Deck 5: Nature and Classes of Contracts

Question 1

What provision does the law allow if a party to a contract fails or refuses to perform it?

Answer 1

When a party fails to perform the obligations assumed under a contract, it is termed as breach of contract.
In such an instance of failure or refusal to perform, the law allows the other party to take an appropriate action to obtain the damages so caused, or to enforce performance by the party breaking the contract.

Question 2

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
By letters, the Twin Buttes School District had hired Cheryle Good Bird to be the elementary school head cook for two different school years. Each letter specifically set the term of employment as one school year. Before the first contract had expired, Good Bird had received a letter telling her she had been chosen to be the head cook specifically for the next school year. During the second contract period, the principal, by letter, told Good Bird the head cook position for the next school year was going to be advertised, but that she could apply for it. Good Bird reapplied but was not hired. Good Bird sued the school district, claiming it had breached an implied contract. Did Good Bird have an implied contract to continue to be the head cook?

Answer 2

No. Both the parties submitted affidavits, and other important documents, in support of summary judgment.
The letters sent by the Company S's business manager, clearly indicated Company G's employment was only for the period of one school year. The Company S again hired Company G for the next school year after a similar letter was sent to Company G.
Further, the principal of School T she sent another letter to Company G informing that the head cook position for the next school year would be advertised, and that Company G could also apply for the position.
However, Company G failed to provide the court with the proof of contractual right to continue employment. There was no legal obligation created between the parties.
An implied contract is one in which the rights and obligations are manifested by conduct, though not expressed. The review of all circumstances and the parties' conduct pertaining to Company G's employment with the Company S indicates that there was not an implied contract between the parties.

Question 3

What is a contract?

Answer 3

A legally enforceable agreement between two or more competent persons is a contract.

Question 4

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
ICG Link Inc. (ICG) maintained and serviced the website needs of TN Sports, LLC (TN). Greg Jones, ICG's developer and programmer who serviced TN's website, recommended a new website be built. He e-mailed a price quote for a new website to Philip Steen, who managed TN. The "quote" listed about 30 features to be included, the hours for each, and an hourly rate of $85. The total cost was $12,622. Steen liked the quote, and Jones started working on the new site. Although not finished, five months later the site was launched. Immediately there were problems with it. Four months later, TN stopped working with ICG. TN had not paid ICG for the new site or maintenance for seven months, so ICG sued alleging a quasi contract. Was there a quasi contract?

Question 5

How does a contract differ from an agreement?

Question 6

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Uhrhahn Construction prepared proposals for work on construction projects for Lamar and Joan Hopkins. The Hopkinses signed the proposals for each project under sections titled "Acceptance of Proposal." The proposals stated that any changes to the written estimates and specifications had to be in writing. During the construction, the Hopkinses made several oral requests for additional work not included in the proposals. They paid for some of them after receiving invoices labeled "change orders" for such work. When they did not pay for the rest, Uhrhahn sued, alleging there was an implied contract to make oral changes. Was there such an implied contract?

Question 7

Would an agreement to launder money be considered an unenforceable contract or void? Why?

Question 8

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Wendell Lund worked on his parents' farm, maintaining equipment, providing labor and supplies, and paying a portion of real estate taxes on the property. His parents, Orville and Betty Lund, let Wendell live on the farm and provided meals to him free of charge. The Lunds also provided Wendell assistance with the yard work. Wendell Lund's siblings helped the Lunds with farm work as well. After Orville and Betty Lund divorced and divided their property, Wendell claimed that his parents had been unjustly enriched by his years of labor. He sued his mother for $545,000 and his father for ownership of the family farm. Was there an implied in law contract between Wendell and his parents?

Question 9

What two items must be expressed in order to have an express contract?

Question 10

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Nina Parkhurst owned a ranch and asked her son, Doug Boykin, to move to it and manage it for her. Boykin and his wife moved to the ranch and managed it for several years. They talked with Parkhurst many times, urging her to transfer 49 percent of the ranch to them. Parkhurst said she had thought and talked about possibly transferring the ranch but had made no decision. The Boykins claimed they were on the ranch under an oral contract with Parkhurst and that the oral contract also entitled them to a 49 percent interest in the ranch. She sued them and asked the court to declare that there was no contract. Was there a contract?

Question 11

How must a sealed contract be executed?

Question 12

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Attorney Mark Davis sought the services of a professional translator to translate an audio recording of his client as part of a divorce proceeding. Davis's office contacted Norma Chaparro and asked her to perform the services. Chaparro had previously translated documents for Davis, and her typical arrangement was to invoice and be paid by Davis for the services. Chaparro told Davis's office she could translate the tape but could not provide a quote for the services until she had examined the tape. After Chaparro assessed the tape, Davis's office was informed that the transcription would exceed 50 pages. The staff instructed Chaparro to do whatever necessary to finish the transcription. After delivering the completed transcription to Davis, Chaparro presented an invoice of $1,500 for her services. Davis refused to pay, stating that he had never promised to pay Chaparro and that she should seek payment from his client instead. Chaparro sued Davis, claiming that she had contracted with him, not his client, and that he had breached their contract by refusing to pay her. Did Davis breach an implied in fact contract with Chaparro?

Question 13

What is a recognizance?

Question 14

Why are most business contracts written rather than oral?

Question 15

When does an executory contract become an executed contract?

Question 16

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
While shopping at Home Depot (HD), Carl Murphy cut his thumb, requiring 12 stitches. HD paid this medical bill, but the cut developed a staph infection, and Murphy claimed he lost $3,500 in medical bills and lost wages. Murphy sued HD. His lawyer wrote HD and offered to settle for $7,500. HD's lawyer offered $7,247 representing $7,500 minus HD's previous medical payment. Murphy's lawyer sent a proposed release to HD's lawyer covering "all losses... directly resulting from this incident. My release does not include any other claims." HD's lawyer sent back a new release with much broader language which Murphy's lawyer refused. No settlement was signed, and Murphy received no further payment. HD then asked the court to enforce the settlement agreement it said Murphy's lawyer had agreed to in the correspondence with HD's lawyer. Had a binding agreement been made?

Question 17

Why do courts sometimes impose a quasi contract on parties?