past examinations in contracts i, Study notes of Contract Law

Download past examinations in contracts i and more Study notes Contract Law in PDF only on Docsity! PAST EXAMINATIONS IN CONTRACTS I Professorial Lecturer Gregory E. Maggs The George Washington University Law School Last Updated: June 6, 2021 CONTENT: This document contains copies of my examinations given in Contracts I on the following dates: Dec. 5, 2018 Dec. 6, 2017 Dec. 9, 2016 Dec. 8, 2015 Dec. 10, 2013 Oct. 21, 2013 (midterm) Dec. 5, 2012 Oct. 16, 2012 (midterm) Dec. 7, 2011 Oct. 18, 2011 (midterm) Dec. 8, 2010 Dec. 17, 2009 Dec. 5, 2008 Dec. 7, 2007 Dec. 6, 2006 Dec. 16, 2004 Dec. 11, 2003 Dec. 10, 2002 Dec. 18, 2001 Dec. 7, 2000 Dec. 19, 1999 Dec. 17, 1997 Dec. 10, 1996 Dec. 19, 1995 NOTES: These are all the Contracts I exams that I have given since 1995. I do not have copies of exams given before 1995. Some of the examinations included in this document have been converted from different computer file types. The conversion has changed some of the formatting of the exams, but not their content. The George Washington December 5, 2018 University Law School Final Examination In CONTRACTS I (Course No. 6202-20; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of five problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 PROBLEM II. (20 percent) After Erick received a large inheritance, he asked Flossie to be his financial adviser. Erick trusted Flossie because she had assisted his parents for decades. Erick and Flossie met regularly, and Erick paid Flossie $2000 for each meeting. They understood that either of them could end this arrangement at any time. After three years of successful investing, Flossie informed Erick that she was raising her rates to $3000 per meeting. Erick protested that the new rate was too high. Insulted by this reaction, Flossie threatened to sue Erick for unjust enrichment, asserting that her past advice had been worth much more than $2000 per meeting. Erick thought Flossie's position was ridiculous. But to avoid a lawsuit, Erick proposed an alternative: He would pay Flossie $2000 per meeting and also pay her a $5000 bonus after a year if certain investment goals were met. Flossie agreed with a handshake. When the investment goals were met, Flossie asked for her bonus. Erick refused to pay. When Flossie complained, Erick responded: "Surely you didn't think I intended to pay you? I just promised you the bonus so you would stop threatening to take unfair advantage of me." Flossie told Erick that his parents would be ashamed of his immoral conduct. Erick responded: "You are one to talk. I have just learned that you charge other clients only $1500 per meeting. You should have told me that." The loss of the bonus payment was a problem for Flossie because she needed the money to pay Gil, who recently had renovated her kitchen. Desperate for a solution to this problem, Flossie discovered that her contract with Gil had a clause saying: "Satisfaction guaranteed or you pay nothing!" Citing this clause, Flossie told Gil that she was not satisfied and would not pay. Flossie, in fact, was very happy with the work, even though Gil had completed it without obtaining a required building permit from the city. Gil wants Flossie to pay both the contract price and a $1000 "late payment charge" imposed by the contract for "any failure to make full payment on time." Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 4 of 8 PROBLEM III. (20 percent) Even though Henriette had no experience in marketing real estate, she decided to sell her home by herself. She posted a sign in her yard inviting potential buyers to call her. Nothing happened for two weeks. But then Ivo, a licensed real estate agent, saw the sign and telephoned Henriette. Ivo confidently advised Henriette that she "would not get a good price if she tried to sell the property without professional help." Ivo then offered his services, and told Henriette that his only fee would be 6% of the sales price if the home is sold during the period of the contract." Henriette immediately said yes. Ivo spent several weeks showing the home to many potential buyers but none of them made offers. Meanwhile, Juliette saw Henriette's sign, spoke directly to Henriette, and quickly bought the property for a generous price. Even though Ivo had done nothing to facilitate the sale to Juliette, Ivo still asked Henriette to pay him 6% of the sales price. Henriette refused. A statute of frauds in her state covers any "agreement to pay a commission upon the sale of an interest in real estate." After living in the house for a year, Juliette became dissatisfied with it. When negotiating the sale, Henriette had emphasized that the property was conveniently located near a subway stop. But Henriette had not mentioned that the subway stop was scheduled to have very limited service for the next two years because of long overdue renovations. Many other subway stops are similarly affected, and almost everyone in town is complaining about the situation. Juliette is annoyed because she has had to pay for expensive transportation alternatives. She now wants her money back so she can live somewhere else. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 5 of 8 PROBLEM IV. (20 percent) Kiko entered into a written contract to buy Lorena's house for $600,000. Shortly afterward, Kiko paid the contract price to Lorena, Lorena tendered a deed to Kiko, and Kiko took possession of the property and made various improvements. Kiko also purchased fire insurance from the Mario Fire Insurance Co. (Mario). He paid the premium for one year of coverage. A few months later, a fire severely damaged the house. Kiko made repairs and submitted a claim for reimbursement to Mario. In processing the claim, Mario discovered a startling fact: Kiko did not actually own the property because Lorena had previously conveyed the property to someone else. Mario refused to pay for the fire damage, asserting that Kiko had made a false statement in his application for insurance when he said that he owned the property. Kiko believes that Mario's position is unfair because he did not intend to deceive Mario. Kiko also thinks that the state should not allow fire insurance companies to refuse payment for a misstatement unrelated to the risk of a fire. Kiko's contract with Lorena contained a clause saying: "Lorena's property is sold 'as is.' The buyer expressly waives all claims against Lorena for defects." This clause appeared on the back of the contract a few paragraphs above the signature lines, and Kiko never read it. In fact, Kiko thought the only purpose of the written sales contract was to confirm the price so there would be no disagreement later. Kiko has relinquished possession of the property to the actual owner, who is unsympathetic to Kiko's plight, and unhappy that Kiko occupied the home without her permission. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 6 of 8 The George Washington December 6, 2017 University Law School Final Examination In CONTRACTS I (Course No. 6202-20; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of five problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM I. (20 percent) Adrian and Beatriz attended a real estate auction at which Calvin was selling five lots. Adrian was possibly interested in buying all the lots, but Beatriz only wanted lots 4 and 5. After the bidding started, Beatriz said to Adrian: "Instead of bidding against each other, why don't we work together? You should submit a bid for all five properties. If you win, you can sell me lots 4 and 5. What is the lowest price you would take for them?" Adrian responded, "That might be a good strategy. The lowest price for lots 4 and 5 would be $110,000." Beatriz told Adrian that to reduce competition, she would stop bidding immediately. Adrian was ultimately the successful bidder on the five lots, winning the auction with a total bid of $330,000. As Adrian and Calvin were signing a formal sales contract, Beatriz congratulated Adrian. Beatriz then suggested that she and Adrian should work out important details, such as how she should pay him the $110,000 and how Adrian would transfer title. Adrian denied that he had agreed to sell lots 4 and 5 to Beatriz for $110,000, insisting that they were worth at least $150,000. Adrian paid Calvin $330,000, but Calvin was concerned about completing the sale. "I don't want to get into the middle of your disagreement with Beatriz. You should have told me about your agreement with her. I think the sale is void." Adrian said: "Calvin, if you will convey the lots to me, I promise to pay you an additional $10,000 to make up for any inconvenience." Calvin agreed, and conveyed the lots to Adrian. But Adrian never paid Calvin more money. