Completed on Monday, 23 September 2019, 0:28 PM

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Grade 15.00 out of 17.00 (88%)

Question 1
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On April 1, Sy, the owner of a very well known art gallery, had the following telephone conversation
with Bob, one of his most valued customers: Sy: Bob, I just procured "The Blue City" by Chagall. I
know it would go nicely with your collection and I will let you have it for $25,000. Bob:I'm tempted,
but I couldn't begin thinking about making such a purchase until my CD matures at the end of July.
Sy:For you, my friend, I will hold my offer open until August 10. The best description of Bob's right to
purchase the Chagall is:
Select one:
A. Bob has a firm offer to purchase the Chagall for $25,000 until August 10.
B. Bob has a power to purchase the Chagall for $25,000 until August 10, but that power is revocable

by Sy. 
C. Bob has an irrevocable right to purchase the Chagall for $25,000 until August 10.
D. Bob has an option contract to purchase the Chagall for $25,000 until August 10, and that power
is revocable by Sy.

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The correct answer is B.  The question is testing termination of an offer.  Once there is an offer, the
offeror can revoke the offer prior to timely acceptance.   Based on the facts Sy offered to sell Bob the
Blue City painting for $25,000.  He promised he would keep the offer open until August 10.    Sy did
create an offer.  Generally an offer is only open for a reasonable period of time.  However, Sy stated
he would keep the offer open until August 10.  The only way to terminate the offer is if there is a
revocation by Sy prior to Bob’s acceptance.  A is incorrect since there is no firm offer created.  In
order to find a firm offer you need to show that the offeror is a merchant, the offer is in writing and
need assurance to keep the offer open for a reasonable time not to exceed 90 days.   Sy is a
merchant.  However, the firm offer must be in writing, and based on the facts Sy called Bob, thus,
there is no writing.  In addition the assurance was from April 1 to August 10 which would be beyond
the 90 day period.   Therefore, there was no firm offer created.  C is incorrect since the offer is
revocable any time prior to timely acceptance.   If an option contract was created then the offer
would not be revocable until the expiration of the option contract.   Based on the facts Sy told Bob
the offer would be open until August 10, thus a stated period.  However, in order to find a valid
option contract it needs to be supported by consideration.  Bob did not provide any consideration.  
Therefore, no option contract was created.  D is incorrect, as stated above, since no option contract
was created.
The correct answer is: Bob has a power to purchase the Chagall for $25,000 until August 10, but
that power is revocable by Sy.

Question 2
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For many years Meow, a supplier of cat food, had accepted orders for cat food from Frisky, the
owner of a pet store, over the phone. One day, Frisky telephoned Meow and ordered 144 cases of
cat food, priced at $20.00 per case, to be delivered to his store at a rate of 12 cases per month
starting January 1. On January 1, Meow delivered 12 cases. Frisky learned about another vendor
who would sell the same cat food for $18.00 a case. Once Frisky learned of this he notified Meow by
letter. The letter stated "Your prices are too high. I will not be taking the remaining 136 cases.
Signed Frisky."

Meow files a suit for the remainder of the contract. The court should find for:
Select one:

A. Meow, because Frisky sent a note cancelling the contract. 

B. Meow, because Frisky received part performance.
C. Frisky, since the contract was not in writing.
D. Frisky, since the contract was in executory stages.

