hapter 15


3. Promises made in conspirator of marriage. After twenty-nine years of marriage, Robert and Mary Lou Tuttle were divorced. They admitted in court that before they were married, they had signed a prenuptial agreement and had agreed on its general term that each would keep his or her own property and anything derived from that property. But a copy of the prenuptial agreement could not be found. Can the court enforce the agreement without a writing? Why or why not? (see the statues of frauds- writing requirements).


5. The parol evidence rule. Evangel Temple Assembly of God leased a facility from Wood Care Centers, Inc., to house evacuees who had lost their home in a hurricane. The lease agreement stated that Evangel could end the least at any time by giving notice and paying 10 percent of the rent that would otherwise have been paid over the rest of the term. The lease agreement also stated that if the facility did not retain its tax exemption which was granted to it on Evangel’s behalf as  a church Evangel could end the lease without making the 10 present payment. Is parol evidence admissible to interpret this lease? Why or why not? ( see the parol evidence rule).


Chapter 16


3.Third Party beneficiary. David and Sandra Dess contracted with Sirva Relocation, LLC, to assist in selling their home. In the contract, the Desses agreed to disclose all information about the property on which Sirva “and other prospective buyers may rely in deciding whether and on what terms to purchase the Property.” The Kincaids contracted with Sirva to buy the house. After closing, they discovered dampness in the walls, defective and rotten windows, mold, and other undisclosed problems. Can the Kincaids bring action against the Desses for breach of their contract with Sirva? Why or why not? ( see third party beneficiaries)


5. Duties that cannot be delegated. Bruce Albea Contracting, Inc., the contractor on a highway project, subcontracted the asphalt work to APAC-Southeast, Inc. the contract prohibited delegation without Albea’s consent. In mid-project, APAC delegated its duties to Matthews Contracting Co. Albea allowed Matthews to finish the work. But Alea did not pay APAC for its work on the projects, arguing that APAC had violated the anti-delegation clause, rendering their contract void. Is Albea correct? Explain. (see assignments and delegations).


Chapter 17


3. Specific performance. Russ Wyant owned Humble Ranch in South Dakota. Edward Humble was Wyant’s uncle and held a two-year option to buy a ranch from Wyant. The option included specific conditions. Once it was exercised, for instance, the parties had thirty days to enter into a purchase agreement and the seller could become the buyer’s lender by matching the terms of the proposed financing. After the option was exercised, Wyant and Humble engaged in a lengthy negotiations. Humble, however, did not respond to Wyant’s proposed purchase agreement nor did Humble advise him of available financing terms before the option expired. Six month later, Humble field a suit against Wyant to enforce the option. Is Humble entitled to specific performance? Explain. (see contract remedies)


5. Liquidated Damages. Planned Pethood Plus, Inc. (PPP), a veterinary clinic, borrowed $389,000 from KeyBank. The term of the loan was ten years. A “prepayment penalty” clause provided a formula to add an amount to the balance due if PP offered to repay its loan early. The additional amount depended on the time of the prepayment. Such clauses are common in loan agreements. After one year, PPP offered to pay its loan. KeyBank applied the formula to add $40,525.92 to the balance due. Is this a penalty or liquidation damages? Explain. ( see contract remedies)



Chapter 18


3. The statute of frauds. Kendall Gardener agreed to buy from James Bowen and Richard Cagle- doing business as B&C Shavings- a specially built shaving mill to produce wood shaving for poultry processors. B&C sent an invoice to Gardner reflecting a purchase price of $86,200, with a 30 percent down payment and the “balance due before shipment.” Gardener paid the down payment. B&C finished the mill and wrote a Gardener a little, telling him “to pay balance due or you will lose the down payment.” By then Gardener had lost his customer for the wood shaving and could not pay the balance due. He asked for the return of his down payment. Did these parties have an enforceable contract under the Statute of Frauds? Explain. (See sales and lease contracts.)


5. Offer and acceptance. Continental Insurance Co. issued a policy to cover shipments by Oakley fertilizer, Inc. Oakley agreed to ship three thousand tons of fertilizer to Ameropa North America on barges. Oakley sent Ameropa a contract that state Oakley would be responsible for any damage of the goods until Ameropa paid for them.  Ameropa e-mailed a different form that indicated that Ameropa would be responsible for any damages once the fertilizer was loaded onto barges. The cargo was loaded onto barges but had not been paid for when it was damage in a hurricane. Oakley field a claim for the loss. Continental dined coverage on the basis of Ameropa’s form. Is Continental correct? Explain. (See sales and lease contracts.)



Chapter 19

3. Risk of loss. Ethicon, Inc., entered into an agreement with UPS Supply Chain Solutions Inc., to transport pharmaceuticals. Under a contract with UPS’s subsidiary, Worldwide Dedicated Services, drivers were provided by International Management Services Co. during transport of a shipment from Ethicons’s facility in Texas to buyers “F.O.B Tennessee,” on of the trucks collied with a concrete barrier, damaging the goods. Who was liable for the loss, and why? (see risk of Loss).


5. Goods held by the seller or lessor. Douglas Singletary bought a manufactured home from Andy’s Mobil home and Land Sales. The contract stated that the buyer accepted the home “as is where is.” Singletary paid the full price, and his crew began to ready the home to relocate it to his property. The night before the home was to be moved, however, it was destroyed by fire. Who suffered the loss? Explain. (see risk of loss).



Chapter 20


3. The right of rejection. Erb Poultry, Inc., is a distributor of fresh poultry products in Lima, Ohio. CEME, LLC, does business as Bank Shots, a restaurant, in Trotwood, Ohio. CEME order chicken wings and “dippers” from Erb, which were delivered and for which CEME issued a check in payment. A few days later, CEME stopped payment on the check. When contacted by Erb, CEME alleged that the products were beyond their freshness date, mangled, spoiled and the wrong size. CEME did not provide any evidence to support the claim or arrange to return the products. Is CEME entitled to a full refund of the amount paid for the chicken? Explain. (See remedies of the buyer or lessee).


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