Exam 10: The Requirements of Form,writing and Privacy

Ravi,an art collector,had been made a standing offer by a gallery to purchase one of his paintings for $150,000.At shows and luncheons of the art community he had previously rejected the entreaties,knowing the painting to be worth at least twice as much.On the latest occasion of a luncheon at which Ravi was deliver an art commentary to the guests,the gallery made its offer once more.To himself,Ravi considered the offer and concluded he could use the charitable tax relief that such a sale at a loss would generate.In the course of his speech,he acknowledged and accepted the offer.Two days later,Ravi's lawyer advised him that the purchasing gallery was NOT a charitable foundation,and no tax deduction for such a "donation" could be expected.Ravi then refused to sell the painting to the gallery.On the strength of the verbal agreement of purchase and sale made in the presence of witnesses,the gallery sued Ravi for breach of contract,and for a decree of specific performance to compel Ravi to sell it the painting.The verbal agreement is valid and enforceable if the witnesses testify in court that an agreement of purchase and sale was made.

Raimondo has been named as executor of his father's estate.Raimondo's father was a very wealthy man who had made a lot of money in real estate and then reinvested his money in mutual funds and other long-term investments.This left few of his finances in a position to be quickly liquidated.Since his father's death,bills have been piling up and creditors are starting to knock on his door.Raimondo has decided that,because there is no way to utilize his father's money in the near future,he will pay the debts out of his own pocket,and be reimbursed later from his father's estate.Raimondo is allowed to do this,but must clearly state the intention in writing as outlined in the Statute of Frauds.

Audrey agrees verbally to do some repair work on the retaining walls in Douglas's terraced gardens.After she has turned down another contract from someone else,Douglas tells her he has changed his mind.It is now too late to get the other contract.Since the contract concerning the work on Douglas's land was a verbal one,Audrey cannot enforce it due to the Statute of Frauds.

Joyce's son,Al,borrowed money from Verity Finance.He lost his job last month and has not made the latest payment on the debt.When Verity's collections department telephones,Joyce answers the phone.She agrees to make the payments if Al does not because she is worried about his state of mind due to his job loss.If Verity,without Joyce's knowledge,extends the time Al has to make the payments but increases the interest rate by ½%,because he explains about his job loss,they could no longer enforce Joyce's promise,regardless of whether or not it was in writing and signed by her.

In the presence of several witnesses,A verbally agreed to purchase B's farm for $175,000.The next day,B changed his mind,and refused to sell the farm to A.On the strength of the verbal agreement of purchase and sale made in the presence of witnesses,A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm.B may successfully plead the Statute of Frauds as a defence.

Martin enters into a verbal contract with Marlowe Ltd.to investigate their operations and their accounting systems,make recommendations as to how to improve them,and help implement the changes Marlowe Ltd.accepts.In the negotiations,Martin makes it clear that he cannot give Marlowe Ltd.a definite timetable and that it is clear that the whole process will take longer than a year.Part of their agreement is that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily.In this situation,

In the presence of several witnesses,A verbally agreed to purchase B's farm for $175,000.The next day,B changed his mind,and refused to sell the farm to A.On the strength of the verbal agreement of purchase and sale made in the presence of witnesses,A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm.The verbal agreement is void.

The parol evidence rule

The Consumer Protection Act says that the parties to a contract must each have a copy of the contract or it will not be enforceable.Tim and Tess go to the Rapacious Furniture Co.to buy a couch.They have saved $500 from their salaries as employees in a sheltered workshop for the developmentally handicapped and do not intend to spend more than that,but the salesman takes advantage of their slower thought processes to fast-talk them into a couch which costs $1,200,the balance of which they must pay for in installments of $50 per month,a sum which is really beyond their means.Having read a book on contract law,the salesman makes sure that all the formalities are followed when Tim and Tess sign the contract,and he makes sure he gives the couple one copy of the contract and keeps one for Rapacious' files.Tim and Tess realize later that day that they cannot afford the couch and they ask Rapacious to tear up the contract.They are upset to find out that the furniture salesman will not do so.Can you advise them of any way out?

Painter and Hawe discussed the possibility of Hawe entering the employ of Painter as the general manager of Painter's firm.A written contract was prepared and signed by the parties on December 1^st,1989.The contract provided for a salary of $3,000 per month,and specified that the contract was to run for a period of two years from January 2^nd,1990.On December 28^th,1989,Painter notified Hawe that he was cancelling the contract.Hawe sued Painter immediately.When Painter cancelled the contract,Hawe was released from his obligation to perform.