Friday, June 1, 2007

Tricky, Tricky: Contracts-PMBR Red Book 50-100

Tricks and twists from the second 50 contracts practice questions (I'm working backward from 100):

Q98. Get the parties straight when you're looking for consideration. Ashburn did deliver some performance to Craig, but it was legally required by a pre-existing duty, so not operative as consideration.

Q95. In parol evidence questions, be mindful of the call of the question's statement of the purpose for which the evidence is being used. Here the question says the evidence is being used to show a separate, prior oral agreement. It's not being introduced to clear up ambiguity as to the meaning of "production fee clause" so answers A & B are wrong. Answer C is wrong because it states the law but doesn't apply it to the facts.

Q93. With long calls and fact patterns, don't forget to go back to the original fact pattern and look for clues. Here, the contract itself required modifications be in writing. Apparently, the sof under the ucc is unclear re applicability to modifications. (look this up?)

Q88. Damages for personal injuries arising under a contract must be of a type foreseeable when the parties entered the agreement and will run only to parties and intended beneficiaries (and assignees?).

Q82. Temporary impracticability of performance on a personal service contract due to health will suspend contractual duties but not discharge them.

Q76. If the fact pattern asks you to assume away any violation of public policy, obey. Promisee's main purpose = key to finding 3rd party intended beneficiary.

Q73. A divisible contract is one in which the parties have divided their respective performances into separate units, so that performance of an installment on one side entitles such party to the other's performance of that installment. Employment contracts are divisible contracts.

Q65. Most states require the promise to pay a contractual debt barred by the statute of limitations to be in a signed writing. New consideration is NOT required.

Q58-59. I got hung up on restitution issues. But here's the key: if the subject matter was goods, and they have been damaged or depreciated, the restitution obligation extends no further than returning them "as now." Hence the answer to Q58 is nothing because the ratification of the contract by the new adult was conditional on a condition precedent that his finances improve (and they did not). He would need to (theoretically) return the damaged car (which is worth nothing). If his finances change, his ratification is effective and he would need to pay 10K.

Q56-57. The recital of receipt of consideration questions in the PMBR materials are baffling me. There's nothing in the outline on this and the answers to the questions on the topic skip over this issue entirely. Here's what I can glean: theoretically, you need to actually pay the $1 for it to be valid consideration. BUT, evidence that the $1 was not paid is not admissible under the parol evidence rule; and, even if plaintiff admits that the nominal consideration did not pass, defendant will still not prevail because he was under a duty of good faith and fair dealing not to revoke the option without demanding payment of the consideration for the option. Yikes, this is wacky. Combine this with the result in Q42 and I'm feeling a bit more comfortable that my 1L notes are correct when they say: written recital of receipt of consideration for the option is sufficient to support the enforceability of the option.

Q53. Bad question? The answer given to this question contradicts answer given on the PMBR contracts lecture CD. The esteemed professor on the tapes says, if only one element of the promise constitutes legal detriment, that's sufficient consideration to support enforcement of the whole deal. Here, Marty promised not to smoke marijuana AND not to drink beer on weeknights. Marty had no legal privilege to smoke weed, but he did have a privilege to drink beer unless he was some sort of wunderkind who went to law school before his 21st birthday. His promise not to drink beer is sufficient legal detriment to support the whole deal. The answer explanation only mentions marijuana and ignores the beer forbearance. What's up? Am I wrong here?

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