Tower of Power - Contracts - Exam, Exams of Contract Law

Download Tower of Power - Contracts - Exam and more Exams Contract Law in PDF only on Docsity! CREIGHTON UNIVERSITY SCHOOL OF LAW CONTRACTS II §§ A & B SPRING SEMESTER EXAMINATION Professors Anderson, Shkolnick & White Friday, May 8, 1998 PART I Page 1 of 5 INSTRUCTIONS: THIS IS A THREE-HOUR CLOSED BOOK EXAMINATION. EACH PART HAS BEEN ALLOTTED ONE AND ONE-HALF HOURS. BOOKS, STUDY NOTES, OUTLINES AND ANY OTHER MATERIALS ARE NOT PERMITTED IN THE EXAMINATION ROOM. YOUR ANSWERS MUST BE SUPPORTED BY YOUR REASONS. THE TIMES INDICATED REPRESENT OUR ESTIMATE AS TO THE TIME YOU SHOULD ALLOCATE TO EACH QUESTION. PLACE YOUR EXAM NUMBER, SECTION, PROFESSOR'S NAME AND COURSE TITLE ON EACH BLUE BOOK. IF YOU WRITE MORE THAN ONE BOOK, NUMBER THE BOOKS, e.g., 1 of 2, 2 of 2. PLEASE WRITE ON EVERY OTHER LINE OF THE BLUE BOOK. QUESTION NO. 1 (Parts A, B, & C): Suggested Times: Part A - 20 minutes Part B - 20 minutes Part C - 10 minutes The residents of the Tower Park neighborhood, an area located within the boundaries of a large midwestern city, formed an entity called "Tower of Power," the purpose of which was to initiate and monitor activities designed to protect the security of the neighborhood. Each homeowner who belonged to "TOP" agreed to pay a $300 one-time charge for an external alarm box to be installed on each home and a monthly fee of $100 to support TOP's actions. This monthly payment was due so long as the homeowner remained a member of TOP. Among other actions taken, TOP entered into a contract with Guardian Security, Inc. for neighborhood security services. Under this contract, Guardian agreed to install and maintain the external alarm boxes on the premises of each TOP member, and provide security patrol services for the neighborhood. The contract also created a review panel, whose function it was to monitor the services performed by Guardian, and to hear and resolve grievances by TOP members against Guardian. Guardian was to receive a monthly fee equal to "60% of the $100 month fee paid or payable by TOP members." Guardian was selected for this contract because its president and most of its security officers resided in the neighborhood and belonged to TOP. Indeed, these security officers had for some time been patrolling Tower Park on an informal basis. CONTRACTS II §§ A & B SPRING SEMESTER EXAMINATION Professors Anderson, Shkolnick & White Friday, May 8, 1998 PART I Page 2 of 5 QUESTION NO. 1 (continued) Part A - 20 minutes Guardian commenced performance under the contract with TOP in June of 1996. One night in late August of 1996, and without advance notice to TOP, Guardian removed all of its security officers on patrol in the neighborhood because TOP had not paid the July and August fees due Guardian under its agreement with TOP. According to TOP, this was because individual members had not paid the monthly dues to TOP. Unfortunately, later that same night, a team of burglars brazenly and openly entered the home of Lucy Zehmer, a wealthy socialite, and stole several expensive works of art. Ms. Zehmer has filed suit against Guardian for $50,000, the value of the stolen art. I.M. Careful, President of Guardian, has asked you to advise him of Guardian's chances in this lawsuit, including any defenses it might raise. Careful candidly admits that the burglary would not have occurred had Guardian's security patrol been on the job at the time of the burglary. Advise Careful. Part B - 20 minutes Upset over the burglary, Ms. Zehmer leased her Tower Park house to Matt Daemon, a rising young actor with a large and devoted following of fans. As part of the deal, Zehmer assigned Daemon her rights as a member of TOP, and Daemon promised to perform all ". . . Zehmer's obligations as a member of TOP." Ms. Zehmer retained her membership status in TOP. Daemon's fans attempt to follow him everywhere and are known for their habit of camping outside Daemon's home. Like all celebrities, Mr. Daemon receives a certain amount of hate mail, death threats, and the like. A few days after Daemon moved in, a variety of fans began to collect outside the home. Guardian, now back on the job because TOP is current in its obligations, complained to TOP, stating that the fans appear at all hours of the day and night, causing many night alarms. TOP approached Daemon and asked him to take measures to remedy the problem. He refused, stating that the fans were TOP's problem, not his. Daemon also refused to pay the $300 fee for the alarm box installation which Zehmer had never paid. TOP now asks you if it must continue to have Guardian perform any services for Daemon, and whether TOP can recover the $300 fee for the alarm box installation from Daemon. In this second regard, TOP tells you that Daemon, correctly it turns out, informed TOP that the alarm box initially installed by Guardian while Zehmer resided on the property was defective. Advise TOP of its rights, and any likely defenses Daemon might raise. Part C - 10 minutes Guardian, now back on the job because TOP is current in its obligations, but tired from all of the above, wants out of the TOP contract. Accordingly, it entered into an arrangement with First Response Security, Inc. under which Guardian "assigns the TOP contract to First Response." TOP asks you if Guardian can do this, and if so, can TOP hold First Response and Guardian liable if it fails to adequately perform the security contract. Advise TOP.