25. a

Short Essay

26. The question under negligence per se is whether the harm that occurred to plaintiff is the kind of harm the ordinance was intended to prevent, and whether plaintiff is the kind of person the ordinance was designed to protect. P should be able to get to the jury on this issue. The question under the test of proximate cause is whether the fact P was struck by a third party was a foreseeable intervening cause. Again, P should be able to get to the jury on this question.

27. Pete probably will not recover, but Sam’s estate probably will. Jane committed a breach of duty, both plaintiffs suffered actual injury, and there was but-for causation between the breach and each injury because neither would have occurred without the breach. However, it is unlikely that there was proximate cause between the breach and either injury, because each seems remote from the breach in terms of foreseeability and links in the causal chain leading to the injuries. However, because negligence invites rescue, Sam probably will recover despite the absence of proximate cause. The reason is that he died while making a reasonable rescue attempt.


28. Melvin almost certainly has breached a duty under the reasonable person standard. As past experience should have taught him, placing his leavings on and around the controls made it reasonably foreseeable that they would jam. The potential consequences of jammed controls were severe. Melvin’s conduct had no social utility—quite the contrary. Melvin could easily have avoided the risk by, for example, using a handkerchief. Thus, there was a duty on Melvin’s part to avoid the conduct that caused the gates to jam—a duty he did not meet. As for negligence per se, Melvin obviously violated the statute. However, because the statute was only intended to protect state employees, the downstream plaintiffs probably were not among the class of persons intended to be protected. In any event, they didn’t suffer the harms the statute was intended to protect against: disease and moral degradation.

29. Typically, tort reform measures either reduce defendants’ liability (the chance that a judgment will be entered against them), or their damages (the amount they will be required to pay if liable). Statutes limiting the liability of social hosts exemplify the first strategy, and statutes limiting punitive damages or pain and suffering exemplify the second. The second strategy is the more common of the two.

30. No, because there is no actual or but-for causation between breach and injury here. P would have died even if the exits had been in great shape.


CHAPTER 8 INTELLECTUAL PROPERTY AND UNFAIR COMPETITION



1. F

2. F

3. T

4. F

5. F

6. T

7. T

8. F

9. T

10. T

11. F

12. T

13. c

14. d

15. b

16. e

17. b

18. a

19. b

20. c

21. c

22. b

23. a

Short Essay

24. Five categories relevant to the determination of distinctiveness are (1) arbitrary or fanciful marks (these are most distinctive); (2) suggestive marks (marks that convey the nature of the product or serve through imagination, thought, and perception); descriptive marks (marks that directly describe the product or service); (4) marks that are not inherently distinctive (protected if a secondary meaning exists); and (5) generic terms (terms ineligible for protection).


25. The approach taken by the Supreme Court in a similar case (Harper & Row, Publishers, Inc. v, Nation Enterprises, decided in 1985, indicates that the court would be likely to reject Newspeak’s fair use defense. Judicial evaluation of a fair use defense involves consideration of four factors. The first factor is the purpose of the use. Although Newspeak would maintain that the purpose of the use was news reporting and therefore arguably fair, the Supreme Court indicated, in the Nation case, that news reporting may sometimes have significant commercial elements to it as well. Commercial uses are more likely to be considered unfair than fair. Arguably Newspeak’s article has its commercial side. The second factor is the nature of the copyrighted work. Here, as in Nation Enterprises, the copyrighted work was unpublished. It appears that the scope of fair use of an unpublished copyrighted work is narrower than the scope of fair use of a copyrighted work. The third factor is the amount and substantiality of the copyrighted work that was used by the defendant. Here, the court probably would be concerned about the heavy use of direct quotations from Vanessa’s account, and its use of what may be considered the heart of her manuscript. The facts in Nation Enterprises were similar, as was the Supreme Court’s reaction to those facts (magazine’s unconsented quotation of 300–400 words from unpublished manuscript of Gerald Ford’s memoirs, with quoted portion being manuscript’s discussion of Ford’s deliberations in deciding whether to pardon Richard Nixon). Finally, the fourth fair use factor—the effect of the use on the market for the copyrighted work—cuts against Newspeak because the facts show that its actions already have cost Vanessa the benefit of the publishing commitment. As noted by the Supreme Court in Nation Enterprises, the fourth is the most important of the fair use factors. Considered together, the four factors militate against a conclusion that the fair use doctrine should protect Newspeak from liability.

26. Wendell cannot obtain a patent because abstract ideas and other mental concepts are not patentable by themselves. The first reason Wendell cannot get copyright protection is that to be copyrightable, a work must be fixed: set out in a tangible medium of expression. Second, copyright law does not protect concepts, ideas, principles, etc. in themselves, but only the tangible form in which they are expressed. Here, Wendell’s proof never found tangible expression.