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 3 of 8 PROBLEM IV. (20 percent) While working for Jova at her shipping business, Kenneth suffered a painful injury. Kenneth subsequently contacted Lidia, a new lawyer who charged reasonable rates. Following a brief meeting, Kenneth and Lidia signed a written contract in which Lidia agreed to represent Kenneth for $200 an hour. Kenneth assumed, based on his own research on the internet, that he might recover more than $20,000 for his injury. Lidia believed Kenneth's recovery would be less, but did not tell Kenneth because she was unsure. When Jova learned that Kenneth had hired a lawyer, Jova immediately terminated Kenneth's employment even though he had two years remaining on his employment contract. Jova pointed to a paragraph in the employee handbook saying: "All claims regarding employment conditions will be resolved informally between the employer and employee. Hiring counsel is grounds for dismissal." Kenneth was handed the employee handbook when he started work, but he never read it. Kenneth believes that an employer should not be able to fire an employee for seeking legal advice following an injury on the job, but the issue has never arisen in his jurisdiction. After two months of unsuccessfully trying to get his old job back, Kenneth began looking for a new one. He found comparable employment three months later. Lidia spent 10 hours researching Kenneth's injury claim and concluded that his only right was to seek worker's compensation, which she helped him obtain. Lidia then sent Kenneth a bill for $2000. Kenneth was shocked and refused to pay because his entire worker's compensation recovery was only a little larger than that. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 6 of 8 PROBLEM V. (20 percent) After completing high school, Max decided he wanted to become a laboratory technician. A Google search led him to Norma's website. Norma offered an eight-week online laboratory technician training course for $7000. The website boasted that "graduates of the program routinely pass the industry's standard certification examination." Passing this examination helps laboratory technicians find jobs. Max completed Norma's program, which provided him with high quality instruction. But Max was sorely disappointed to learn that he was not immediately eligible to take the certification examination because he did not have 120 hours of laboratory experience. Most laboratory technician training programs provide this experience, but Norma's online course did not. Max refused to pay the final $3000 in tuition, saying that $7000 was a shockingly unfair price for a program that did not provide practical training. Max subsequently began an unpaid internship in Otis's chemical processing plant to gain the experience he needed to be eligible to take the certification examination. After Max had completed 120 hours of his internship, Max asked Otis to sign a document certifying this practical experience. Otis told Max that he would sign the document only if Max would agree not to work for a competitor in the same city for two years after passing the test. With the date of the certification test coming up soon, Max saw no alternative but to agree. He told Otis, "Okay." Otis signed the certification, and then took and passed the examination. Max immediately went to work for one of Otis's competitors. When Otis objected, Max told Otis, "I spoke to a lawyer, and he advised me that I could take the job because I never signed anything and because promises induced by duress are not enforceable." Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 7 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. Page 8 of 8 Page 3 of 8 PROBLEM I. (20 percent) Aletta needed $50,000 for her graduate studies. She telephoned her friend Bud to ask for a loan. Bud told Aletta, "You're in luck. I can lend you $50,000 without interest if you promise to repay the money in five years." Bud was not just being generous; he anticipated taking a tax deduction for the loan. Worried about her ability to repay the money in just five years, Aletta replied, "That's very generous, but a lot to think about. I will get back to you." Aletta later discussed her concerns with Carlotta, who told her, "Don't worry. In two years, I will receive a large payout from my trust fund and will need to invest the money. At that time, I can lend you whatever you need to repay Bud. You won't have to repay me until I find a better investment." Aletta asked Carlotta what interest she would charge. Carlotta said, "Just 1% above the prevailing rate." Aletta replied, "We have a deal!" Aletta next called Bud and said, "I accept your generous offer to lend me $50,000 and I will repay the money in just two years." Bud responded, "Aletta, I cannot make the loan. My proposal has expired. My accountant told me that I cannot take a tax deduction for an interest-free loan to you. I explained the problem in a birthday card that I just sent you." When Aletta complained bitterly that Bud was going back on his word, Bud responded, "I never signed anything." Aletta ended the call without saying goodbye. She then annoyed Carlotta by grumpily telling her to find another investment for her trust fund payout. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 4 of 8 PROBLEM II. (20 percent) Daniel applied to the Emilia Insurance Co. (Emilia) for a $250,000 fire insurance policy for his house. The application asked Daniel many questions, including the age of his furnace. Fearing Emilia would reject his application if he revealed that his furnace was 25 years old, Daniel simply did not answer the question. Emilia did not notice the omission and issued the requested policy. Just two years later, Daniel's furnace malfunctioned and caused a fire that damaged his home. Emilia told Daniel that it would not pay for the damage because "he had concealed the age of the furnace." The insurance policy contained a clause saying, "No claims will be paid for fires attributable to household appliances more than 20 years in age." Daniel hired Fabio to make repairs to his house, agreeing to pay him $100,000 for the work. Although the contract specified that Fabio would use ordinary quality electrical wire in rebuilding the house, Daniel later insisted on higher quality wire. Fabio initially said he would not change the plan unless Daniel paid him more money. But sensing Daniel's great disappointment, Fabio relented. He told Daniel he would use high quality wire and would not increase the contract price. Fabio finished two months behind schedule. During the period of delay, Daniel lived in a rented apartment and had to rent a ballroom at a hotel room to host his annual Christmas party. When Daniel finally returned home, he discovered that Fabio had used ordinary wire. Incensed by Fabio's willful misconduct, Daniel demanded Fabio replace the wire throughout the house. He thought it would be difficult to sell a house that previously had a fire unless all new wiring was high quality. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 5 of 8 PROBLEM III. (20 percent) Gilma contacted Hector about leasing office space. Hector showed Gilma a building that he boasted was "certifiably the best value in town." Based on careful research, Gilma and Hector calculated that the location would generate at least 10% more business for Gilma. Gilma and Hector then signed a four-year lease, setting the rent at $8000 per month. Two years into the lease, Ileana offered Gilma comparable office space "for substantially less than you are paying now." Gilma informed Hector that unless he reduced her rent she would leave. Gilma told Hector, "The office space in your building is not really worth the price." Gilma also complained that the new location had not produced any additional business. Hector agreed to reduce the rent by $2000 a month. But to Hector's surprise, Gilma stayed at Hector's building for only one more month. She then stopped paying rent and moved into Ileana's building. Hector spent so much time arguing with Gilma about her liability to him that he had no time to look for another tenant. Gilma and Ileana never signed a lease because they could not agree on the amount of the rent. After a year, Gilma moved to a new location without ever paying Ileana anything. Gilma now argues that contract law should forbid a landlord from collecting rent from a tenant after encouraging that tenant to break a lease with another landlord. Write an essay in which you identify and discuss any claims and defenses that the parties might assert and any remedies they might seek. Page 8 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. The George Washington December 8, 2015 University Law School Final Examination In CONTRACTS I (Course No. 6202-13; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 5 problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM III. (20 percent) Georgette managed Howard's extensive investments for several years but the two of them did not have a long-term contract. Instead, around the end of each month, Georgette would send Howard an email saying: "Dear Howard: Unless you object, I will manage your investments again next month at our usual price of $10,000." Sometimes Howard acknowledged the emails, but usually he did not. For years, he never failed to pay her. Earlier this year, Georgette sent Howard her usual emails three months in a row without hearing back from him. She managed his accounts but received no payment. Eventually, she called Howard to find out what was wrong. Howard's sister answered the phone and told Georgette that Howard had been involved in a serious automobile accident and had been hospitalized. "I don't have any authority to speak for Howard," Ivette said. "But if you continue to manage the investments, I will make sure you are paid for your past and future services." When Howard recovered the next month, he was dismayed to learn that his investments had made no money while he was in the hospital. He refused to pay Georgette for her work, arguing there was no consideration for the $40,000 she requested. Georgette then demanded that Ivette pay her. But Ivette refused, saying: "Among other things, I was so upset by my brother's comments that my words were made under duress." Georgette thinks Howard and Ivette's disgraceful conduct should not be excused. