Exam 7: An Introduction to Contracts

Mookie, a professional baseball player, negotiated with the Soxville Eagles for a one-year contract. He was given one week to consider the offer and was to sign it by the opening day of the season, one week away. Mookie, in the meantime, was offered a better contract with the Baxton Bulldogs, which he accepted. On opening day, Mookie walked onto the field in the uniform of Baxton. Soxville can sue Mookie for a breach of contract.

Skinny You is a new "weight loss pill." It is being sold by the company; Skinny Products Inc. Advertisements were placed in the back of Teen Beauty magazine that provided potential consumers with information about the success rate of the pills-"Weight Loss of 10 pounds in 10 days if used as instructed." Skinny Products Inc. guaranteed the weight loss by saying that if customers did not lose 10 pounds in 10 days then they would receive $100. To increase consumer confidence of the money being paid Skinny Products Inc. stated that it had put money in trust. Latisha purchased Skinny You and used it for 10 days, as instructed, but only lost 4 pounds. Can she sue Skinny Products Inc. for breach of contract?

Giardetti, a retailer, placed an advertisement in a local newspaper on May 5^th that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10^th at a sale price of $100 each. Regular price $199. First come, first served!" Don was the 10^th customer in the store on May 10^th, but Giardetti refused to sell him a TV set for $100. The advertisement is not an offer because Giardetti did not express the intention to be bound by the statements in the advertisement.

George was an independent salesman, working sales territories in which various manufacturers did not maintain sales agents. Prior to a trip to Northern Manitoba, George informed a manufacturer of small electrical generators he expected to secure an order for fifty generators on this trip. From a more remote community, George was able to send a fax to the manufacturer which, when received, read "Send by air immediately the generators. Must be here by next Thursday." The fax should have read, "three generators" and the mistake was made solely by the fax office. The manufacturer sent fifty generators. Aside from the fact that one of the parties may have a remedy against the fax office, discuss the relevant principles of contract raised here, and determine whether there was no contract, a contract for three generators, or a contract for fifty generators.

If GA Stereos sends a fax to Wholesale HiFi Equipment ordering ten car stereos at a particular catalogue price, requesting delivery by courier (or some other means), the fax would not constitute an offer to purchase.

Alliston enters into an agreement with Berkley which, for $2,000, gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000. If he decides to buy, they agree that the $2,000 will be the down payment on the purchase price. This agreement is an option.

John notices while mowing his lawn one summer day that while his neighbour had been on vacation, his hedge had become unkempt. Worried that people might think it were his hedge, John decided to clip the hedge himself. On his return John's neighbour thanked John for the work. Several weeks later the neighbour hired a handyman to do the same job and paid him $50. John would be entitled to payment for subsequent hedge clippings if requested by his neighbour.

Giardetti, a retailer, placed an advertisement in a local newspaper on May 5^th that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10^th at a sale price of $100 each. Regular price $199. First come, first served!" Don was the 10^th customer in the store on May 10^th, but Giardetti refused to sell him a TV set for $100. If Don had seen the notice on the shop door on May 9^th; he could still accept the offer, because the offer was irrevocable.

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. Rahul's offer to buy the canoe from Jones was a genuine expression of his intention to create a legal relationship.

Ian offered to sell his horse to Wanda for $3,500. Wanda wanted to think about it and let Ian know by email. Ian agreed. Wanda emailed Ian at 11:45 that night. What type of contract was formed?

Mary invites some friends to dinner, and they accept. They purchase a much more expensive bottle of wine than they would normally drink and a beautiful bouquet of flowers. Mary calls them two hours before the dinner to tell them she has been invited out by the man of her dreams and is postponing the dinner.

Franklin Motors Ltd. makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co. The law presumes that, unless one of them proves otherwise, they intended this agreement to be a legally binding one.

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200. Jones replied that he would "think about it." Rahul nodded affirmatively. The two then went about their separate business. Later in the day, Rahul met Brown, who also had a canoe for sale, and Rahul offered to purchase Brown's canoe for $175. Brown agreed to sell Rahul his canoe. At 4 p.m. the same afternoon, after Rahul and Brown had made their arrangement, Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe. The contract between Rahul and Brown automatically rescinded the offer which Rahul had made to Jones.

Craig makes an offer to Josie by mail, because she cannot be reached by telephone. She replies by mail, accepting the offer. Canada Post mislays her reply for several weeks. Craig, who has given up waiting to hear from her, has entered into the contract with someone else after waiting for a reasonable time. Josie can sue Craig for breach of contract.