27. A mark acquires secondary meaning when its identification with a particular source of goods or services has become firmly established in the minds of a substantial number of buyers. This is important because descriptive marks are not protected unless they acquire secondary meaning.


CHAPTER 9 INTRODUCTION TO CONTRACTS



1. F

2. T

3. F

4. F

5. T

6. F

7. F

8. T

9. F

10. F

11. c

12. d

13. d

14. d

15. c

16. c

17. a

18. b

19. c

20. d

Short Essay

21. Jill may be able to recover the reasonable value of her lost property from Jane under the doctrine of promissory estoppel. To be successful, Jill must prove that Jane made a promise to her, knowing that she (Jill) would rely on that promise, that Jill did in fact reasonably rely on the promise, and that it would be unjust not to compensate Jill for damages based on that reliance.

22. Friendly should lose its quasi-contract claim against Onious even though Onious acted unlawfully in stealing the insurance check. Onious was unjustly enriched in that he had no entitlement to the money he stole and spent, but he was not unjustly enriched by Friendly. Friendly’s quasi-contract claim suffers from a fatal defect: the fact that Friendly never conferred any benefit on Onious. In order to succeed on a quasi-contract claim, a plaintiff must show that he, she, or it conferred a benefit on the defendant, that the defendant knowingly accepted and retained the benefit, and that under the circumstances, it would be unjust not to allow the plaintiff to collect the reasonable value of the benefit from the defendant. Friendly’s claim fails on the first basic element because no reasonable characterization of the facts would allow Friendly to establish that it benefited Onious. Instead, Debtor is the proper party to proceed against Onious.


23. The court will resolve this issue by determining which aspect of the contract—the services aspect or the goods aspect—predominates. If the services aspect predominates, the common law will control the entire contract. If the goods aspect predominates, UCC Article 2 will control the entire contract. Although the facts set forth in the question are minimal, Monroe is probably correct in its argument that the common law will control. In a construction contract, the parties presumably would be placing greater importance on the construction services aspect of the transaction than on the furnishing of goods (building materials) aspect of the transaction. In contracting with a particular builder, it would seem that the skilled (hopefully?) services of the builder would be what the other party is primarily seeking. The building materials will not do the prospective homeowner much good if he does not have a builder to construct the house. In addition, from the builder’s standpoint, construction services would be the builder’s primary business emphasis, with the furnishing of materials being a secondary— though of course still important—matter.


CHAPTER 10 THE AGREEMENT: OFFER



1. T

2. F

3. F

4. T

5. F

6. F

7. F

8. T

9. T

10. F

11. d

12. a

13. c

14. c

15. b

16. d

17. a

18. b

19. c

20. b

Short Essay

21. An offer can be revoked expressly by the offeror (either in writing or, if permitted under the statute of frauds, orally); an offer is also revoked automatically by law upon the death or insanity of either party, destruction of the subject matter of the contract, or intervening illegality of the contract.

22. Bushcorp is likely to win the case because of the common law’s traditional approach to the definiteness/indefiniteness issue. This case is governed by the common law rather than the UCC because the services aspect of the supposed contract predominated over the goods aspect. The common law approach is that the omission of an important term usually to be expected in a contract on the subject matter at issue will normally make the “contract” unenforceable for lack of definiteness. In such a situation, there is no valid offer and hence no valid acceptance, even if the parties arguably intended a contract. A price term—what Bushcorp would be expected to pay for Quayleco’s services—was omitted here. This would appear to be such a fundamental omission that there is no valid contract. The supposed contract is too indefinite to enforce. If the UCC applied here (which it doesn’t), the result would be different because of section 2-204 and the court’s ability to employ gap-fillers. (An alternative, though probably less satisfactory, analysis would note that modern contract law reflects some “softening” in the definiteness requirement and that Quayleco might have some chance of success if the court were to take a broad view of what is sufficient definiteness.)


23. Schlemiel should win the case because he properly revoked his offer prior to acceptance by Feeble. Hence, no contract arose. The basic firm offer rules—if they were all that applied here—would lead to the opposite result. Schlemiel, after all, was a merchant who offered to purchase goods by means of a signed writing which gave assurances that the offer would be held open. Here, however, there was not a firm offer because the facts caused the triggering of an additional firm offer element that was not satisfied. Because Schlemiel’s offer was submitted on a form prepared by the offeree (Feeble), there was no firm offer unless Schlemiel separately signed the assurance term (the promise to hold the offer open for 30 days). Nothing in the facts indicates that this separate signing took place. As a result, there was no firm offer here, meaning that the controlling rule is the general one that an offeror is entitled to revoke prior to acceptance. If Schlemiel’s offer had not been on Feeble’s form, there would have been a firm offer and Schlemiel’s revocation prior to the expiration of the 30-day period would have been ineffective to terminate the offer.