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 5 of 8 PROBLEM IV. (20 percent) Mt. Javier Inc. ran a ski resort. Customers paid for permission to use the entire ski facilities by buying "lift" tickets at the resort's front office. Customers had to show these tickets when they wanted to ride a ski lift to the top of a ski slope. The front of each lift ticket showed the dates on which it was valid in large type. The back of the ticket contained a legend on the back saying: IN CONSIDERATION FOR EACH LIFT RIDE, THE TICKET USER RELEASES MT. JAVIER, INC., AND ITS EMPLOYEES AND AGENTS FROM ALL CLAIMS FOR PROPERTY DAMAGE, INJURY, OR DEATH, EVEN IF CAUSED BY NEGLIGENCE. In addition, a highly legible sign was posted at each of Mt. Javier's ski lift terminals saying: "YOUR TICKET IS A RELEASE." Kay's parents drove Kay and her friends to Mt. Javier as part of a birthday celebration. Kay used ski lifts several times, reaching the top of ski slopes without incident. But while snowboarding down a slope, Kay fell over a manmade jump and fractured her spine. She has sued Mt. Javier for negligence. Mt. Javier hired Lester, a safety engineer, to prepare a report for use in court saying that Mt. Javier was not negligent in the design and maintenance of the manmade jump. They paid Lester $5000 and promised a 50% bonus if the court agreed with his expert opinion. "Just say whatever is necessary," Mt. Javier advised Lester. But when Lester finished the report, Mt. Javier demanded that Lester refund its payment because the report did not wholly clear Mt. Javier of negligence. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 PROBLEM V. (20 percent) Madeline bought a house from Newton. The sale documents contained a number of disclosures, including a statement that the "plumbing system is connected to the public sewer." Prior to the sale, Madeline promised to hire Orlene, a licensed home inspector, to examine the house and prepare a report about its compliance with the sales contract. Orlene detected no problems. The inspection contract required Madeline to pay Orlene $500 "if completely happy" with the quality of Orlene's work. Madeline paid Orlene $500 without objection. Madeline immediately experienced minor plumbing problems with the house. When a plumber came to make repairs, he informed Madeline that the house was connected to a septic system rather than the public sewer. Madeline would not have bought the property had she known it used a septic system. Marlene and Newton had no idea that the plumbing mattered so much to Madeline because she never said anything about the issue. Newton insists the misstatement was an innocent mistake because he thought the house was connected to the sewer system. Orlene's report to Madeline did not address the septic system. A property appraiser has expressed the opinion that there is no difference in value "between the properties in town that are on septic systems versus those on the sewer." The cost of removing the septic system and connecting the house to the public sewer system would be about $12,000. Madeline has contacted a lawyer, but still cannot decide whether she would prefer to nullify the sale or make Newton pay for the sewer connection. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM I. (20 percent) Ana, the founder of a growing chain of art supply stores, entered into a franchise agreement with Bill. The agreement authorized Bill to open one of her stores and required him to pay Ana five percent of his gross revenue. In exchange, Ana had to provide Bill with advice, signs, advertising, and other specified services. The agreement granted each party "an unqualified right" to cancel the franchise relationship at any time. After Bill had run his store profitably for several years, Ana called him and abruptly announced that she was terminating his franchise. When Bill demanded an explanation, Ana initially responded, "The reasons don't matter. I just want out." But when pressed further, Ana asserted that the arrangement was completely one-sided because she was not guaranteed any specific compensation. Ana also complained that Bill had overstated his business experience when applying for the franchise. Bill admits that he "made a mistake" in completing the franchise application form but feels that his prior experience should not matter given his success in running his store at a large profit. Unbeknownst to Bill, the real reason that Ana canceled the franchise was that she wanted to open another art supply store at a nearby location, and she hoped to eliminate Bill as a competitor. Ana's call came at an inopportune time for Bill. Just weeks before, Bill had hired Claudette to refurbish his store. Claudette agreed "to do what is necessary in her judgment as an interior decorator to make the store appealing to modern customers." Bill said he would repay her costs and provide reasonable compensation for her time. When Ana announced the cancellation, Claudette had spent $8,000 of her anticipated $12,000 in costs. To avoid wasting more money on a store that would soon be closed, Bill implored Claudette to stop working immediately. But Claudette continued until completion. "I have my reputation to think about," Claudette explained. Bill has paid Claudette $5,000 but refuses to pay her anything more. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 3 of 8 PROBLEM II. (20 percent) Danny is a university "development" officer who solicits charitable contributions from the university's alumni. As the fiscal year was coming to an end, Danny called Erika and asked her for a personal favor. Danny said: "Erika, I am only $100,000 away from my fund raising goal this year. If I reach the goal, I will earn a $10,000 bonus. As a friend of the university and of me, can you help?" Erika responded, "Anything for you, Danny!" Erika felt grateful to Danny because Danny had used his influence to help her nephew gain admission to a selective program at the university. Erika promptly called the university and promised to donate $100,000 over a two-year period to establish a scholarship fund in her name. Upon hearing this news, Danny immediately hired a company to repair the roof on his house, believing he could comfortably pay the $15,000 price upon receiving his bonus. Unfortunately, just a few days later, Erika's nephew complained to Erika about what he perceived as unfair treatment by the university administration. Incensed, Erika told the university she would reduce her gift to $10,000. When politely reminded that she had made a commitment, Erika responded that she was not bound because she had not signed any document. The university then told Danny that he had not yet earned his bonus. Fred heard about Danny's plight and called the university. He said, "I would like to donate $100,000." The dean responded, "Wonderful! We will recognize this gift by naming a classroom after you." The university paid Danny's bonus based on Fred's pledge. But later Fred told the university that he viewed his previous statement as more of an aspiration than a binding commitment, and that he regretted he could not pay anything. The university had already painted Fred's name on the classroom door. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 4 of 8 PROBLEM V. (20 percent) Nicholas rented commercial real estate from Odette. Nicholas's lease ran month-to-month, meaning that either party could terminate it on 30 days' notice. The lease required Nicholas to make his rental payments of $30,000 on the first day of the month by 11:00 a.m. The lease further said that all payments had to be made by a check delivered to Odette's office. When the lease was signed, it did not specify what would happen if a payment was late. But after several disputes on this point with other tenants, Odette sent this message to all of her renters: "Starting next month, a ten percent surcharge will be assessed for any late payments." Nicholas paid little attention to this announcement because he always made timely payments. Nicholas relied on Peter to deliver all sorts of packages around town. Although Peter was a high school dropout, he ran the most successful local courier service. He and his crew delivered letters and parcels for many businesses. Peter charged Nicholas a flat rate of $10 per item; the parties set this low price and put no limits on Peter's responsibility when Nicholas, a family friend, helped Peter get started. Since that time, on the first of each month, Nicholas asked Peter to take an envelope to Odette. Peter knew that the envelope contained a rental check, and agreed each time to deliver it by 11:00 a.m. Recently, Peter mistakenly delivered a check intended for Odette to another costumer. By the time he retrieved the check and took it to Odette, it was 12:30 p.m. Odette assessed Nicholas the contractual surcharge of $3,000. Nicholas has refused to pay on grounds that he had properly dispatched his payment before the time limit. Peter had trusted Nicholas to help him at all times, but is worried about what will happen now. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. Page 8 of 8 The George Washington October 15, 2013 University Law School Midterm Examination In CONTRACTS I (Course No. 6202-21; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 6 short-answer problems of equal weight. Each problem is based on cases covered in Parts I-IV.A. of the course syllabus. 2. Time for Completing. Absent special arrangements, you have one hour to complete this examination. You may divide your time among the problems as you see fit. I suggest that you devote approximately 10 minutes to each problem. 3. Answer Length. The expected length of the answer to each problem is 1 or 2 paragraphs. Your answers for all the problems may not exceed a total of 1500 words. 4. Answer Format. You must write your answers using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Open-Book Examination. This is an open-book examination. You must have your casebook and supplement with you and consult them to answer the examination problems. You also may consult any other written materials that you have brought with you. 6. Ambiguities. If you find the problems ambiguous in any sense, identify the ambiguity in your answer and make reasonable assumptions for resolving it. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 3 The George Washington December 5, 2012 University Law School Final Examination In CONTRACTS I (Course No. 6202-21; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 5 problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM I. (20 percent) Bertha acquired a vacant lot, paying a very low price for it because the ground was miry. Bertha planned to hire her friend Arthur to construct a medical facility on the property and wanted to lease the completed facility to Cristobal, a local physician. After reviewing the building specifications, Arthur called Bertha and left a voice message saying "the lowest price I could offer for the construction is $1 million." Bertha replied by email: "Your price is fine. But you must agree to complete the project in one year." Arthur immediately began work, assuming that he and Bertha would complete any necessary paperwork later. Bertha and Cristobal signed a lease that would begin in one year and run for 10 years. Cristobal was to pay "an initial rent of $5000 a month, with increases to be based on market conditions." Arthur had not anticipated the adverse soil conditions and soon ran into difficulties. Cristobal called Bertha and expressed worry about whether the building would be completed on schedule. Bertha reassured him by stating that she would pay him $5000 for each month of delay. Bertha then sent Arthur an email putting him "on notice as to possible damages for delay." Arthur missed the completion deadline. In fact, two months after it had passed, Arthur called Bertha and said that he would not finish the work because the boggy ground made the work too expensive. When Bertha protested, Arthur said: "You deceived me. It's a good thing I never signed anything." Bertha estimated the value of the work done at $400,000 and the cost to complete the work to be another $1,200,000. She has paid Arthur $200,000 as a down payment. As it stands, the structure has no market value. The market value of the structure would be only $1 million if it were completed. After Bertha told Cristobal she could not honor the lease, Cristobal found a suitable substitute facility three months later at the same rental rate. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 3 of 8 PROBLEM IV. (20 percent) Josephine crashed her truck into Kyle's car at a busy intersection. Kyle's vehicle was damaged and Kyle suffered significant injuries. Josephine had no insurance and Kyle's insurance was insufficient to cover his losses. Kyle therefore contemplated suing Josephine for negligence. Josephine told a police officer that she was not at fault because she had been forced to swerve to avoid a collision with another vehicle making an illegal turn. Kyle thought that Josephine's account of the accident was probably correct, but other witnesses insisted Josephine was negligent. Having suffered minor head injuries herself, Josephine just wanted to put the matter behind her. Against the advice of her own counsel, who believed Josephine was acting with unreasonable haste, Josephine agreed to pay Kyle $50,000 in exchange for his not suing her. Shortly after the agreement was signed, another driver came forward with a video recording from his dashboard camera. The video confirmed Josephine's account of the accident. Josephine consequently has refused to pay Kyle. Kyle sees no point in bringing a tort action for negligence given the new evidence. Kyle hired Laura to repair the damage to his car. When Kyle paid Laura for the work, Laura handed him a receipt. Fine print on the back of the receipt said: "Repairs are guaranteed for 30 days. Liability arising from any problems with the repairs is expressly limited to the price paid." A few days later, Kyle's car swerved off the road and was totally destroyed when it hit a tree. An investigation revealed that Laura had not repaired a problem with the steering mechanism caused by the earlier crash. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 PROBLEM V. (20 percent) Marco, an orthodontist, recommended that Nana have braces applied to her teeth. "They will bring all of your teeth into proper alignment and give you a beautiful smile," he said. After Nana expressed willingness to try the procedure, Marco asked her to sign a standard form. The form provided that Nana would pay Marco $4000 and that she would arbitrate--rather than litigate in court--"all claims alleging malpractice (i.e., negligence or incompetence on the part of Marco as a professional)." Marco applied the braces, and Nana paid him. After the treatment was completed, however, Nana had significant difficulty chewing her food. Although Marco was not negligent, the braces did not properly adjust the location of her teeth, and Nana now needs expensive and painful procedures to correct the problem. Nana asked her employer, Omar, for advice on whether she should seek compensation from Marco. Omar happened to be a friend of Marco and told Nana she should take no action. "Marco exercised ordinary care," Omar said, "so any lawsuit against him would be frivolous--a mere attempt to extract an unjust settlement. I'm sure this is what Marco would say if you sued him." At Marco's request, Omar later asked Nana to sign a document promising not to initiate any claims against Marco. Nana had three years remaining on her employment contract with Omar and knew Omar could not terminate her employment merely for refusing to sign the document. She also knew that state law in various ways prevents employers from discouraging employees from seeking lawful remedies. But Nana nonetheless signed the document "just to avoid controversy." Nana abided by the agreement for a few months and then, upon reconsideration, told Omar that she was planning to file a lawsuit against Marco in court. She did not feel bound to arbitrate the claims, as required by Marco's form, because she had not read the form before signing it and because Marco made no effort to explain the form to her. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. Page 8 of 8 PROBLEMS (1 hour) 1. Properly Identifying and Discussing Claims. Suppose in Mattei v. Hopper [p. 72] that (1) Hopper had wanted to complete the sale of her property; but (2) Mattei did not want to complete the sale because he had found less expensive property nearby; and (3) Mattei told Hopper that he was unsatisfied with the leases obtained by Coldwell Banker & Company. On these hypothetically altered facts, identify and discuss any claims that the parties might have made. 2. Properly Identifying and Discussing Defenses. In the note [p. 99] following Cohen v. Cowles Media Company [p. 98], the authors of our casebook report: "In its initial decision (Cohen I), the [Minnesota Supreme] Court concluded that although 'the newspapers may have had a moral and ethical commitment to keep their sources anonymous, ... this was not a situation where the parties were thinking in terms of a legally binding commitment.'" Identify and discuss the defense the newspapers appear to have raised. 