Feedback
A is correct.  An installment contract is a contract created with terms explicitly requiring delivery in
separate lots. Meow and Frisky created an installment contract due to the fact that Frisky contracted
for 144 cases of cat food and required delivery to be 12 cases per month to start January 1.  The
general rule is installment contracts are not divisible.  If one of the parties breaches the contract prior
to full performance the party can sue under the entire contract and receive the contractual amount.
Frisky sent a note to Meow stating “I will not be taking the remaining 136 cases.” Frisky repudiated
the contract, placing him in breach.  Meow can sue for the remaining 136 cans of cat food for
damages.     Since answer A supports that Frisky repudiated the contract establishing a breach,
Meow can sue under the terms of the contract.  B is incorrect because part performance does not
excuse a party since the contract is not divisible.  C is incorrect because the contract can be taken
out of the purview of the Statute of Frauds, since there has been part performance.  D is incorrect
since the contract is not in executory stages.  Meow and Frisky have each started performed under
the terms of the contract.
The correct answer is: Meow, because Frisky sent a note cancelling the contract.
Question 3
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Cal Construction entered into a contract with Grocer to build a grocery store. The parties entered
into a contract for the agreed price of $100,000 and construction was to be complete within six
months. During construction a dispute arose between Cal Construction and Grocer due to the
unexpected increase in the cost of lumber. Cal Construction and Grocer entered into a written
agreement that Grocer would pay the $5,000 increase in cost for the lumber. When Cal Construction
completed the grocery store Grocer only paid $100,000 and refuses to pay the remaining $5,000
stating that he does not owe the money. The court will find a judgment for:
Select one:
A. Grocer, because the modification was not valid.

B. Grocer, because Cal Construction had a pre-existing duty. 

C. Cal Construction, because the modification was put into a writing.
D. Cal Construction, because the agreement between the parties created a novation.

Feedback
B is correct.  A modification of a contract requires mutual assent and consideration.  Cal
Construction and Grocer entered into a contract to build a grocery store for $100,000.  During
construction there was an unexpected increase in lumber cost.  Cal Construction and Grocer
entered into a written agreement that Grocer would pay an additional $5,000 for the increase in the
lumber.   Since both parties agreed there was mutual assent.  However, Cal Construction has not
given anything in exchange for Grocery’s promise to pay the $5,000.  Cal Construction has a duty to
build the Grocery Store for $100,000 under the terms of the contract, thus Cal Construction is under
a pre-existing duty to perform.  Absent consideration the modification is not valid, hence, A is not the
best answer.  Because the modification was not valid, and answer B has the element of the
modification that is being tested i.e. the pre-existing duty rule, B is the best answer.   Based on the
facts the modification fails for lack of consideration since Cal Construction had a pre-existing duty.
Since this answer has the specific element it would be a better answer.    C is not correct since the
modification is not valid the Statute of Frauds would not be applicable under these facts.   A novation
is where the parties agree to substitute in a new party under the contract.  D is incorrect since there
is no substituted party.
The correct answer is: Grocer, because Cal Construction had a pre-existing duty.

Question 4
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Builder enters into a written agreement with Homer to build a 4 bedroom, single family residence for
the cost of $125,000, completion on or before December 1. Builder commenced construction of the
residence. Homer was getting anxious to get into his new home. On October 1st Homer notified
Builder and informs him that if he completes the house by November 15, he will pay him an
additional $5,000. Builder completed the house by November 15. Homer pays Builder the $125,000
and refuses to pay the additional $5,000. Builder brings an action against Homer for the outstanding
balance of $5,000. The court will find for:
Select one:
A. Homer, because the modification lacked consideration.
B. Homer, because the modification was not in writing violating the Statute of Frauds.

C. Builder, because he relied on Homer's oral promise to his detriment. 

D. Builder, because the contract does not fall within the Statute of Frauds.

Feedback
C is correct.  A modification requires mutual assent and consideration.   Although the parties did
agree to the change in the completion date, Builder relied on Homer’s promise based on his conduct
to get the home completed prior to the contracted date of December 1.  Since the facts show
reliance, that is a substitute for consideration.  Therefore, a modification was created and is valid.  A
is incorrect for the reasons stated above.  B is incorrect since the original contract does not fall within
the Statute of Frauds.  D is incorrect since the Statute of Frauds does not apply.
The correct answer is: Builder, because he relied on Homer's oral promise to his detriment.

