Consideration Analysis - Contracts - Exam, Exams of Contract Law

Download Consideration Analysis - Contracts - Exam and more Exams Contract Law in PDF only on Docsity! Contracts Fall 1996 Exam.wpd file:///J|/Backups/WEB%20ARCHIVE/OLDSITE/Full%20Jan%2030%202008/exams/Content/1996x.htm[1/22/2009 3:26:01 PM] SAINT LOUIS UNIVERSITY SCHOOL OF LAW FINAL EXAMINATION Professor Frost Closed Book Exam December 11, 1996 3 hours CONTRACTS READ ALL THE FOLLOWING INSTRUCTIONS CAREFULLY (i) Write your examination number on each page of this examination. Use only your examination number, not your name. (ii) This is a closed book examination. You MAY NOT use any materials. (iii) Statutory, case and restatement citations may be used but are not required. The better answers will include a thorough analysis of the issues presented rather than a string of citations. (iv) Conciseness and clarity of expression, organization and clarity of presentation, while not separately taken into account in the grade, necessarily have some impact on the grader's evaluation of your understanding of the subject matter. (v) Answer each question only on the lines provided. Take care that your work is legible. Do not write in the margins or on the back of the page. (vi) This examination has 11 pages. Check that you have a complete examination. (vii) This examination consists of 8 questions. Each question is given a suggested time limit that corresponds to the weight given the question in the determination of your final grade. ALL ANSWERS MUST BE EXPLAINED. Your grade will be based on your analysis of the issues rather than your ability to come to a single "correct" solution. (viii) Remember that this is an examination of your understanding of the material covered in Contracts. Answer the questions based upon the Contracts readings and class discussions and not on the basis of material discussed or read in your other classes. Question 1 15 minutes Limber Lumber Company, in a written agreement, agreed to purchase from Fred Farmer the right to remove all of the timber from a 40 acre tract of land "should Fred purchase the land on or before January 1, 1997." At the time they signed the agreement, Fred's neighbor, Ned, owned the land. The agreement required Limber to pay $40,000 for the right to remove the timber. Both Fred and Limber Lumber signed the agreement on July 1, 1996. Contracts Fall 1996 Exam.wpd file:///J|/Backups/WEB%20ARCHIVE/OLDSITE/Full%20Jan%2030%202008/exams/Content/1996x.htm[1/22/2009 3:26:01 PM] On September 15, 1996, Fred received a letter from Limber stating, "Since the price of timber has fallen, we have decided not to proceed with our arrangement to purchase the timber from you." Fred entered into a contract to purchase the 40 acres from Ned on October 1, 1996 and this purchase was completed on November 15, 1996. Fred would like to know whether his agreement with Limber Lumber is binding. Advise Fred. Question 2 15 minutes On September 1, 1996, Carla Capital, president of Capital Construction Company, called Sam's Sewer Service to solicit a bid from Sam's for laying all of the sewer lines in Misty Acres Development. Misty Acres is a new housing development for which Carla serves as general contractor. After discussing the extensive specifications for the sewer lines, Sam told Carla that Sam's would do the work for $100,000. Carla told Sam that that price would be fine and that she would send the contract over within a week. On September 6, 1996, before Carla had sent the contract, Sam called her to tell her that he had just been awarded a contract for work on a large building project and that Sam's would be unable to do the Misty Acres job. Carla was forced to use another subcontractor to complete the sewers at a cost of $125,000. She would like to know if she has any rights against Sam's Sewers. Advise Carla. Question 3 15 minutes On July 1, 1996 Orville Davis wrote to his niece Blanche to inform her that he had fallen ill. He concluded the letter with the following statement, "I know that you have a good life in Missouri, but if you will move to California and help me out, I will give you a house and you will inherit everything I own." Orville was extremely wealthy and had no other family. Upon receiving the letter, Blanche immediately sent a telegram to Orville stating, "I will be there within the month." Orville received the telegram on July 5, 1996. Blanche put her house up for sale and began packing her belongings for the trip to California. Orville died on July 15, 1996. Blanche has just discovered that Orville's will left everything he owned to the Grunge Home for Wayward Musicians. Advise Blanche of her rights against Orville's estate. Question 4 15 minutes On July 1, 1992, at a family gathering, Fred announced to the entire family that he wanted to transfer the family business to his youngest daughter, Darla, who was just entering college. All present agreed that this was a fine idea. Larry, Fred's oldest son was home after completing his first year at the Gilbert's College of Law, suggested that it might be a good idea to formalize the arrangement. He suggested that his father offer to sell the property to Darla for $1,000 with the sale to be contingent upon her attainment of a business degree. Larry got out his pen and drafted an agreement in which Darla agreed to obtain a business degree and pay $1,000 and Fred agreed to transfer the business. Both Darla and Fred signed the agreement. Darla and her Fred have had a falling out and despite the fact Darla has obtained her business degree and is ready to