Exceptions to the Mutuality Rule Self-Quiz

 

 

 

 

 

 

Ben and Jerry promise to provide Moo Juice with free advertising on its packaging if Moo Juice delivers ten thousand gallons of milk to Ben and Jerry’s ice cream factory in Vermont by April 1st. Moo Juice makes the delivery on time but Ben and Jerry refuse to put Moo Juice’s logo on their ice cream containers. Moo Juice sues Ben and Jerry to enforce their contract. Ben and Jerry argue that the contract was unenforceable in that there was no mutuality because Moo Juice did not have to deliver the milk if they didn’t want to. Ben and Jerry will probably:
Choice 1 Win, because Moo Juice did not have to deliver the milk if it chose not to
Choice 2 Win, because free advertising for ten thousand gallons of milk is not a fair deal
Choice 3 Lose, because Ben and Jerry could have gotten their milk from somewhere else
Choice 4 Lose, because mutuality is not required in unilateral contracts

 

Ben and Jerry have opened a successful chain of ice cream stores throughout the United States. Hearing that Ben and Jerry are looking for a new milk supplier and knowing that being a supplier for Ben and Jerry would give them valuable exposure, Moo Juice approaches Ben and Jerry with an offer to become their new milk supplier. Moo Juice and Ben and Jerry enter into a contract under which Moo Juice promises to supply Ben and Jerry with all of the milk they need for $1 per gallon for a period of seven years and Ben and Jerry promise to buy all of the milk they need from Moo Juice at $1 per gallon for the same period of seven years. However, the contract also states that Ben and Jerry can terminate the contract at any time and for any reason, so long as they give Moo Juice one week notice. One week after the parties enter the contract, an epidemic of Mad Cow Disease breaks out, wiping out a large portion of the dairy industry. The price of milk spikes to $4 per gallon. Because of the increase in price, Moo Juice refuses to sell milk to Ben and Jerry at their agreed price. Ben and Jerry sue Moo Juice, and Moo Juice argues that there is no mutuality because they are bound for seven years while Ben and Jerry can get out of the contract after a week. Ben and Jerry will probably win:
True
False
Simon, a record producer, signs Kelly, a seventeen year old lounge singer, to a deal in which he will pay her $5 million and she will record three albums for his label. After the first album fails to sell, Simon tries to terminate the contract. Simon argues that there was no mutuality because, since Kelly is a minor, the contract is voidable. Simon will probably:
Choice 1 Win, because Kelly is a minor
Choice 2 Win, because the first album failed to sell
Choice 3 Lose, because the contract is valid as long as Kelly wants it to be
Choice 4 Lose, because the failure of the first album doesn’t mean the next album will fail.
Simon promises Kelly that he will sign her to a record deal if he ever starts his own record label. One year later, Simon starts his own label but refuses to sign Kelly. Kelly sues Simon. Simon argues that there was no mutuality in their agreement because Kelly never gave Simon a promise or an act in return for his promise. Simon will probably Win the case:
True
False
Ben and Jerry, the owners of an ice cream factory promise Dell Woods, the owner of the Moo Juice Dairy farm that if Dell provides Ben and Jerry with ten thousand gallons of milk per year, Ben and Jerry will either give Dell free advertising space on their packaging, give Dell all the free ice cream he wants or provide Dell with twenty pounds of the finest marijuana from their “special” farm in Vermont. The agreement states that Ben and Jerry can choose which of the three payment options they will make. Ben and Jerry and Moo Juice have an enforceable contract:
True
False
Ben and Jerry, the owners of an ice cream factory promise Dell Woods, the owner of the Moo Juice Dairy farm that if Dell provides Ben and Jerry with ten thousand gallons of milk per year, Ben and Jerry will either give Dell free advertising space on their packaging, give Dell all the free ice cream he wants or provide Dell with twenty pounds of the finest marijuana from their “special” farm in Vermont. The agreement states that Moo Juice can choose which of the three payment options they will accept. Ben and Jerry and Moo Juice have an enforceable contract:
True
False
Ben and Jerry have opened a successful chain of ice cream stores throughout the United States. Hearing that Ben and Jerry are looking for a new milk supplier and knowing that being a supplier for Ben and Jerry would give them valuable exposure, Moo Juice approaches Ben and Jerry with an offer to become their new milk supplier. Moo Juice and Ben and Jerry enter into a contract under which Moo Juice promises to sell Ben and Jerry milk for $1 per gallon for a period of seven years and Ben and Jerry promise to buy all of the milk they need from Moo Juice for the same period of seven years. One week after the parties enter the contract, an epidemic of Mad Cow Disease breaks out, wiping out a large portion of the dairy industry. The price of milk spikes to $4 per gallon. Because of the increase in price, Moo Juice refuses to sell milk to Ben and Jerry at their agreed price. Ben and Jerry sue Moo Juice, and Moo Juice argues that there is no mutuality because, if Ben and Jerry do not need any milk, they are not required to buy anything from Moo Juice. Ben and Jerry will probably win:
True
False
Ben and Jerry have opened a successful chain of ice cream stores throughout the United States. Hearing that Ben and Jerry are looking for a new milk supplier, Moo Juice approaches Ben and Jerry with an offer to become their new milk supplier. Moo Juice and Ben and Jerry enter into a contract under which Moo Juice promises to sell Ben and Jerry milk for $1 per gallon and Ben and Jerry promise to buy all the milk they need from Moo Juice. Although no specific quantity is set in the contract, Ben and Jerry estimate that they will need one thousand gallons of milk per week. However, when they fill in the quantity of the contract, they state that they will need two thousand gallons of milk per week. Moo Juice refuses to fill the order and Ben and Jerry sue Moo Juice. Ben and Jerry will probably:
Choice 1 Win, because the contract is a requirements contract
Choice 2 Win, because there is mutuality of obligation
Choice 3 Lose, because Ben and Jerry do not have to buy any milk from Moo Juice
Choice 4 Lose, because the stated quantity is far and above the original estimation of Ben and Jerry’s needs

Ben and Jerry have opened a successful chain of ice cream stores throughout the United States. Hearing that Ben and Jerry are looking for a new milk supplier, Moo Juice approaches Ben and Jerry with an offer to become their new milk supplier. Moo Juice and Ben and Jerry enter into a contract under which Moo Juice promises to sell Ben and Jerry milk for $1 per gallon for a period of seven years and Ben and Jerry promise to buy all of the milk they need from Moo Juice for the same period of seven years. One week after the parties enter the contract, an epidemic of Mad Cow Disease breaks out, wiping out a large portion of the dairy industry. Moo Juice’s farms are hit by the epidemic particularly hard and almost 75% of their cows are infected. As a result, Moo Juice is no longer able to meet its customers’ orders and decides to go out of business and salvage whatever assets they can. As a result, Moo Juice cannot honor their contract with Ben and Jerry. Ben and Jerry sue Moo Juice for breach of contract. Ben and Jerry will probably:
Choice 1 Win, because both parties are mutually bound
Choice 2 Win, because the contract contains an implied promise to stay in business
Choice 3 Lose, because Moo Juice is going out of business for reasons that have nothing to do with their contract with Ben and Jerry
Choice 4 Lose, because the epidemic is not Moo Juice’s fault

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