Question 5
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On June 1, 1994, Owner signed a contract with Ace Painting to paint the exterior of Owner's house
by September 1, 1994 for a contract price of $5,700. On July 1, Ace called Owner and stated that
"My foreman made a mistake in adding the figures. I can't possibly do the work for less than
$6,200.00 or I will lose money." Owner responds by stating "I'll pay the extra money but only if you
paint all of the planter boxes and the front yard fence. Ace agrees. Ace completes the house, the
planter boxes and the front yard fence on August 30. Owner tenders $5,700, and refuses to pay the
additional $500. If Ace brings suit who will prevail?
Select one:

A. Ace, because there was a valid modification of the contract. 

B. Ace, because he detrimentally relied on Owner's promise.
C. Owner, because the contract was not in writing.
D. Owner, because Ace was under a pre-existing duty.

Feedback
A is correct.  A modification requires mutual assent and consideration.   Owner and Ace did agree to
an increase in the contract amount for the painting of Owners house, thus mutual assent.  Further,
since Owner agreed to pay $6,200 versus the original amount of $5,700 and in exchange Ace
agreed to paint in addition to the house Owners planter boxes, and front yard fence, there was
consideration.  Both parties have given something that they were not previously obligated to do.
Therefore, the modification is valid and enforceable.  B is incorrect since there are no facts to show
Ace did rely.  C is incorrect since the contract does not fall within the purview of the Statute of
Frauds, requiring a writing.  D is incorrect since both parties gave new consideration.
The correct answer is: Ace, because there was a valid modification of the contract.

Question 6
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After his female poodle Fife had won her tenth consecutive win in a world renowned Dog Show,
Harold was approached by a number of people who were interested in buying puppies from Fife's
litter. Calvin entered into an agreement with Harold. The agreement stated that Calvin shall be
entitled to purchase the pick of the litter from the next litter born to Fife. Fife's next litter came and
Calvin examined the litter, and selected a pup. Knowing that pups of this type of breed sell from
$500 to $3,000, Calvin tendered a check to Harold for $3,000. Harold refuses to sell the pup for less
than $7,500. If Calvin brings an action and Harold defends on the grounds of Statute of Frauds the
court will find for:
Select one:

A. Calvin, because the writing executed is enforceable. 

B. Calvin, because the contract does not fall within the Statute of Frauds.
C. Harold, because the contract is not enforceable absent a price term.
D. Harold, because Calvin's tender of the $3,000 did not satisfy the Statute of Frauds.

Feedback
A is correct.     Since the contract is for the sale of good for over $500 or more, evident by the fact
that Calvin tendered $3,000 to Harold and the contract was in writing the Statute of Frauds is
satisfied.  B is incorrect since this is a contract for the sale of good over $500 or more.  C is incorrect
since most courts will find the offer to be valid since the offer was definite to the material terms and
that the promises and performance by each party were reasonably certain.  Since Calvin and Harold
entered into a written agreement for the purchase of the pick of the litter of poodles and Calvin
entered into the agreement knowing that this type of breed sales for $500 to $3,000 the offer would
be definite and certain in terms, and the parties did agree in writing, thus a valid contract was
formed.  D is incorrect.  Although the fact that there was a tender of the money, shows part
performance, an exception to the Statute of frauds, the contract was in writing, the Statute of Frauds
is not at issue under these facts.
The correct answer is: Calvin, because the writing executed is enforceable.

Question 7
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Sally owned two adjoining parcels of land. She entered into negotiations to sell her west lot to Bob,
who was looking for a good location for his new carpet store. On Sally's adjoining east lot were a
large billboard that would obscure the view of Bob's carpet store, a partially collapsed abandoned
greenhouse, and several abandoned cars and old tires. After Sally and Bob agreed on a price for the
west lot, they signed a valid standard real estate sales contract. In a blank space at the end of the
contract under the caption, "Other Terms," were the handwritten words, "Sally to clear debris from
adjoining east lot." The standard contract also contained a clause, "This contract represents the
entire agreement of the parties. There are no additional representations, promises or conditions
precedent to the effectiveness of this agreement." According to Bob, Sally had promised during their
negotiations that she would remove the billboard, the greenhouse, the cars and the tires from the
adjoining east lot if Bob agreed to purchase the west lot.

