Unconscionability Self-Quiz

 

 

 

 

 

Ben and Jerry own an ice cream manufacturing plant in Vermont, where there are only two dairy farms that produce enough milk to fill Ben and Jerry’s needs. For years, Ben and Jerry have been buying their milk and cream from Slumberland Farms. However, an epidemic has recently killed 90% of Slumberland’s cows and they have gone out of business. Desperate to stay in business, Ben and Jerry turn to Moo Juice, the other dairy farm in the area, for their milk and cream. Seeing that Ben and Jerry are desperate, Moo Juice agrees to sell cream to Ben and Jerry for 50 cents a gallon and milk for $7 per gallon. The market price for cream is 45 cents per gallon and the market price for milk is $1 per gallon. Having no choice, Ben and Jerry agree. However, when Moo Juice makes the first delivery, Ben and Jerry refuse to accept the milk. Moo Juice immediately sues for breach of contract. Ben and Jerry argue that the contract is unconscionable. The court finds that the contract is unconscionable and Ben and Jerry request that the court either 1) void the whole contract, 2) void the contract but only as far as the sale of the milk, or 3) uphold the entire contract but modify the unconscionable element of it so that they can pay a more reasonable price for the milk. The court will be able to enact:
Choice 1 1 or 2 but not 3
Choice 2 1 but not 2 or 3
Choice 3 2 but not 1 or 3
Choice 4 1, 2 or 3

College Painters, Inc. is a house painting company staffed and run by college students from Boston College. The company has just signed a contract with Howard, a private homeowner, to paint his house. The contract states that the company will paint the house white with blue trim and Howard will pay the company $10,000 for the job. Howard takes the contract to read it over and slips in a clause stating that he will not have to pay the company until one year after the job has been finished. The company does not notice the clause until after they have signed the contract but before they have begun painting. After they notice the clause, the company calls Howard and tells him that they will not be painting his house. Howard immediately sues the company. The company will probably:
Choice 1 Win, because they are entitled to get paid immediately
Choice 2 Win, because the clause was unfairly surprising
Choice 3 Lose, because they should have read the contract carefully before signing it
Choice 4 Lose, because the contract still requires that they get paid
Moo Juice is a dairy farm that has been the exclusive supplier of milk and cream to Eddie’s Ice Cream for several years. Moo Juice’s sales to Eddie have accounted for 95% of Moo Juice’s business. Recently, Eddie’s has gone out of business and Moo Juice is desperate to find a new company to buy their milk and cream. Ben and Jerry own an ice cream manufacturing plant in Vermont and Moo Juice approaches Ben and Jerry about becoming their new milk supplier. Ben and Jerry tell Moo Juice that they will buy all the cream they need from Moo Juice at 50 cents per gallon and all the milk they need from Moo Juice at $1 per gallon. The market prices for cream and milk are 60 cents per gallon and $1.10 per gallon respectively. Ben and Jerry tell Moo Juice that they will not negotiate on the price and that Moo Juice can either take the offer or leave it. Moo Juice immediately signs the agreement. Later, Moo Juice finds out that Ben and Jerry inserted a provision into the contract that defers their duty to pay Moo Juice for one year. Moo Juice refuses to deliver to Ben and Jerry and Ben and Jerry sue Moo Juice for breach of contract. Ben and Jerry will probably:
Choice 1 Lose, because the clause deferring payment was unfairly surprising
Choice 2 Lose, because they are paying below market value for the milk and cream
Choice 3 Win, but they will have to pay for the milk and cream immediately
Choice 4 Win, because Moo Juice might have signed the contract anyway
Ben and Jerry sign a contract under which Moo Juice will ship them 10,000 gallons of milk per month for two years and Ben and Jerry will pay $1 per month for the milk. Ben and Jerry insist on putting a clause in the contract insulating themselves from liability if they intentionally breach the contract. The day before the first delivery is due, Ben and Jerry inform Moo Juice that they will not be buying milk from them. Moo Juice immediately sues Ben and Jerry. Ben and Jerry will probably:
Choice 1 Win, because the clause insulating them was valid so they did not have to honor the contract
Choice 2 Win, because the clause insulating them from liability was unconscionable so the contract is void
Choice 3 Lose, because they did not give Moo Juice enough warning that they were going to breach the contract
Choice 4 Lose, because the rest of the contract is valid even though the clause insulating them from liability is unconscionable and will not be enforced

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