Bargain Promises and the Legal Duty Rule Part I Self-Quiz
Ivan is a Wall Street executive
who has a suite of offices on the twentieth floor of the New York Stock
Exchange building in New York City. Michael is the general supervisor
for Gotham Security, Inc., the security company that guards and monitors
the building. As part of Michael’s job as supervisor, he makes rounds
throughout the building each night at midnight, 2:00 A.M., 4:00 A.M.,
and 6:00 A.M. Although the rounds are thorough, Michael is not required
to actually check each office in the building. Ivan does not like the
fact that his suite of offices is not looked in on every night and he
promises Michael that if Michael looks in on his offices every time he
makes rounds, Ivan will give Michael free investment advice. For the next
several weeks, Michael looks in on Ivan’s offices during each of
his rounds. However, when Michael asks Ivan for investment advice, Ivan
refuses to give it to him. If Michael sues Ivan for breach of contract,
he will probably:
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Ivan is a Wall Street executive
who has a suite of offices on the twentieth floor of the New York Stock
Exchange building in New York City. Michael is the general supervisor
for Gotham Security, Inc., the security company that guards and monitors
the building. As part of Michael’s job as supervisor, he makes rounds
throughout the building each night at midnight, 2:00 A.M., 4:00 A.M.,
and 6:00 A.M. Although the rounds are thorough, Michael is not required
to actually check each office in the building. Ivan does not like the
fact that his suite of offices is not looked in on every night and he
promises Michael that if Michael actually goes into the offices every
time he makes rounds and makes sure that the drawers to all the desks
and file cabinets are locked and the computers are closed, Ivan will give
Michael free investment advice. For the next several weeks, Michael looks
in on Ivan’s offices during each of his rounds. However, when Michael
asks Ivan for investment advice, Ivan refuses to give it to him. If Michael
sues Ivan for breach of contract, he will probably:
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After a long game of tennis
at the gym, Pete and Andre decide to go to the pool and cool off. Andre
doesn’t know how to swim but he likes to wade into the shallow water.
Pete knows that Andre can’t swim bud he decides to play a joke on
Andre. While Andre is standing at the deep end of the pool, Pete pushes
Andre into the water. Andre is having trouble keeping his head above the
water and he begs Pete to help him out of the pool. Pete tells Andre that
he will help him but only if Andre promises to give Pete $1,000. Afraid
that he is going to drown, Andre agrees. After Pete helps Andre out of
the pool, Andre refuses to give Pete the money. If Pete sues Andre to
enforce their agreement, he will probably:
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Tucker is a car buff and
he has designed a special model car that he commissions General Motors
to build for him. G.M agrees to build the car to Tucker’s specifications,
including Tucker’s insistence that the car be painted white with
blue trim, in exchange for $500,000. G.M begins construction on the car
but, before they finish the job, they inform Tucker that they will not
complete construction unless Tucker agrees to pay G.M an additional $100,000.
Tucker agrees and G.M finishes the car. When Tucker takes possession of
the car, he refuses to pay the extra $100,000. If G.M. sues Tucker for
the money, Tucker will probably:
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Tucker is a car buff and
he has designed a special model car that he commissions General Motors
to build for him. G.M. agrees to build the car to Tucker’s specifications,
including Tucker’s insistence that the car be painted white with
blue trim, in exchange for $500,000. G.M begins construction on the car
but, before they finish the job, Tucker informs them that he will pay
an additional $100,000 for G.M to paint the car white with a black trim
instead of a blue trim. G.M agrees and finishes the car. When Tucker takes
possession of the car, he refuses to pay the extra $100,000. If G.M. sues
Tucker for the money, Tucker will probably:
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Tucker is a race car buff
whose life long dream is to race a car in the Daytona 500. Tucker has
designed a special model race car that he commissions General Motors to
build for him. G.M. agrees to build the car to Tucker’s specifications
in exchange for $500,000. One of Tucker’s specifications is that
the car be finished by April 1st so that Tucker can enter it into the
Daytona 500, which will be held on May 1st. G.M begins construction on
the car but, before they finish the job, Tucker’s father, who is
anxious for his son to be able to fulfill his dream, informs G.M. that
he will pay an additional $100,000 for G.M to finish the car by April
1st. G.M agrees and finishes the car. When Tucker takes possession of
the car, his father refuses to pay the extra $100,000. If G.M. sues Tucker’s
father for the money, they will probably:
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American Beef is a meat packing
company that gets a lot of its meat from England. On January 1st, 2003,
American and English Beef, an English meat packing company, enter into
a contract where American agrees to buy ten thousand pounds of beef from
English for $4 per pound, to be delivered to American on February 1st.