By the date for the closing of the sale, Sally had not yet done any work on the adjoining east lot,
although she told Bob that she fully intended to do everything she had promised. The parties
exchanged the purchase price and a deed to the west lot. The following week, Sally had the
abandoned cars and old tires removed from the adjoining east lot. When Bob asked her about the
removal of the billboard and the greenhouse, Sally denied having made any commitment to remove
the billboard, which she said brings in substantial rental income from advertisers or to remove the
greenhouse, which she indicated she hoped to repair and reopen some day.

Bob would like to obtain a court order directing Sally to remove the billboard and greenhouse. Bob
would like to testify about the previous agreement between him and Sally prior to signing the
contract. The court will:
Select one:
A. Admit the testimony, because of trade usage.

B. Admit the testimony, because there was a mistake between the parties. 
C. Not admit the testimony because it would change or alter the terms of the agreement.
D. Not admit the testimony because the contract was fully integrated.

Feedback
B is correct.  The Parol Evidence Rule provides that when parties have placed their agreement into a
writing, which they both agree and assent to as their full and complete integrated agreement,
evidence of oral or written terms will not be admitted to change or vary the terms of the writing.
However, there is an exception where the court will allow in extrinsic evidence if there was a
mistake.  Based on the facts Bob agreed to purchase the lot upon Sally agreeing to remove the
billboard and greenhouse from the adjoining lot.  The term in the contract states for Sally to clear
debris from adjoining lot.  Hence, the court will allow evidence in order to interpret the agreement
since there was a mistake at the time of making the contract.  A is incorrect, since Sally or Bob are
not in the trade.   C and D are not correct since there is an exception to the Parol Evidence Rule.
The correct answer is: Admit the testimony, because there was a mistake between the parties.

Question 8
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Landlord owned a retail shopping center in which Tenant wanted to establish a fast food hamburger
restaurant. Her plan was to market the hamburgers heavily among the other tenants in the shopping
center. Tenant did not believe there was enough demand in the shopping center to support two
hamburger restaurants. In their negotiations, she and Landlord orally agreed that Tenant would have
an exclusive right to sell hamburgers in the shopping center. Unfortunately Landlord forgot to include
the exclusive sales provision in the written lease, which contained a merger and integration clause.
Tenant signed the lease without reading it and she assumed that Landlord had included the
exclusive provision condition. 

Tenant opened her hamburger restaurant, which was an immediate success. The restaurant proved
to be quite profitable. Six months later, Landlord rented an adjacent space to a fast food restaurant
named McDaisey. McDaisey began selling a hamburger meal deal priced considerably below the
price Tenant was charging. This caused a significant drop in the business for Tenant. If Tenant
asserts a claim for damages against Landlord, the oral agreement concerning the exclusive right
given Tenant to sell hamburgers in the shopping center:
Select one:
A. Would be excluded by the parol evidence rule.
B. Would be excluded by the merger and integration clause.
C. Would be excluded because the negotiations occurred before the lease was signed.

D. Would not be excluded since there was a mistake in the formation of the written contract. 

Feedback
D is correct.  The Parol Evidence Rule provides that when parties have placed their agreement into
a writing, which they both agree and assent to as their full and complete integrated agreement,
evidence of oral or written terms will not be admitted to change or vary the terms of the writing.
However, a mistake in the formation of the contact is an exception to the rule.  Based on the facts
Landlord and Tenant orally agreed that Tenant would have an exclusive right to sell hamburgers in
the shopping center.  Landlord forgot to place the agreement in the written lease.  The court will
allow Tenant to testify to the agreement since there was a mistake in forming the written contract.
Hence, the court will allow evidence in order to interpret the agreement since there was a mistake in
the making of the contract.  A, B and C are incorrect, for the reasons stated above.
The correct answer is: Would not be excluded since there was a mistake in the formation of the
written contract.