CHAPTER 11 THE AGREEMENT: ACCEPTANCE



1. F

2. F

3. F

4. T

5. T

6. F

7. F

8. T

9. F

10. F

11. b

12. d

13. b

14. c

15. b

16. d

17. c

18. d

19. c

20. a

Short Essay

21. Libby should be entitled to a ham under one of two theories—because acceptance of a unilateral contract requires proof that she began performance, or that the offer’s power to revoke is suspended for a period of time necessary for her to complete performance.

22. Lane and Road do not have a contract even though Road sent her acceptance by an impliedly authorized means (mail) and even though acceptances communicated by an authorized means are normally effective on dispatch. The effective on dispatch rule does not apply if the offer states that an acceptance will be effective only on receipt by the offeror. Such language appeared in Lane’s offer. Therefore, in view of the terms of the offer, Road’s acceptance could not have been effective until Lane received it. Lane properly revoked her offer—thus terminating it—before any acceptance by Road could have taken effect. Hence, the parties do not have a contract.

23. In recent years, many courts have tended to liberalize the common law’s mirror image rule by holding that only material variances between an offer and a purported acceptance result in a rejection of the offer. UCC section 2-207 (the “battle of the forms” section) departs from the mirror image rule by effectively providing that what reasonably appears to be an acceptance will be treated as such even if it states terms that are different from or additional to those stated in the offer.


CHAPTER 12 CONSIDERATION



1. F 2. T 3. F 4. T 5. F 6. F 7. T 8. T 9. F

10. T

11. c 12. c 13. d 14. a 15. b 16. d 17. c 18. a 19. d 20. c 21. b

Short Essay

22. Tom should win if he can convince the court that consideration for the promise was his giving up something he had the legal right to do (smoking.) If Tom is a minor, he cannot claim consideration because he could not legally smoke.

23. The Monroe Brothers should lose their case because there was no consideration for Douglas’s promise to pay the additional $2,500. The plaintiffs’ contract with Douglas would have contained at least an implicit (if not express) duty to construct the addition in a reasonably workmanlike manner. Obviously, the Monroe Brothers did not fulfill this duty if the walls of the addition collapsed almost immediately after the addition was completed. Therefore, when they promised to put up the walls again in return for Douglas’s promise to pay $2,500, they were really only promising to comply with their preexisting duty to construct the addition in a reasonably workmanlike manner. A promise to perform a preexisting duty cannot constitute consideration.

24. Neither italicized sentence is an accurate analysis of the facts preceding it. Haney’s promise to Lisa (set of facts A) is enforceable against him. There was consideration for his promise to employ her for a minimum six-month term, because Lisa made the promise he requested in his offer (a promise that she would work for him pursuant to the offered terms). The fact that she had not yet begun to work for him as of his June 20 letter does not mean that there was no consideration for the promise set forth in his June 16 offer. Haney’s promise to Oliver (set of facts B), however, is not enforceable. Oliver’s past legal advice—given prior to Haney’s promise of the $20,000—could not have been furnished in exchange for Haney’s promise. This is therefore a case of “past consideration,” which is not valid consideration. The fact that Haney’s promise was in writing does not eliminate the need for consideration.


CHAPTER 13 REALITY OF CONSENT



1. T

2. T

3. F

4. T

5. T

6. T

7. F

8. F

9. F

10. F

11. d

12. a

13. d

14. d

15. a

16. c

17. b

18. d

19. b

20. a

Short Essay

21. In most states, B will be able to rescind even though he did not inquire about the quality of the water, even though his failure to discover the true facts might constitute negligence. Here the facts were known to the seller, not known to the buyer, and would presumably be material to the transaction. (If this fact were not material, then B would not be able to establish all the elements of misrepresentation under breach of duty to disclose.)

22. Slickwillie’s argument is incorrect. Damages are available only for fraud and not for misrepresentation. This was a case of misrepresentation, in view of King’s good-faith and reasonably-based belief in the truth of what she said. Slickwillie’s remedy would therefore be rescission rather than damages. King’s argument is also incorrect. Her lack of scienter only means that she did not commit fraud and therefore cannot be held liable for damages. She still committed misrepresentation. This means that Slickwillie is entitled to rescission, which clearly is a form of legal relief.