3. Properly Identifying and Discussing Remedies. Suppose in Monarco v. Lo Greco [p. 305] that Christie Lo Greco had sought recovery from Natale Castiglia's estate under a theory of restitution. Under these hypothetically altered facts, identify and discuss the remedy Christie Lo Greco would have sought and how it would differ from the remedy he sought in the actual case. 4. Overlooking Claims or Defenses. Suppose in Lake Land Employment Group v. Columber [p. 58], that the court had accepted Columber's argument that his promise lacked consideration. On these hypothetically altered facts, identify and discuss any additional arguments or defenses that Columber might have needed to raise to prevent enforcement of his promise. 5. Applying the Law to the Facts. In Hobbs v. Massasoit Whip Co. [p. 167], the buyer apparently argued that he had not accepted the seller's offer to sell certain eelskins. Identify the legal rules applicable to this defense and discuss how the buyer and the seller might argue the rules should apply to the facts. 6. Accurately Understanding the Law. Identify the error in the Alumni Association of the University of Virginia's understanding of the statute of frauds at issue in Langman v. Alumni Association of the University of Virginia [p. 299], and explain how the correct rule applied to the facts of the case. END OF MIDTERM EXAMINATION Page 3 of 3 The George Washington December 7, 2011 University Law School Final Examination In CONTRACTS I (Course No. 6202-21; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 5 problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM III. (20 percent) Gordon invited general contractors to submit bids for building an extension to his shop. Helene was interested in the project. In the course of preparing her bid, she sought out electricians who might be subcontractors. Isaac, who lived in a neighboring county, heard about Helene's invitation and submitted a bid of $7,500 for the electrical work. He hoped for a $2500 profit. Helene told Isaac that he was the low bidder and then used Isaac's bid in preparing her own. Upon hearing that Gordon had selected Helene as the general contractor, Isaac bought $3000 of supplies. But then Helene announced she would use another electrician. Isaac protested. He argued that Helene implicitly had accepted his bid. Helene responded, "I apologize. I should have told you my policy is to use only local subcontractors. You are not eligible." She added: "Besides, I never signed anything." When Gordon learned of Isaac's plight, he asked Isaac if he would do some separate rewiring work on the premises. Isaac wrote to Gordon: "It's a good project, but I would need at least $6000 to do it right." Gordon wrote back, "I can agree to that." Isaac went to Gordon's shop, but Gordon stopped him as he was unpacking his tools. Gordon told Isaac that he had changed his mind and decided not to go forward with the project. "I am sorry," Gordon said. "I just cannot afford it. I miscalculated my finances." But when Isaac offered to drop the price to $5000, paid in advance, Gordon relented and agreed. Isaac was able to use $1000 of the supplies he had previously bought for the work for Helene; the rest he discarded. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 5 of 8 PROBLEM IV. (20 percent) Joyce inherited a large rental property from her mother's great aunt who recently died. Being inexperienced in any kind of business affairs, Joyce asked her cousin Kirk, an independent insurance broker, to help her obtain fire insurance for the building. Kirk told her he would do it. "Stick with me and you will never be at risk," Kirk said. As a broker, Kirk only expected to receive compensation in the form of a commission from the insurance company. He accordingly did not think he had incurred a legal obligation to his cousin. Kirk contacted the Leslie Insurance Company (Leslie), which agreed to insure Joyce's property for a year. Joyce paid Leslie very expensive insurance premiums for this period. At the end of the year, Leslie informed Joyce and Kirk it would no longer insure the property. Leslie also demanded that Kirk refund his commission because Leslie had discovered that Kirk did not have a valid insurance broker's license. State legislation requires insurance brokers to have a license, but does not say what happens if they do not have one. Before Kirk was able to find replacement insurance, Joyce's building was damaged by an accidental fire. Joyce was distraught by the damage because she would need to dip into her college savings to pay for the repairs. When she complained to Kirk, he was unsympathetic, saying: "You need to learn that in business, you get what you pay for, and you paid me nothing." Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 PROBLEM V. (20 percent) After Michael had worked at Nadine's advertising firm for several years, Nadine became dissatisfied with his work and told him to find another job. As they had not agreed to a specific period of employment, Nadine felt she was fully within her rights to fire him. But Michael surprised her by replying that he had kept records of several incidents in which Nadine had engaged in embarrassing misconduct. Michael then cooly proposed what he euphemistically called a "severance agreement." (A severance agreement is usually a settlement between an employer and a discharged employee in which the employee gives up any claims against the employer in exchange for money.) The proposal was that Michael would stop working for Nadine immediately but Nadine would continue to pay his salary for two years. "Is that your price?" Nadine asked. Michael nodded. Nadine paused, grimaced, and seeing no alternative said, "Fine." They didn't shake hands. One month later, Michael began work at Oscar's competing firm. Oscar liked Michael, but decided after a week that he did not fully trust him. Oscar at that point asked Michael to sign a "non-disclosure document" which said Michael would not reveal any confidential information learned in the course of his employment. The agreement further provided that Michael would pay six months' salary for each violation. "I don't want you tattling on me," Oscar explained. Michael signed the document without protest, reasonably understanding he would lose his job if he did not. Six months later, Michael called Nadine and told her he had learned some highly damaging confidential gossip about Oscar in his new job and that she might find the information useful in her business. Nadine agreed to pay Michael $5000 to hear the details. But after Michael told them to her, she laughed and said, "I have no intention of paying you $5000 or continuing the severance payments. You don't have any written proof, and besides you have mitigated any loss by working for Oscar." Oscar later learned what Michael had done, and promptly fired him. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8 Purpose of the Midterm Examination: On the final examination in December, you will be given a set of facts and you will be asked to "write an essay identifying and discussing any claims and defenses that the parties might assert, and any remedies that they might seek." The purpose of the midterm examination is to help you assess several specific skills you will need for writing successful essays on the final examination. These skills include properly identifying and discussing claims, defenses and remedies. They also include avoiding common problems such as overlooking claims and defenses, forgetting to apply the law to the facts, and misunderstanding the legal rules. Tips for Writing Good Answers When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds that the promise is too indefinite to enforce. Y will assert that there is no basis for determining the existence of a breach because ... and no basis for giving an appropriate remedy because .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous final examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 3 PROBLEMS (1 hour) 1. Properly Identifying and Discussing Claims. Using the facts in the Schott v. Westinghouse problem [pp. 109-110], identify the restitution and breach of contract claims Schott might assert. 2. Properly Identifying and Discussing Defenses. Suppose in Fairmout Glass Works v. Crunden-Martin Woodenware [p. 130], that Fairmount's communication of April 23, 1895 had omitted the words "for immediate acceptance." Using these changed facts, discuss Fairmount's defense that there was no offer. 