Question 9
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Barbara wanted to sell her home and decided to run an advertisement in the local newspaper. Her
neighbor, Trump, had always wanted to buy Barbara's home. Trump, without being aware of the
pending advertisement signed and posted a letter offering to pay Barbara $150,000 for the house.
The next day Barbara wrote Trump stating that she had the house for sale for $150,000. Was a valid
contract formed between Barbara and Trump?
Select one:
A. No, because the statute of frauds requires both parties to a property transaction must sign the
same writing.

B. No, because there was no acceptance. 

C. Yes, because Trump's letter constituted acceptance of the offer contained within the newspaper
advertisement.
D. Yes, because Barbara's letter constituted acceptance of the offer contained within Trump's letter.

Feedback
B is the correct answer.  An acceptance is an unequivocal assent to the terms of the offer.  When
Trump sent Barbara a letter offering to buy her home, since he was unaware of the advertisement,
Trumps letter created an offer.  When Barbara wrote back stating she had the house for sale for
$150,000, her letter didn’t assent to the terms of Trump’s offer.  Thus, B is correct.   A is incorrect
since you can show there was no contract formed.  I.e. Making B a better answer choice since the
answer establishes there was no formation of a contract.  C is not correct since Trump was not
aware of the advertisement.  D is incorrect for reasons stated why B is correct.
The correct answer is: No, because there was no acceptance.

Question 10
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Bill owns and operates a carpet cleaning business. Two months ago he posted an undated flier on
the notice board of a local supermarket. The flier read: Bill's QUALITY CARPET CLEANING One
week special! Carpets cleaned for $1.00 a square yard. You can beat a carpet, but you can't beat
our price! Call Bill at CARPETS (227 7387) Kennedy, a lawyer, saw the flier and telephoned Bill, and
during their conversation they agreed that Bill would clean the carpet at Kennedy's office every six
months for the next five years or for as long as Kennedy remained in practice. Kennedy then learned
that several other carpet cleaners would do the work for less than the price on which she and Bill
had agreed. Right after Bill finished the second six-month cleaning, Kennedy told Bill she no longer
required his services. Bill brings an action against Kennedy for breach of contract. Kennedy asserts
the Statute of Frauds as a defense. The court will find for:
Select one:
A. Kennedy, since the contract was not in writing.
B. Kennedy, since the price for cleaning can be found at a better price.
C. Bill, since the contract is for service.

D. Bill, since the contract could be performed within one year. 

Feedback
D is correct.  The Statute of Frauds requires contracts which by the terms are not performable within
one year of the making thereof to be in writing.  Bill contracted with Kenny for carpet cleaning service
every six months for the next five years.  But in the agreement it stated or as long as Kennedy
remained in practice.   Kenny could leave his practice in the next month.  Thus, since the contract
could be performed within a year, it does not need to be in writing.  A is incorrect since the contract
does not need to be in writing since it can be performed within one year.   B is not correct, as finding
a better price is not a valid defense to a contract.   C is not correct because a service contract could
require a writing if not performable within one year.
The correct answer is: Bill, since the contract could be performed within one year.

