Business Law and the Legal Environment Study Set 1

Business

Quiz 17 :

Writing, Electronic Forms, and Interpretation of Contracts

Quiz 17 :

Writing, Electronic Forms, and Interpretation of Contracts

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Louise Pulsifer owned a farm that she wanted to sell and ran an ad in the local newspaper. After Russell Gillespie agreed to purchase the farm, Pulsifer wrote him a letter stating that she would not sell it. He sued her to enforce the contract, and she raised the defense of the statute of frauds. The letter she had signed did not contain any of the terms of the sale. Gillespie, however, claimed that the newspaper ad could be combined with her letter to satisfy the statute of frauds. Was he correct? [Gillespie v Pulsifer, 655 SW2d 123 (Mo)]
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Answer:

Refer to the case Gillespie v Pulsifer (655 SW2d 123).
Facts
1) Plaintiff was a prospective buyer of defendant's property.
2) Defendant placed an advertisement to sell property. Plaintiff initially made a down payment which was returned by defendant after some arguments regarding the sale.
3) Plaintiff sued for specific performance
4) District court held for defendant
Relevant Terms, Laws, and Cases
Statute of fraud requires that certain agreements, such as sale of real estate, to be written and signed in order to be binding. Not all agreements may be enforced especially those lacking sufficient details, such as for sales, unit purchased, item to be purchased, payment terms etc.
Opinion
Appeals court affirmed the decision.
No contract was ever made for the sale of the farm. There was a disagreement with the price. Plaintiff claimed advertisement may represent evidence for the purchase terms but this is rejected by the court as it was not referred to in writing between plaintiff and defendant

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Integrated, Inc., entered into a contract with the state of California to construct a building. It then subcontracted the electrical work to Alec Fergusson Electrical Contractors. The subcontract was a printed form with blanks filled in by typewriting. The printed payment clause required Integrated to pay Fergusson on the 15th day of the month following the submission of invoices by Fergusson. The typewritten part of the contract required Integrated to pay Fergusson "immediately following payment" (by the state) to the general contractor. When was payment required? [Integrated, Inc. v Alec Fergusson Electrical Contractors, 58 Cal Rptr 503 (Cal App)]
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Refer to the case Integrated, Inc v Alec Fergusson Electrical Contractors (58 Cal Rptr 503).
Facts
1) This case follows a dispute between contractor and subcontractor
2) Contractor failed to pay subcontractor in a timely manner and subcontractor refused to proceed. The payment was to be received immediately after contractor was paid by the customer.
3) Contractor then hired another party to finish the job and sued subcontractor for breach.
4) Trial held for contractor. Subcontractor appealed
Relevant Points
This case concerns a conflict between the printed form and typewritten form for payment terms to subcontractor.
Opinion
Appeals court reversed the decision.
The typewritten portion where payment should be made immediate holds. It was found that the subcontractor did not received payment for almost two weeks after contractor received payment from owners. Hence, it was contractor who breached the contract first.

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Tambe Electric Inc. entered into a written agreement with Home Depot to provide copper wire to Tambe at a price set forth in the writing, and allowing the contractor the option of paying for the wire over a period of time. Home Depot did not fulfill this written agreement and Tambe sued for $68,598, the additional cost it had to subsequently pay to obtain copper wire for its work. Home Depot defended that it had made an oral condition precedent requiring payment in full by Tambe at the time it accepted the price quoted in the written agreement. Decide. [Tambe Electric v Home Depot, 856 NYS2d 373]
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Answer:

Refer to the case Tambe Electric v Home Depot (856 NYS2d 373).
Facts
1) Buyer and seller made a written contract for seller to sell buyer wiring equipment with payment to be made over time.
2) Seller failed to provide items as contract requested, also claimed prior oral agreement with buyer for payment to be in full.
3) Buyer sued. Trial court held for buyer. Seller appealed.
Relevant Terms, Laws, and Cases
Parol evidence rule states that written contract can't be contradicted by oral agreements made prior to the contract as legal evidence. However, oral agreements that explain contract terms are allowed.
Opinion
Appeals court affirmed the decision.
The parol evidence rule holds. The oral agreement conflicts with expressly written terms, hence the written terms hold. The seller is liable for breach.