3. Properly Identifying and Discussing Remedies. Suppose that Antillico Kirksey in Kirksey v. Kirksey [p. 56], Katie Scothorn in Ricketts v. Scothorn [p. 89], and Anna Feinberg in Feinberg v. Pfeiffer [p. 94] had been allowed to recover under the rule in Restatement (Second) of the Law of Contracts § 90(1). Discuss the arguments that the defendants in these cases might have made for limiting the remedies awarded. 4. Overlooking Claims or Defenses. In Callano v. Oakwood Park Homes Corp. [p. 110], the court held that the Callanos did not have a valid quasi-contract (i.e. restitution) claim against Oakwood Park Homes. Identify other claims that might have been brought on the facts of the case. 5. Applying the Law to the Facts. In Channel Home Centers v. Grossman [p. 239], one of Grossman's arguments was that he had not "manifested an intent to be bound by the agreement." Identify the legal rule applicable to this defense and discuss how Grossman might argue the rule should apply to the facts. 6. Accurately Understanding the Law. Identify the error in Flagship Property's understanding of the statute of frauds at issue in C.R. Klewin v. Flagship Properties [p. 270], and explain how the correct rule should apply to the facts. END OF MIDTERM EXAMINATION Page 3 of 3 The George Washington December 8, 2010 University Law School Final Examination In CONTRACTS I (Course No. 6202-11; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 5 problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time among the problems as you see fit. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 PROBLEM II. (20 percent) Don hired Emily to replace a covered deck at his home with an enclosed room for a price of $23,000. Immediately after the work began, Emily told Don that she had miscalculated the price and it would cost $26,000 to complete the construction and ensure her the $3000 profit she had expected. Don agreed to pay $25,000. Emily grumbled but continued to work. But shortly afterward, Emily again asked Don for more money. At this point, Don told Emily to stop work. Don now insists he was justified in voiding the contract because of the "stress, angst, and duress" she had caused him with her demands. Emily spent $12,000 on the project, and Don paid her nothing. Don subsequently asked Franklin to complete the project. Franklin inquired into the reason the work had been started but not finished. Knowing that Franklin was a friend of Emily, Don did not want to reveal the truth. He therefore said to Franklin, "I probably should not discuss the matter until I speak with my lawyers." In fact, Don did not have any lawyers, but Franklin did not know this at the time. Franklin told Don that he could complete a three-season room for $15,000, but that the lowest cash price for finishing a four-season room would be $20,000. These prices were slightly inflated because Don's talk about lawyers made Franklin nervous. Don told Franklin that he wanted a four-season room, the same as previously had been planned, and that Franklin could begin at once. Don gave him a check for $10,000 "as a down payment on the $20,000 price." A few days later, Franklin obtained a work permit from the city for a fee of $250. In the process, he learned that Emily previously had sought a work permit but had never received one because she had not paid the fee. Building without a work permit was unlawful. At this point, Franklin called Don and told him that he did not want to get involved in this ill-fated project. Franklin held onto the $10,000, thinking that he might give it to Emily if she could not recover anything directly from Don. Don estimates that it will now cost at least $22,000 to find someone else to do the work, and is having second thoughts because the room would add at most $15,000 to the value of the house. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 4 of 8 PROBLEM III. (20 percent) Gert, who owned and operated a small inn, decided to retire and lease the business to his nephew Harvey. Gert and Harvey negotiated a lease agreement which Gert memorialized in a letter he subsequently signed and mailed to Harvey. The letter said, among other things, that Gert would lease the inn "for five years if zoning rules allow it to remain open that long," that Harvey would pay Gert $100,000 per year for the lease period, that Harvey could keep all profits, and that Harvey would be responsible for all liabilities and expenses. The letter gave Harvey 10 days to submit objections to its contents. Harvey had no objections, so he gave the letter to his attorney to file. At the time of the lease, Gert knew that the inn's septic system was not functioning properly and that local authorities had ordered him to address the problem. But Gert did not tell Harvey because he knew the repairs would be very expensive. Instead, Gert informed Harvey, "I had the entire place inspected by a plumber just two weeks ago. I suggest you do the same." Harvey did not hire a plumber or contact local authorities before leasing the inn, and mistakenly assumed everything was fine. Making matters worse, shortly after Harvey's lease began, a guest named Irene checked out of the inn and fell on uneven ground caused by the failed septic system. She required extensive medical treatment and sued Harvey in tort. Harvey refused to admit liability because when Irene checked into the Inn, she had received a key card for opening her room. The key card contained a legend saying: "The inn is not liable to any guests for any injuries caused by any falls." Irene did not read the key card and did not see the legend. Harvey has now shut down the inn and wants to be free of responsibility for it. He has no intention of paying any money to Gert. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 5 of 8 PROBLEM IV. (20 percent) Jose asked Katia, a building contractor, to repair his house after a severe storm damaged it. Katia sent Jose a detailed proposal for making specified repairs for $150,000. Jose signed Katia's form on a line indicating he "ACCEPTED" the proposal. Below his signature, Jose identified six priority items that he insisted Katia "concentrate on first." Jose returned the form, and Katia worked diligently at the house for about a month. At that point, Jose asked Katia to pause all construction because Lee, a real estate developer, had mailed Jose a written offer to buy the residence, as is, for $400,000. The offer explained that Lee intended to tear down the building and replace it with a new home. Despite Jose's request, Katia kept working for a few days because she wanted to leave the property in a safe condition. Jose called Lee to discuss his offer, and they agreed that Jose would have one week to decide. Exactly one week later, Jose wrote back to Lee with an acceptance. Jose then told Katia, "I don't know if we had a valid contract, but I don't need your help any more. I have sent you $50,000, which is roughly the amount by which you have improved my property." Katia responded that she spent $70,000 to date and in any event Jose owed her the full $150,000 because it was his choice to cancel. Jose replied, "I disagree. I know you can find work elsewhere." Katia quickly called Lee and told him she was planning a lawsuit against Jose. Lee, who had not yet received Jose's letter, responded by dialing Jose and telling him that he would not buy the property unless Jose first paid Katia $100,000. Jose responded, "I will do that only if you pay me $500,000 for the house." Lee angrily rejected the proposal. Jose's letter arrived the next day. Jose's real estate agent predicts that she can sell Jose's house for $310,000. Lee's written offer to Jose specified that "damages for any default by buyer or seller will be 25% of the offered price (25% of $400,000 is $100,000)." Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 The George Washington December 17, 2009 University Law School Final Examination In CONTRACTS I (Course No. 202-11; 3 credits) Professor Gregory E. Maggs INSTRUCTIONS: 1. Content of the Examination. This examination consists of 5 problems of equal weight (i.e., 20 percent each). 2. Time for Completing. Absent special arrangements, you have three hours to complete this examination. You may divide your time as you see fit among the problems. 3. Answer Length. Your answers for all five problems may not exceed a total of 4500 words. 4. Answer Format. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. The quality of your writing will affect your grade. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 5. Materials You May Use. This is an open-book examination. You may consult any written materials that you have brought with you. 6. Ambiguities. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. Retention of Examination. You may retain this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all examinations, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM I. (20 percent) Alex retired from his job as a real estate agent on the day he turned 65. He said goodbye to his colleagues, moved out of his office, and happily let his state license to sell real estate expire. Alex thought he would never sell property again. But one year later, a young woman named Bonnie called Alex because she wanted help disposing of commercial real estate that she recently inherited from her great-grandmother. Bonnie said, "I know that you are retired, but I was hoping you could help me find a buyer for this property." After learning more details, Alex ended the call by saying, "I will see what I can do." Alex spent the next few days showing the property to possible buyers including Colin. Colin liked what he saw and immediately called Bonnie on his mobile phone. After a few minutes of discussion, they negotiated a sale and then hung up. Colin was delighted with the price, although he knew he had misled Bonnie by confidently telling her that his offer "was really more generous than anyone could expect in this market." Without waiting for Bonnie to send him a deed, Colin sent her $5 "to seal the deal," and then began preparing the site by cleaning up hazardous waste that had been left on the property. Colin had big plans for starting a new manufacturing business, which he hoped would be very profitable. Alex asked Bonnie to pay him the customary 6% sales commission that real estate agents earn for arranging sales. Bonnie, who had no experience in real estate, was stunned. She had no idea that Alex was expecting a sales commission, especially not one so high. She soon told both Alex and Colin that the sale was off, and that she would sell the property to someone else for more money. To protect herself from liability, she declared that she had never intended to be bound by any promise. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 3 of 8 PROBLEM IV. (20 percent) Karl owns a farm next to a highway. Julia asked Karl if he would lease a corner of his property to allow her to erect a billboard. Julia's plan was to sell space on the billboard to advertisers. Julia met with Karl, inspected the site, and discussed various details. After the meeting, Karl wrote Julia a letter setting forth a proposed rent of $300 per month for 10 years and other specific terms (e.g., no political messages, etc.). The letter concluded by saying, "upon agreeing to these terms, you can get started immediately." Julia received the letter and at once began work on the project. As she routinely does in her business of creating billboard space for rent, she ordered a prefabricated billboard and arranged for a contractor to install it. The contractor quickly went to survey the site. The contractor made various plans and measurements, but came back with bad news for Julia. At the site, Karl was negotiating with Lisa, one of Julia's competitors in the billboard business. Lisa promptly sent a written offer to Karl, promising to pay him $400 per month for the same space, also for 10 years. Karl wrote back, "Lisa, I accept, but you have to deal with any liability that I may have to Julia." Karl had told Lisa that he was negotiating with Julia, but he neglected to mention that he had made her a written offer. Shortly afterward, Karl received a special delivery letter from Julia saying, "You should not be negotiating with Lisa. I have already accepted your offer by performance." Karl informed Julia that she was too late. Lisa built the billboard, used it to make a large profit, but never paid Karl any rent and denied any duty to indemnify Karl. Lisa said: "Sorry, Karl, but I don't believe we have a contract." Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 PROBLEM V. (20 percent) Matthew was an executive at Nicole Industries Inc. (Nicole). For many years, Nicole has given its executives substantial bonuses at the end of each year. The size of the bonus depends on many factors, such as the overall profit of the business and the employee's contribution to the company. But Nicole has consistently said that all bonuses are discretionary and that the company may change the size of bonuses or eliminate them at any time. Three years ago, Matthew told Nicole he wanted to retire. Because Nicole highly valued his services, Nicole told him that if he would agree to work for three more years, he would receive a "double bonus" each year. Both parties signed an agreement to this effect. A year later, Nicole announced that its business profits were down and that it was cutting all bonuses in half from the previous year. Nicole, however, gave Matthew a bonus equal to what he had received the previous year, saying it was "double what you otherwise would have received." Matthew protested to no avail that he would have retired earlier if he had known that Nicole "would walk away from its promise in this ridiculous way." Matthew then promptly resigned. Otto, a lawyer, promised Matthew he could persuade Nicole to settle the dispute and pay Matthew at least $20,000. In exchange, as they agreed, Matthew paid Otto $5,000. Otto did substantial and competent work in trying to obtain a settlement, but he simply could not persuade Nicole to change its position. When Matthew asked Otto for his money back, Otto refused to repay anything on grounds that he was not negligent. Making matters worse, Nicole recently sent Matthew a letter demanding that he refund his last bonus in view of his breach of contract and pay for Nicole's costs in finding another executive to replace him. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. Page 8 of 8 PROBLEM I. (20 percent) Ana and Bill owned two adjacent commercial properties. Bill told Claudette, a contractor who designs and constructs buildings, that he would pay her $5000 to plan an additional structure for his property. Claudette responded, "I'm busy now, but I will try to do it soon." Shortly afterward Claudette found time to produce a plan. When Bill mentioned the plan to Ana, she immediately complained about the proximity of the proposed new building to her land. Bill did not want to upset Ana, but he worried that any other location would be inconvenient to his customers. Ana told Bill, "One solution would be for you to locate the building at the back of your property and for me to grant you an easement allowing your customers to drive across my property." Bill responded, "Great! Let's do that!" Bill told Claudette of Ana's suggestion, and Claudette modified her plan to locate the new building at the back of Bill's lot. In the new plan she estimated that the price for the construction would be $175,000. She informed Bill that he owed her another $2000 for revising the plan. Bill told Claudette: "If you want the construction job, you can start next week." Shortly afterward, Ana informed Bill that she would not grant him the easement or any other interest in her land because she had decided to sell the land and the buyer did not want Bill's customers on his property. "I'm sorry. I never expected you to go forward with my suggestion so quickly," she explained to Bill. Bill met Claudette at the work site where she was making plans to commence building. He thanked Claudette, but told her he did not want to proceed. "I am sorry," he said, "I guess we were mistaken in thinking Ana would grant the easement." Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 3 of 8 PROBLEM II. (20 minutes) Danny, a watchmaker, and Erika, a famous movie actress, reached a deal at an awards party. Danny offered to pay her $2 million to endorse his watches in an advertisement to be included in magazines and newspapers. The only condition was that Erika had to agree not to wear anyone else's watches for 24 months and to forfeit the whole $2 million payment if she did. Erika, who really liked Danny's watches, told him that these terms were fine. With a shake of hands, they agreed. The next week, Erika and Danny made the advertisement and Danny paid her the money. Just a few months later, Danny learned that Erika had made another advertisement for Fred, a rival watchmaker. In this advertisement, she posed for pictures in which she wore one of Fred's watches. Erika did not think her actions would be a problem because Fred had promised not to use the advertisement until after her contract with Danny had expired. But Danny immediately demanded that Erika return the $2 million payment. When Erika refused, Danny offered a compromise. He would not sue her if she gave him back $250,000. Danny's attorney had advised Danny to propose this settlement because he predicted that a jury would never award him $2 million for Erika's minor breach. Erika accepted Danny's offer, but she later felt cheated when she learned that Danny had not divulged his attorney's advice in proposing the settlement. Erika did not return the $250,000. Danny now plans to recover whatever he can. Publicity over the dispute between Danny and Erika ironically increased sales for both Danny and Fred. Fred has even bragged that Danny's litigiousness had given him a benefit of $500,000 worth of free publicity. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 4 of 8 PROBLEM III. (20 percent) To earn money for college, Grace took a part-time job with the Henri Company, a corporation that makes chemical products. Neither Grace nor the Henri Company committed themselves to a term of employment. But they did agreed that part of her compensation would be paid in shares of stock in the company. After Grace had worked for the Henri Company for two months, the company asked her to sign a form saying: "The Henri Company has the right to repurchase, at a price of $50 a share, any stock that it sells to you." Grace signed the form without objecting because the stock price was much lower than $50. Two years later, Grace decided to quit her job. At that time, she had accumulated 100 shares of stock. The Henri Company demanded that Grace sell the shares to the company for $50 per share. Grace did not want to sell. At the time, the price of the stock had risen to $100 a share. In addition, she had already pledged to transfer the stock to St. Ida's Church. In making the pledge, she wrote a letter to the church stipulating: "Proceeds from the stock shall be called Grace's Fund and shall be used for educating Sunday school students." St. Ida's Church recently hired teachers for these students. It was hoping to use Grace's Fund to pay some of them, but it has other money that could be used for this purpose. Grace still owns the stock. The Henri Company wants her to return it because the company does not want outsiders holding too many shares. St. Ida's Church does not care with it receives the shares or their cash value, but it strongly feels that Grace should keep her word. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 5 of 8 END OF EXAMINATION ---------------------------------- These problems were inspired by recent cases. They contain some of the actual text from these cases, but this text is not indicated with quotation marks. The facts were substantially altered and embellished to increase the number of issues. Names were changed to dissociate the actual parties from any fictional facts. Because this examination is open-book, the names of the cases will be revealed at a later time. Page 8 of 8 The George Washington December 7, 2007 University Law School Final Examination In CONTRACTS I (Course No. 202-11; 3 credits) Professor Gregory E. Maggs Instructions: 1. Absent special arrangements, you have three hours to complete this examination. 2. The examination contains 5 problems of equal weight (i.e., 20 percent each). You should devote about 36 minutes to each problem. 3. This is an open-book exam. You may consult any written materials that you have brought with you. 4. You must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous exams. The quality of your writing will affect your grade. 5. To make your answers easier to read, you must indent the first line of each paragraph and include a blank line between paragraphs. 6. You should make reasonable assumptions about any facts not stated in the problems. If you find the problems ambiguous in any sense, address the ambiguity in your answer. 7. You may keep this copy of the examination at the end of the examination period. Page 1 of 8 Tips for Writing Good Answers: Each problem presents some facts and then asks you to "Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek." When identifying and discussing claims, be very specific about who might assert them and what they might allege (e.g., "X might sue Y for breach of contract, claiming Y made a promise to do ... and broke it by doing ...."). When identifying and discussing defenses, describe in detail what the parties might argue based on the relevant facts and applicable law (e.g., "Y might defend on grounds of mutual mistake, asserting both parties assumed ... when in fact .... X might respond ...."). When addressing remedies, identify the type or measure of relief that the parties might seek (e.g., "X might seek damages, equal to ....") and any possible reasons for denying or limiting the relief. As the instructions say, you must write your answers in essay form, using complete sentences and proper paragraphs. Do not compose lists, outlines, or bullet points, or attempt to replicate the format of grading guides used to score previous examinations. In addition, as on all exams, you should plan before writing, budget your time, and consider all the facts. You should not waste time discussing subjects not at issue. Good luck! Page 2 of 8 PROBLEM III. (20 percent) After her fall law school exams, Gabrielle took a bus operated by Humberto Transit home to see her family. Misfortune struck and the bus broke down in a remote area. Ingrid, a local resident, saw that Gabrielle needed a place to spend the night and invited her to stay at her house (which Ingrid operates as an elegant "bed & breakfast" inn during the summer months). When Gabrielle departed the next day, she thanked Ingrid profusely. Although Ingrid had not asked for compensation, Gabrielle promised to send her a $300 check. Gabrielle felt she could afford to be generous because she was sure that Humberto would have to reimburse her for the expense. Gabrielle completed her journey by taking a bus operated by an upscale rival bus company. She arrived home a day late, despondent about losing precious vacation time. To make matters worse, she discovered Humberto had damaged her suitcase and its contents (including her laptop computer). Gabrielle demanded compensation. Humberto offered to reimburse only the ticket price. Humberto told Gabrielle that, as a law student, she should know that consequential damages are not recoverable in these circumstances. Gabrielle then reluctantly accepted the proposed settlement. She later told Ingrid that she could not pay her. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 5 of 8 PROBLEM IV. (20 percent) Jerry rented a party room at Karen's hotel so that he and his friends could celebrate their high school graduation. The contract required Jerry to pay for all damage to hotel property. At the party, Jerry spilled his drink, staining some fancy drapery. As a remedy, Karen and Jerry agreed that he should take the stained drapery to Lorenzo's dry cleaning shop for cleaning. Karen called Lorenzo and arranged to have the cleaning done. After Jerry left, Karen became worried. She called Jerry on his cell phone and told him that, if something went wrong, she would have to replace all the drapery in the party room because she could not find an exact match for the stained drapery. Karen asked Jerry to come up with a different plan. But Jerry wanted to put the matter behind him. So he assured Karen there would be no problem, and that he would cover Lorenzo's liability if the stained drapery were further damaged and Lorenzo did not pay. Lorenzo took the stained drapery and handed Jerry a numbered receipt to give to Karen. Ordinarily, Lorenzo does not clean expensive fabrics because the risk does not justify the cost. But Lorenzo agreed to clean the stained drapery because Karen had told him that "it was just an old curtain." Lorenzo's machinery unexpectedly shredded the stained drapery. Lorenzo paid Karen $200, pointing to a clause on the receipt saying that the "maximum liability to the owner of any garment damaged is $200." Karen calculated her losses at $800 for just the stained drapery or $5000 for replacing all the drapery in the party room. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 6 of 8 PROBLEM V. (20 percent) Melissa paid Noel to build a wharf to accommodate her newly purchased floating gambling casino. Although their contract called for the wharf to have entrance and exit ramps 10 feet wide, Noel mistakenly made them only 8 feet wide. As a result, the city fire inspector would not allow the casino to open. Melissa hired Olga to remedy the problem. Although Olga thought that it would make more sense to sell the dock and build a new one somewhere else, she dutifully dismantled the existing wharf and rebuilt it with proper ramps. The expensive reconstruction work took 10 weeks, 3 weeks longer than Olga had promised. During the construction delay, Melissa had to break off agreements she had made with several performers who were scheduled to provide entertainment. Melissa also missed out on the profit that she anticipated making during the opening weeks of the new casino's operation. Melissa demanded her money back from Noel and additional compensation for her losses. But Noel threatened to bring a counterclaim against Melissa for the tort of deceit in connection with other business deals. Although Melissa thought this claim had no merit, a jury might have believed Noel. Eventually Melissa and Noel agreed to drop their claims against each other. Melissa later regretted this decision when she heard Noel bragging that he "had duped Melissa with a bogus charge." The only good news was that her casino was successful from the start. Write an essay identifying and discussing any claims and defenses that the parties might assert and any remedies that they might seek. Page 7 of 8