Exam 10: Legality, consent, and Writing

For statute of frauds purposes,an interest in land includes:

Which of the following contracts is enforceable without a writing?

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest are paid in full.The contract is:

A minor,someone under age 18,lacks legal capacity to contract and normally can create only a voidable contract.

In order to satisfy the statute of frauds,a writing must be:

In 1970,Continental Airlines agreed to buy a number of DC-10 airplanes from McDonnell Douglas Corporation (MDC).Their contract included a limited warranty in which MDC undertook certain servicing obligations and an exculpatory clause in which Continental waived "all other remedies" against MDC.On March 1,1978,one of these DC-10s was nearing takeoff at Los Angeles International Airport when the two front tires of its left-side landing gear blew out.The pilot aborted the takeoff,but the uncushioned landing gear tore through the tarmac and broke away from the plane.This ruptured the left wing fuel tank,which burst into flames.The emergency escape slides failed,apparently due to the heat of the fire.Some passengers evacuated through the copilot's window,others jumped from the exits.Four passengers died,and over 70 suffered injuries.The plane was destroyed.It should be noted that the exculpatory clause did not prevent the passengers from suing Continental and/or MDC.Continental sued MDC and MDC defended based on the exculpatory clause.Is this type of clause enforceable? Discuss exculpatory clauses,particularly the one involved here.

Contract rescission cannot be based upon a unilateral mistake.

Richard and Danita are negotiating the sale of Richard's car.Danita had been present a few months earlier when Richard bragged to a group of friends that his car got 33 miles to a gallon in city driving,which was an exaggeration.Before they agree on a price for the car,Richard:

When Mohammed was hired by Pomico,Inc.,he signed the following agreement,"Upon termination of my employment with Pomico,I agree not to work for a competing company within 30 miles of Pomico's headquarters for one year." This agreement,important to protecting secret information developed in the employer's business,is an:

Ramona orally agreed to work for Brahma,Inc.for the rest of her life for $50,000 per year.This agreement would not be enforceable since it violates the one-year rule of the statute of frauds.

E-mation entered into a contract with a consumer,Ezra.Ezra was a recent immigrant to the United States,spoke very little English,and had no formal education.The contract provided for Ezra to pay $2500 for a computer system.The system was worth $400.If E-mation sued Ezra under the contract,what is the most likely result?

Travis had too many beers at the baseball game.Ed realized Travis was so intoxicated he wouldn't know what he was doing,so he got Travis to sign a promise to sell his motorcycle to Ed for $50.When Travis gets sober,he may void the contract.

When Randy accepted a job with Buren Construction,Randy signed the following agreement,"Upon termination of my employment with Buren Construction,I agree never to work for another employer as an electrician." If Randy resigns from Buren Construction,this agreement would be upheld under the theory of freedom of contract.

The Uniform Electronic Transaction Act (UETA):

Which of the following is an example of an exculpatory clause?

To be valid,a noncompete clause must be:

Sweet Plantation,Inc.made a written contract with Candy,Inc.whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.35 per pound.A dispute arose as to how much sugar Sweet is to supply.The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the parties regarding the requirements of Candy.

Larson is the owner of a home in Eagle City,Iowa.He put the home on the market for sale.His good friend Bill,an attorney,came to look at the home for the purpose of possible purchase or rental.Bill noticed a crack in the ceiling and inquired about it to Larson.Larson informed Bill that there had been a water leakage problem in the area but it had been fixed two years ago and had not leaked since.Bill proceeded to make a written offer on the house which was accepted in writing by Larson the next day.On the day prior to closing the transaction,Bill went to the residence to make a final inspection.During the inspection,Bill observed water leaking through another crack in a ceiling of the house and in the garage.On the next day,Bill informed the real estate agent that he was rescinding the contract because of the leaks.Larson subsequently rented the property to another party.A couple of months later,Larson filed a suit seeking a court order to make Bill purchase the house or in the alternative for money damages.Bill defended by claiming that Larson either defrauded him or there was a mutual mistake and asked for the return of his earnest money and/or damages for fraud.The trial court found there was no evidence to find fraud on the part of Larson because the roof had been previously fixed and the two parties had been good friends.However,the trial court held that there was a mutual mistake of fact.What is the law with regard to mistakes? Was Bill under a duty to hire his own inspector to inspect the roof? What is the appropriate remedy when a court concludes that there has been a mutual or bilateral mistake of material fact?

If a salesperson says,"This is a great car," but the car turns out to be a lemon,the salesperson has committed fraud.

To be valid,an agreement not to compete must be ancillary to a legitimate bargain.