On January 10th, the United States government lifts a three year old ban
on importing English beef. The ban had been put in place because of Mad
Cow Disease fears. On January 15th, American agrees to pay $6 per pound
for the ten thousand pounds of beef it had ordered from English. When
the beef arrives, American pays $4 per pound and refuses to pay English
the other $2 per pound. If English sues American, they will probably:
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American Beef is a meat
packing company that gets a lot of its meat from England. On January 1st,
2003, American and English Beef, an English meat packing company, enter
into a contract where American agrees to buy ten thousand pounds of beef
from English for $4 per pound, to be delivered to American on February
1st. On January 10th, the English government announces that there has
been an outbreak of Mad Cow Disease that has infected 40% of the meat
packing industry. Because of the shortage of healthy cows, English has
a very difficult time filling its customers’ orders. As a result,
English must raise its prices to $9 per pound in order to stay in business.
American and English modify their contract so that English will send American
ten thousand pounds of beef and American will pay $9 per pound. After
English sends the beef, American pays $4 per pound and refuses to pay
the other $5 per pound. If English sues American, they will probably:
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Tony and Cornelius decide
to open a cereal factory in their hometown in Michigan. On March 1st,
2003, Tony and Cornelius hire Bob the Builder to build the factory. They
tell Bob that they would like to open the business on January 1st, 2004
and that they will pay him $5 million to have the factory finished by
December 15th 2003. Bob begins construction but, on April 1st, he tells
Tony and Cornelius that he will not finish the factory on time unless
they agree to pay him an additional $2 million. At this point, it is still
early enough in the project that Tony and Cornelius could find another
contractor if they chose to and still have the factory finished by December
15th, 2003. However, they decide to keep Bob and they pay him the extra
$2 million he is demanding. Bob finishes the factory by December 15th,
as the contract required him to do. On December 16th, Tony and Cornelius
sue Bob to get the extra $2 million back, arguing that there was no new
consideration for their giving Bob the extra money since they received
the same service that they had already contracted for in return. Tony
and Cornelius will win this suit and recover the extra $2 million dollars
they paid Bob:
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Tony and Cornelius decide
to open a cereal factory in their hometown in Michigan. On March 1st,
2003, Tony and Cornelius hire Bob the Builder to build the factory. They
tell Bob that they would like to open the business on January 1st, 2004
and that they will pay him $5 million to have the factory finished by
December 15th 2003. Bob begins construction but, on November 15th, he
tells Tony and Cornelius that he will not finish the factory on time unless
they agree to pay him an additional $2 million. At this point, it will
be prohibitively expensive to find another contractor and still have the
factory finished by December 15th, 2003. Further, any delay in opening
the factory will cost Tony and Cornelius hundreds of thousands of dollars.
Having no choice, Tony and Cornelius pay Bob the extra $2 million he is
demanding. Bob finishes the factory by December 15th, as the contract
required him to do. On December 16th, Tony and Cornelius sue Bob to get
the extra $2 million back, arguing that there was no new consideration
for their giving Bob the extra money since they received the same service
that they had already contracted for in return. Tony and Cornelius will
win this suit and recover the extra $2 million dollars they paid Bob:
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