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With regard to an agreement for the sale of real estate, the statute of frauds: a. Requires that the entire agreement be in a single writing b. Requires that the purchase price be fair and adequate in relation to the value of the real estate c. Does not require that the agreement be signed by all parties d. Does not apply if the value of the real estate is less than $500
True False
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In negotiations with Andrews for the lease of Kemp's warehouse, Kemp orally agreed to pay one-half of the cost of the utilities. The written lease, later prepared by Kemp's attorney, provided that Andrews pay all of the utilities. Andrews failed to carefully read the lease and signed it. When Kemp demanded that Andrews pay all of the utilities, Andrews refused, claiming that the lease did not accurately reflect the oral agreement. Andrews also learned that Kemp intentionally misrepresented the condition of the structure of the warehouse during the negotiations between the parties. Andrews sued to rescind the lease and intends to introduce evidence of the parties' oral agreement about sharing the utilities and the fraudulent statements made by Kemp. Will the parol evidence rule prevent the admission of evidence concerning each of the following? img
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Panasonic Industrial Co. (PIC) created a contract making Manchester Equipment Co., Inc. (MECI), a nonexclusive wholesale distributor of its products. The contract stated that PIC reserved the unrestricted right to solicit and make direct sales of the products to anyone, anywhere. The contract also stated that it contained the entire agreement of the parties and that any prior agreement or statement was superseded by the contract. PIC subsequently began to make direct sales to two of MECI's established customers. MECI claimed that this was a breach of the distribution contract and sued PIC for damages. Decide. What ethical values are involved? [Manchester Equipment Co. Inc. v Panasonic Industrial Co., 529 NYS2d 532 (App Div)]
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Which of the following statements is true with regard to the statute of frauds? a. All contracts involving consideration of more than $500 must be in writing. b. The written contract must be signed by all parties. c. The statute of frauds applies to contracts that can be fully performed within one year from the date they are made. d. The contract terms may be stated in more than one document.
True False
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Boeing Airplane Co. contracted with Pittsburgh- Des Moines Steel Co. for the latter to construct a supersonic wind tunnel. R.H. Freitag Manufacturing Co. sold materials to York-Gillespie Co., which subcontracted to do part of the work. To persuade Freitag to keep supplying materials on credit, Boeing and the principal contractor both assured Freitag that he would be paid. When Freitag was not paid by the subcontractor, he sued Boeing and the contractor. They defended on the ground that the assurances given Freitag were not written. Decide. What ethical values are involved? [R.H. Freitag Mfg. Co. v Boeing Airplane Co., 347 P2d 1074 (Wash)]
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Lawrence loaned money to Moore, who died without repaying the loan. Lawrence claimed that when he mentioned the matter to Moore's widow, she promised to pay the debt. She did not pay it, and Lawrence sued her on her promise. Does she have any defense? [Moore v Lawrence, 480 SW2d 941 (Ark)]
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Norwest Bank had been lending money to Tresch to run a dairy farm. The balance due the bank after several years was $147,000. The loan agreement stated that Tresch would not buy any new equipment in excess of $500 without the express consent of the bank. Some time later, Tresch applied to the bank for a loan of $3,100 to purchase some equipment. The bank refused to make the loan because it did not believe the new equipment would correct the condition for which it would be bought and would not result in significant additional income. Tresch then sued the bank, claiming that its refusal to make the loan was a breach of the implied covenant of good faith and fair dealing. Decide. [Tresch v Norwest Bank of Lewistown, 778 P2d 874 (Mont)]
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A contract made for the sale of a farm stated that the buyer's deposit would be returned "if for any reason the farm cannot be sold." The seller later stated that she had changed her mind and would not sell, and she offered to return the deposit. The buyer refused to take the deposit back and brought suit to enforce the contract. The seller contended that the "any reason" provision extended to anything, including the seller's changing her mind. Was the buyer entitled to recover? [Phillips v Rogers, 200 SE2d 676 (W Va)]