Question 11
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Dolly makes and sells unique dolls dressed in colonial clothing she has designed and hand sewn.
On December 15, Dolly mailed the following signed letter to Pat who owns a local gift store: "I will
supply you with as many of my colonial dolls as you order during the next calendar year, not to
exceed 10 dolls a month, at a price of $50 each, payment due 30 days after delivery. I guarantee
that the price will not be increased during the year." Pat was familiar with Dolly's colonial dolls and
had sold some of them in her store. She replied on December 20 by mailing a signed letter which
said only "I accept your offer of December 15." Pat immediately planned and paid for advertising
announcing that ten of Dolly's dolls would be available each month beginning in January for sale to
the first ten customers. On January 5, Pat ordered ten dolls. Dolly filled the order on that same day,
delivering the dolls to Pat with an invoice, billing the dolls at $60 each. Dolly enclosed a letter that
said: "Since I wrote to you, there has been an increase in the cost of the materials I use, and I must
increase my prices for this order and all future orders to $60 per doll." Pat accepted the dolls, but
objected to the price increase in a letter sent to Dolly the day the dolls were received. Dolly brings an
action against Pat to collect the remaining $10 per doll. The court will find for:
Select one:
A. Pat, since a contract was formed for $50.00 a doll when the dolls where delivered.

B. Pat, since she sent a signed letter which said only "I accept your offer of December 15." 
C. Dolly, since she included in the billing a notice of the increase price.
D. Pat, because the contract violates the Statute of Frauds.

Feedback
B is correct.   A contract requires an offer, acceptance and consideration. When Pat sent Dolly a
signed letter accepting her offer of December 15th a contract was formed.    A is incorrect since a
contract was formed at the time Pat sent a signed letter.  C is not correct since a contract was
created for $50 per doll.  D is not correct as performance will take the contract outside the statute if
frauds.
The correct answer is: Pat, since she sent a signed letter which said only "I accept your offer of
December 15."

Question 12
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Seamstress was hired by Bride to make a wedding dress for $500. Once the dress was complete
Bride picked up the dress and took it home. When Bride went to try it on to see if any final alterations
were needed she believed in good faith that the Queen Ann collar was not finished properly on the
dress. When Seamstress asked for payment Bride refused to pay Seamstress for the dress until the
collar was re-worked. Seamstress then sent a letter to Bride asking her for payment for the dress. In
the letter Seamstress emphasized that she needed the money badly since her husband was
undergoing an operation. Bride still believing that the collar was not done right wrote Seamstress, "I
would like to settle this matter prior to my wedding. I will pay you $300 only if you rework the collar
on the dress" and Bride enclosed a check for the $300. Seamstress received the letter and cashed
the check. Seamstress has refused to re-work the collar and Bride had no alternative but to get
married in the dress with the unsatisfactory collar. Bride brings an action against Seamstress. Bride
contends that there was a valid modification. The court will find for:
Select one:
A. Seamstress, because there was no new consideration.

B. Seamstress, because the agreement was not in writing. 

C. Bride, because her letter was a counter offer and when Seamstress cashed the check she
accepted the counter offer.
D. Bride, because Seamstress cashed the check.

Feedback
A is correct.  Bride was under a pre-existing duty to pay Seamstress $500 for the alterations to her
wedding gown.  Although Bride was unhappy with the collar and in good faith believed it to be done
incorrectly, she wrote to Seamstress telling her she wanted to settle the matter and would pay her
$300 only if she re-worked the collar on the wedding dress.  Bride is changing the terms of the
contract from $500 to $300 for the alteration work.   Seamstress did not agree thus, there was no
mutual assent.  Further, a modification to a contract requires consideration.  Bride has not given any
new consideration, rather she reducing what she previous agreed to pay for the alternations.     B is
incorrect since the statute of frauds would not apply.  C is incorrect since a contract had been
formed prior to Bride sending her letter and the $300 check.  D is not correct as there is no
statement on the check to show an accord and satisfaction took place.
The correct answer is: Seamstress, because there was no new consideration.

Question 13
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Although they were identical twins Zack and Cody were quite opposite. Cody was able to save and
earn enough money to buy himself a new Toyota Rava. Cody loved his car and one day drove his
car to the mall. Zack was quite jealous of Cody. One day while loitering at the mall Zack noticed a
new Toyota Rava in the parking lot. This reminded him of his brother, Cody. Unknown to Zack, the
car was Cody's. Zack decided to enjoy the ride of a new car and hot-wired the car and sped out of
the parking lot. Zack was driving at a high rate of speed, running lights and not paying attention to
other motorists on the road. At the next intersection Zack raced across the intersection and collided
into another car driven by Granny. Granny was injured. Believing he was responsible for the
accident since it was his car, Cody told Granny "I promise to be responsible for all your medical bills
related to the accident." If Granny brings an action to enforce Cody's promise, his best defense
would be:
Select one:
A. Mistake of fact.
B. Statute of Frauds.

