Business Law 150

Homework 9

Spring 2019

1. If a contract were found to be ambiguous, would you rather be the party who
wrote the contract or the party who received the contract? Why?
2. Briefly, explain the parol evidence rule?
3. What is the difference and significance of being an (a) intended beneficiary of a
contract and (b) an incidental beneficiary of a contract?
4. Under what circumstances can the rights and obligations of a contract be
assigned without the other party’s consent? When must the other party consent
before the assignment can be made?
5. If a party delegates their duties under a contract, do they still have any liability
with respect to the contract? If so, what is their liability? If not, why not?
6. Why do the court’s strictly limit the ability of parties to sue based upon a breach
of contract as a third part beneficiary?
7. Bart was a self-made millionaire who had earned his fortune by dedicated hard
work. Bart had worked so hard that he never had developed much of a social life.
Bart met Linda and fell in love with her. When Bart proposed to Linda, she told
him that she needed time before making such an important decision. Pressing
her for a favorable response, Bart telephoned Linda and promised her $100,000
if she would marry him. Linda then accepted the proposal.
Bart contracted with Quick Builders for the construction of a home Bart intended
to move into with Linda after their marriage. Construction by Quick was not very
quick because Quick was not paying subcontractors the sums that they were
owed. They, in turn, were not completing their work. To expedite matters, Bart
called the subcontractors and assured them that Bart would pay any sums that
Quick Builders did not pay if they would complete the construction.
Bart and Linda married and the subcontractors completed the work. Quick
Builders did not pay the subcontractors in full. Bart failed to pay Linda the
$100,000. Both Linda and the subcontractors sued Bart. Discuss the probable
outcome of the lawsuits.

8. Bridgette enters into an oral contract to purchase a tract of land from Bill. The
land is considered worthless, but Bridgette feels that she has discovered a
possible usage that would drastically increase the value of the land. To assure
herself of the potential value of the land, Bridgette orally hires an attorney to
investigate the title and records associated with the land in question. Before
gaining any information from her attorney, Bridgette orally contracts with a builder
 to construct a huge building on the site. Because of the size of the project, it will
take 14 months to complete the building. Bridgette now discovers that the land is
indeed useless, a fact that she obtains through information from her attorney.
Bridgette now refuses to honor her contracts with Bill, her attorney, and the
builder. Must Bridgette honor her contractual agreements?

9. Ace enters into a 3 year contract with Panasonic. The contract is in writing. The
parties agreed that Ace would pay Panasonic $145,000 for its services in the first
year of the contract and that for each subsequent year Ace would pay an
additional amount, mutually agreed to by the parties, not to exceed a 6%
increase. In t he second year, the parties could not agree to the amount of the
increase. Ace claims the contract is not enforceable in the second year because
a material term is missing, the amount it has to pay. Panasonic claims that it is
entitled to at least $145,000. You are the judge. How would you interpret the
contract? Who wins the lawsuit?