23. The doctrine of mistake is different from the doctrines of misrepresentation, fraud, duress, and undue influence in that it is not particularly concerned with policing dishonest or unscrupulous conduct. Instead, the doctrine of mistake is concerned with achieving just results by releasing people from contracts resulting from a misunderstanding about a fundamental assumption on which the contract is based.


CHAPTER 14 CAPACITY TO CONTRACT



1. F

2. F

3. T

4. F

5. F

6. F

7. T

8. T

9. F

10. T

11. d

12. c

13. c

14. b

15. c

16. d

17. a

18. b

19. c

20. b

Short Essay

21. Bill cannot enforce this contract. Even though intoxication is not a defense to all contracts, in this case Steve was extremely intoxicated and Bill had reason to know that Steve didn’t understand or appreciate what he was doing because the consideration ($400) is far too little for a new Mercedez.

22. The court is likely to rule in Wheat’s favor. Even though Cognito’s mental incapacity at the time the lease was signed would have entitled her to disaffirm it, she failed to disaffirm unequivocally within a reasonable time after she regained capacity. She had ample opportunity to disaffirm within the four weeks between her regaining of capacity and the date Wheat was to obtain possession of the property, but she did not do so. Instead, she waited until two weeks after Wheat went into possession. Under the circumstances, the court is likely to hold that by failing to disaffirm within a reasonable time after regaining mental capacity, Cognito ratified the lease.

23. Courts and/or legislatures have protected adults in the following ways: by requiring minors to pay them in quasi-contract for necessaries they have already furnished to the minor; by ruling (in some states) that disaffirming minors must pay the adult the sum that would be necessary to restore the adult to the status quo if the minor cannot return the consideration in the condition in which he received it; and by holding (in some states) that a minor who misrepresents his age is estopped from asserting his minority as a defense, is required to pay the adult what is necessary to restore the adult to the status

Answers to Student Study Guide and Workbook Questions

402

CHAPTER 15 ILLEGALITY



1. F 2. F 3. T 4. T 5. F 6. T 7. F 8. F 9. F

10. T 11. F

12. d 13. a 14. b 15. b 16. a 17. d 18. c 19. c 20. a 21. d

Short Essay

22. For a contract term to be unconscionable, a court must find that it is both procedurally and substantively unconscionable. An example would be a contract entered into by a person who, because of lack of education, did not understand the terms, coupled with a term (for example, the price) which is substantively unconscionable (e.g. too high a price to be reasonable.)

23. First, the time restriction (Richard’s whole life?) seems excessive. Secondly, the same is true of the geographic restriction (the whole state?). Finally, courts tend to look with disfavor on non-competition clauses in employment contracts. And the practice of law is not a common calling.

24. Norbert cannot recover. This is an illegal wagering contract. As a general rule, neither party has a remedy for breach of such an agreement. However, the result might change if, contrary to the facts, either or both parties owned some Axial stock. In this event, the wager would not necessarily create the risk that is the subject of the deal. However, it is questionable whether all such deals would really be legal risk-shifting arrangements, so there is some uncertainty even in this case.

25. This agreement is illegal as an agreement that promotes the violation of a statute. By acquiring the weapon, Jane will come into violation of the statute, and performance of the contract obviously would facilitate that result. Both parties knew of agreement’s illegal purpose and presumably intended that purpose. The general rule is that neither party to an illegal agreement has a remedy, and that neither can recover for any performance she has made. However, one exception to this rule permits a party to an illegal contract to rescind and recover any consideration she has conveyed if she does so before performing any illegal act. Thus, Jane can get back her $250. Jim, however, has no remedy.


CHAPTER 16 WRITING



1. F 2. F 3. T 4. F 5. F 6. F 7. T 8. F 9. T

10. T 11. F 12. T

13. a 14. d 15. a 16. c 17. c 18. a 19. c 20. b 21. a 22. c 23. a 24. c

Short Essay

25. The parol evidence rule provides that when parties enter into a written contract that they intend to integrate all the terms of their agreement, a court will not permit use of evidence or prior or contemporaneous statements to add to, alter, or contradict the terms of the written contract. So if A buys a car from B, and there is no mention of a warranty in the written contract, A would be prevented from introducing evidence that the parties had orally agreed to a warranty, so long as the written contract is intended to express the agreement of the parties.

26. CSAC should argue that the parol evidence rule bars Hefty from presenting evidence of the alleged promise about 4% of the profits. The parties’ written contract was a complete integration and the alleged promise regarding the profits was a prior promise that did not appear in the written agreement. Moreover, evidence of that promise, if allowed, would add to, alter, or contradict the written contract. The parol evidence rule therefore applies, meaning that Hefty is stuck with the written contract’s terms on compensation.