C. Lack of consideration. 
D. Estopple.

Feedback
C is the best answer.  The general rule is a donative promise is unenforceable because it lacks
consideration.   When Cody promised Granny he would be responsible for her medical bills, Granny
did not provide any consideration.   Cody’s statement was intended to confer a gift to Granny.  
Thus, Cody made a donative promise and the agreement is not enforceable.   A, B, and D are
incorrect for the reasons stated above.
The correct answer is: Lack of consideration.

Question 14
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Thomas, a nationwide distributor of Apple computers, phones Colt and agrees that he will sell one
thousand 15 inch Mac book pro computers to Colt, a retailer, for $1200 each - delivery by August 1.
Colt states that he will think about it. Colt then sends a confirmation e-mail to Thomas, signed by
Colt stating the price of $1200. Thomas received the e-mail and informs Colt that he will not perform,
due to the increase in cost. Colt sues Thomas for breach of contract. The court will find for:
Select one:
A. Thomas, because the agreement violates the Statute of Frauds.
B. Thomas, because although there was a writing it was not signed by the party to be charged.

C. Colt, because the e-mail was a written confirmation satisfying the Statute of Frauds. 
D. Colt, because he relied on Thomas' promise to sell one thousand 15 inch Mac book pro
computers to Colt for $1200 each.

Feedback
C is correct.  When an offer does not state a specific period of time which the offer will remain open
the offeree’s power of acceptance expires within a reasonable period of time.   Colt stated to
Thomas he would think about the offer, and then he sent a confirmation email to Thomas accepting
the offer, thus, a contract was formed.  However, the contract is not in a complete writing.  Since the
contract between Thomas and Colt deals with the sale of good over $500 or more the contract
needs to be in writing.  Under the U.C.C.  a written confirmation is an exception to the Statute of
Frauds.  When Colt sent Thomas the email confirming that he accepts the offer, the email will take
the contract outside the purview of the Statute of Frauds making the contract enforceable.   A is
incorrect for the reasons stated above.  B is not correct, since the answer supports a sufficient
memorandum which did not occur under these facts.  D is incorrect as the facts do not support
reliance by Colt.
The correct answer is: Colt, because the e-mail was a written confirmation satisfying the Statute of
Frauds.

Question 15
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Pianist orally agrees to sell her piano to Player for $5,500. Pianist explained to Player that she was
only interested in selling her piano to Player if she gets the New York City townhome that she has
placed a bid on. For that reason the parties agreed that the transaction would not take effect unless
Pianist gets the townhome. Several weeks lapse, Pianist and Player put their agreement into writing.
However, the writing made no mention that the sale was contingent upon Pianist getting the
townhome in New York City. In an action by Player to enforce the written agreement, how should the
court rule on Pianist's proof that she did not get the townhome in New York City?
Select one:
A. The evidence is barred because the oral agreement contradicts the terms of the written
agreement.
B. The evidence is barred because of the Statute of Frauds.
C. The evidence is admissible because the final writing was not a full integration of Pianist and

Player's agreement. 
D. The evidence is admissible because the parties were under a mistake.