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Kelly made a written contract to sell certain land to Brown and gave Brown a deed to the land. Thereafter, Kelly sued Brown to get back a 20-foot strip of the land. Kelly claimed that before making the written contract, it was agreed that Kelly would sell all of his land to Brown to make it easier for Brown to get a building permit, but after that was done, the 20-foot strip would be reconveyed to Kelly. Was Kelly entitled to the 20-foot strip? What ethical values are involved? [Brown v Kelly, 545 So2d 518 (Fla App)]
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The Dickinson Elks Club conducted an annual Labor Day golf tournament. Charbonneau Buick-Pontiac offered to give a new car as a prize to anyone making "a hole in one on hole no. 8." The golf course of the club was only nine holes. To play 18 holes, the players would go around the course twice, although they would play from different tees or locations for the second nine holes. On the second time around, what was originally the eighth hole became the seventeenth hole. Grove was a contestant in the tournament. He scored 3 on the no. 8 hole, but on approaching it for the second time as the seventeenth hole, he made a hole in one. He claimed the prize car from Charbonneau. The latter claimed that Grove had not won the prize because he did not make the hole in one on the eighth hole. Decide. [Grove v Charbonneau Buick-Pontiac, Inc., 240 NW2d 8533 (ND)]
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Martin made an oral contract with Cresheim Garage to work as its manager for two years. Cresheim wrote Martin a letter stating that the oral contract had been made and setting forth all of its terms. Cresheim later refused to recognize the contract. Martin sued Cresheim for breach of the contract and offered Cresheim's letter in evidence as proof of the contract. Cresheim claimed that the oral contract was not binding because the contract was not in writing and the letter referring to the contract was not a contract but only a letter. Was the contract binding?
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Physicians Mutual Insurance Co. issued a policy covering Brown's life. The policy declared that it did not cover any deaths resulting from "mental disorder, alcoholism, or drug addiction." Brown was killed when she fell while intoxicated. The insurance company refused to pay because of the quoted provision. Her executor, Savage, sued the insurance company. Did the insurance company have a defense? [Physicians Mutual Ins. Co. v Savage, 296 NE2d 165 (Ind App)]
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In February or March, Corning Glass Works orally agreed to retain Hanan as management consultant from May 1 of that year to April 30 of the next year for a present value fee of $200,000. Was this agreement binding? Is this decision ethical? [Hanan v Corning Glass Works, 314 NYS2d 804 (App Div)]
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Jackson signed an agreement to sell 79 acres of land to Devenyns. Jackson owned 80 acres and was apparently intending to keep for himself the acre on which his home was located. The written agreement also stated that "Devenyns shall have the option to buy on property _____," but nothing was stated in the blank space. Devenyns sued to enforce the agreement. Was it binding? [In re Jackson's Estate, 892 P2d 786 (Wyo)]
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Catherine (wife) and Peter (husband) Mallen had lived together unmarried for some four years when Catherine got pregnant and a marriage was arranged. Peter asked Catherine to sign a prenuptial agreement. Although his financial statement attached to the agreement did not state his income at $560,000 per year, it showed he was wealthy, and she had lived with him for four years and knew from their standard of living that he had significant income. Catherine contends that failure to disclose Peter's income was a nondisclosure of a material fact when the agreement was drawn up and that accordingly the agreement is not valid. Peter contends that he fully disclosed his net worth and that Catherine was well aware of his significant income. Further, he contends that disparities in the parties' financial status and business experience did not make the agreement unconscionable. Decide. [Mallen v Mallen, 622 SE2d 812 (Ga Sup Ct)]
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