27. Farm products normally are goods and here the contract price exceeds $500, so a writing is necessary under the UCC’s statute of frauds. But the contract is oral. Depending on the state, however, promissory estoppel might save Ernie. Fred obviously made a promise; Ernie substantially and detrimentally relied upon it; this reliance was foreseeable to a farmer like Fred; and it arguably is unjust not to enforce the promise (because Ernie is left holding the bag and Fred breached only to get a better price). Thus, promissory estoppel might “substitute for” the writing required by the statute of frauds. Not all states would buy this application of promissory estoppel, however, especially in cases involving the Code’s statute of frauds.


404

CHAPTER 17 RIGHTS OF THIRD PARTIES



1. F 2. F 3. T 4. F 5. T 6. F 7. F 8. F 9. F

10. F 11. T 12. T

13. a 14. c 15. a 16. c 17. b 18. b 19. d 20. a 21. d 22. a 23. d

Short Essay

24. Landlord is entitled to recover damages from Tenant for breach of the lease agreement for failure to pay rent. Unless the landlord has agreed to a novation, the Tenant remains liable under the contract. Tenant #2 may be brought into the lawsuit by Tenant as a third party defendant since Tenant #2 is presumably obligated under her agreement with Tenant to pay rent to the landlord.

25. First, the obligor is discharged if he pays the assignor before receiving notice of the assignment. Second, under the “English” rule for successive assignments, the assignee who prevails is the assignee who first gives notice to the assignor without knowledge of any other assignee’s claim.

26. Hare is liable to Smith because where the obligor wrongly performs to the assignor after receiving good notice from the assignee, the assignor holds any resulting benefits in trust for the assignee. (Maybe the same result could be reached through the assignor’s implied warranty not to impair the value of the assignment.) In this case, moreover, Dixon remains liable to Smith as well because Dixon was notified of the assignment. In the event that Hare does not perform for Smith and Dixon therefore is forced to perform twice, presumably Dixon could recover from Hare on a quasi-contractual basis.

27. It seems clear that Frank expressly agreed to assume Larson’s debt. This means that Frank is obligated to Otten because Otten is a creditor beneficiary of the Larson-Frank agreement. Because a delegation of duty normally does not extinguish the assignor’s liability to the obligee, Larson remains liable to Otten in the event that Frank fails to pay. The major exception would be a novation by Otten, but there is no evidence of that here.


CHAPTER 18 PERFORMANCE AND REMEDIES



1. T

2. F

3. F

4. F

5. F

6. F

7. F

8. F

9. F

10. F

11. T

12. T

13. a

14. d

15. d

16. b

17. b

18. c

19. a

20. d

21. c

22. b

23. e

24. d

Short Essay

25. A condition precedent is an uncertain future event whose happening creates a duty to perform. An example is “I will pay you $500 on September 1st for your car if I get my new job.” A condition subsequent is an uncertain future event whose occurrence discharges the duty to perform. An example is “I will pay you $500 on September 1st for your car unless I lose my job.” The plaintiff in a breach-of-contract suit has the burden of proving the occurrence of a condition precedent, while the defendant has the burden of proving the occurrence of a condition subsequent.

26. Because satisfactory mowing of the lawn is a constructive (or implied-in-law) condition of B’s duty to pay. The text seems to regard this condition as a condition subsequent.

27. An injunction will be ordered only if the party requesting it demonstrates that he has no adequate remedy at law (i.e., money damages would not be adequate relief) and that he will suffer an irreparable injury if the other party’s breach is not enjoined. Specific performance differs little from a mandatory injunction to perform according to the terms of the contract. But injunctive relief finds perhaps its most important contract applications in cases where the relief sought is that the defendant be prevented from doing something that would breach the contract (a negative injunction). Also, injunctive relief is possible when a breach is merely threatened.


406

28. No. Although it is true that the standard for determining whether an architect or engineer properly refused to produce a certificate is a subjective, good faith test, a failure to produce the certificate is nonetheless excused where this was due to (among other things) the insanity of the architect or engineer.

29. Y will recover $10,000, the amount stipulated by the liquidated damages provision. If such a clause is enforceable, the amount it states is the amount the plaintiff gets.

ANSWERS TO CHAPTER 1hfbus019/PDFs/CH 1_18 Answers280_14e.pdfP’s failure to counter the affirmative...

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Transcript of ANSWERS TO CHAPTER 1hfbus019/PDFs/CH 1_18 Answers280_14e.pdfP’s failure to counter the affirmative...