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C is correct.   The parol evidence rule is a rule of substantive contract law which bars evidence of
any prior oral or written contemporaneous oral agreements to alter, vary, or contradict the terms of a
writing, once the parties have expressed in writing their full and final agreement.  Restatement of
Contracts, 2d, Section 213 states that “(1) A binding integrated agreement discharges prior
agreements to the extent that it is inconsistent with them.  (2) A binding completely integrated
agreement discharges prior agreements to the extent that they are within its scope.”  The key issue
in a parol evidence problem is to determine whether the agreement is completely or partially
integrated.  Where there is complete integration (i.e., a full and final expression of the parties such
that the writing appears complete on its face) no extrinsic evidence is permitted.  Painist would argue
since the contract made no reference to the agreement that the purchase of the piano was
contingent on her getting the Townhouse,” this made the contract incomplete and not integrated.
Therefore, parol evidence will be admitted to vary or contradict the express terms. A and D are
incorrect based on the reasons stated above.  B is incorrect since the agreement was in writing
satisfying the statute of frauds.
The correct answer is: The evidence is admissible because the final writing was not a full integration
of Pianist and Player's agreement.

Question 16
Correct
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On June 1, 1994, Owner signed a contract with Ace Painting to paint the exterior of Owner's house
by September 1, for a contract price of $5,700. On July 1, Ace called Owner and stated that "My
foreman made a mistake in adding the figures. I can't possibly do the work for less than $$6,200, or I
will lose money." If Owner brings an action against Ace for breach of contract, who will prevail?
Select one:
A. Ace, because he has not started the painting.
B. Ace, because of the defense of mistake.

C. Owner, but only if he was not aware of the mistake. 

D. Owner, unless he can find another painter for less.

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C is correct.  Ordinarily, a unilateral mistake does not excuse performance and is not grounds for
rescission. Where the other party knew or reasonably should have known of the mistake, however,
the mistake may be asserted as an excuse for non-performance.  However, if Owner had no reason
to know of the mistake in the calculation of the bid, the contract will be enforced.   A is incorrect
since this is a bilateral contract and performance to accept is not required.  B is incorrect for the
reasons stated in C.  D is incorrect as Owner is under no duty to mitigate his damages by finding
another painter.
The correct answer is: Owner, but only if he was not aware of the mistake.

Question 17
Incorrect
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Elle and Irwin own and operate a unique specialty liquor store by the name of Vie. In January Elle
orally agreed with Chuck's wine import to buy a specific red wine at 15% below the wine vineyard
price. Chuck sent a confirming e-mail that Elle never received. In February Elle and Irwin were not
getting along and having many disagreements about how to run the business. Elle decided she
wanted out of the business and assigned all of her rights in Vie to Irwin. Irwin, in exchange, agreed
to be solely liable for all of Vie's business obligations. Chuck was given notice of the assignment. In
June Chuck sent an invoice showing $12,000 owing. Irwin sent a check to Chuck in the amount of
$10,200, marked "payment in full." Irwin also enclosed a letter stating that Chuck had not deducted
the 15% discount. Chuck wrote back demanding the remaining $1,800 and further stated that the
15% agreement was invalid because Elle left the business. Irwin refuses to pay any additional
money. Chuck files suit against Vie. Irwin's best defense would be?
Select one:
A. When Elle assigned her rights a novation occurred.

B. Irwin relied on the agreement based on promissory estopple. 

C. There was an implied novation.
D. The check was an accord and Chuck's cashing of the check was a satisfaction.

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D is the best argument.    An accord is an agreement by which a new obligation is imposed on one
of the parties to a contract in place of one which the contract originally created. Under the facts the
argument would be that a contract was created for wine at a stated price. However, in good faith
Irwin believed that the price was to be reduced by 15%.   Hence, the dispute of the amount owed is
the accord.  The satisfaction occurs when the party on whom that obligation was imposed fulfills it. A
party who satisfies the new obligation imposed upon him as a result of the accord is discharged from
the performance of the original obligation for which the new one was substituted. Since Irwin sent
Chuck a check marked payment in full and Chuck accepting the check this resulted in a new
obligation making an accord.  A, B and C are incorrect for the reasons stated above.
The correct answer is: The check was an accord and Chuck's cashing of the check was a
satisfaction.