Midterm Exam #2
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It is understood by the student whose Student Number is
entered below that this examination is given and the
student’s response is made and submitted pursuant to
conditions of the Honor Code.
Student Exam No. ________________
UNIVERSITY OF MISSOURI-KANSAS CITY
SCHOOL OF LAW
LAW #8501
Professor Timothy Lynch
Contracts I
Fall 2021
M
IDTERM
E
XAMINATION
#2
Wednesday, November 10, 2021
8:00 AM – 9:40 AM (100 minutes)
Thompson Courtroom and Viewing Gallery
This is a closed-book exam. No reference materials may be used during this exam. This exam consists of 7 pages.
Instructions:
1.
You may type your answers using Exam360 or write your answers in a blue book. Do not
write your
answers in this test booklet.
2.
Write your student exam number in the line provided in the upper-right hand corner of this cover
page.
3.
You only have one hour and forty minutes to complete this exam.
4.
This is a closed-book exam.
5.
There are 9 questions on this exam. The point total for each question is written at the beginning of
each question. There are 100 total points available. 6.
If you think you need additional information to answer the question, state what that
information is and how it would affect your answer.
7.
The text of UCC §§ 2-206 and 2-207 (“Offer and Acceptance in Formation of Contract” and
“Additional Terms in Acceptance or Confirmation”) is reprinted at the end of this exam.
8.
At the conclusion of this exam, please hand in your answer, this exam booklet, and any scratch paper
you used. Your midterm exam number must
be included on the exam booklet, blue book(s), and any
scratch paper used.
9.
Good luck!
DO NOT TURN THE PAGE UNTIL INSTRUCTED TO DO SO!
LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
Question #1
(25 points)
Professor Lynch texts you the following message: “Hey, my favorite student! I am hosting a very
important dinner party tomorrow evening and it is vital that my house look fantastic. I thought I would
be back in town today and that I could cut my grass, but I have been delayed until tomorrow
midafternoon. I am desperately looking for someone to cut my grass before tomorrow night. If you do
it, I will pay you $50.”
You do not text Professor Lynch back or communicate back in any way. But you do start to cut his grass
the next morning. You only get halfway done with the lawn before stopping. (You forgot that you had a
very important Torts exam to prepare for and decided to study for that instead of finishing Professor
Lynch’s lawn.)
Professor Lynch arrives home at 3:00 p.m. that day, but he doesn’t have enough time to finish cutting
the grass. He has to cook a gourmet dinner.
As a result, the lawn looks terrible when Professor Lynch’s very important and fancy guests arrive that
evening. Lynch tries to laugh it off by telling his guests that his Contracts students are “not very good at
contracts.” His guests, quicker than he is, flip it immediately, teasing him that he “must not be very
good at teaching contracts.” Lynch is pissed off and sues you for breach of contract.
You finish cutting the grass the morning after the dinner party.
Was there a contract? If so, did you breach the contract? Since you finished cutting the grass, does
Professor Lynch owe you $50?
2
LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
Please use the following scenario for Questions 2 and 3:
ACME Enterprises, Inc. (“ACME”) manufactures and sells anvils. It sells a wide variety of anvils, small
ones of lower quality for less than $100 each to large, higher quality ones for up to $3,000 each.
W. E. Coyote, Co. (“Coyote”) was interested in buying five VB345 anvils (11.5 inch tall, 300 lb., horn-
style) from ACME, which ACME advertises for $999 each. Coyote telephoned ACME’s automatic
telephone ordering service and placed an order for five VB345 anvils. Coyote paid for the anvils in full
($4,995 plus sales tax and shipping and handling charges) using the telephone service’s automatic
payment service. The telephone ordering service automatically generated an order confirmation
number for Coyote.
At no point in the telephone transaction was there any discussion of warranties, waiver of liabilities,
dispute settlement processes, or governing law.
Later that same day, ACME sent Coyote an email which stated, “This is a confirmation of your order of
five VB345 anvils. We expect to ship your order to you within the next three days, and you can expect
to receive your order within fourteen business days.” Additionally, the email contained a list of “Terms
of Sale,” and within that list were the following statements:
“ACME is not responsible for any injuries or damage sustained as a result of mishandling ACME’s
products, including injuries or damage sustained from dropping the product on any person or on
any thing.”
“Any dispute between ACME Enterprise, Inc. and the Buyer shall not be submitted to judicial
dispute settlement processes. Any dispute that requires third-party disposition shall be referred
to arbitration in accordance with the rules of the American Arbitration Association.”
“The interpretation and enforcement of this contract shall be governed by the laws of the State
of Arizona.”
Question #2
(20 points)
[The following facts are only relevant for Question #2, not Question #3.]
Thirteen days after receiving the email, Coyote received the anvils (and retaining bolts). A month later,
one of the retaining bolts holding one of the anvils to one of Coyote’s support pedestals broke and the
anvil fell off the pedestal and onto a Coyote employee’s foot, shattering his foot.
Coyote asked ACME to compensate Coyote for the workplace injury caused by the falling anvil, but
ACME refused. Coyote then filed a lawsuit in court against ACME.
If ACME asks the court to dismiss the lawsuit, declaring that the parties agreed to forgo the judicial
system and instead arbitrate their disputes, should the court dismiss the lawsuit? (Please note that US
courts almost always enforce agreements to arbitrate.)
3
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LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
Question #3
(15 points)
[Ignore the facts given in Question #2. Consider the following facts instead.] Nineteen days after receiving the email, Coyote received five anvils from ACME. But the anvils were not
VB345 anvils. They were VB300 horn-style anvils. VB300 anvils are 10 inches tall and weigh 275 pounds
each. There was a message in the delivery from AMCE which read as follows: “These anvils are not the
VB345 anvils you ordered, but we no longer carry VB345 anvils and are offering you these VB300 anvils
as an accommodation to you. Since VB300 anvils are less expensive than VB345 anvils, we have
reimbursed your account for the difference in price.”
Is there is a sales contract? If so, is ACME in breach of contract?
4
LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
Please use the following scenario for Questions #4 through #9:
Shane is a 17-year-old boy who looks like a 28-year-old man, but he is of average height and a little scrawny. He marches into a used car dealership where there are three salesmen and demands to buy a white 2010 Corvette that is sitting on the lot. The car is being advertised for $40,000. But Shane demands that they sell it to him for $3,000. The salesmen tell him that they will not sell it to him for anything less than $40,000. After all, they say, the car is “in excellent shape” since it “only has 15,000 miles” of wear and tear on it, and “drives like a dream.” Plus, it is “really sexy.” Shane gets visibly angry and tells them that it “is in their best interests” to sell it to him for $3,000. The salesmen laugh at Shane’s audacity. Shane is now quite angry and feels humiliated. Then Shane tells them that he has a pair of brass knuckles in his pocket and that he will “beat the s@#t out of them” if they don’t sell him the car for $3,000. He screams at them, “I swear I will break each of your skulls if you don’t do what I tell you!”
As a result of these threats and not wanting to have the s@#t beat out of them or their skulls broken, the salesmen relent and agree to sell Shane the car for $3,000. Shane pays them in cash and speeds off saying, “It’s been a pleasure doing business with you, my fair gentlemen.”
The Corvette actually had 30,000 miles on it.
For Questions # 4, 5, and 6, assume the car dealership later sues Shane demanding the court either rescind the sale or order Shane to pay the dealership an additional $37,000 for the car.
Question #4
(5 points)
Act as the dealership’s lawyer and argue that that the court should rescind the sale or order Shane to pay the dealership an additional $37,000.
Question #5
(5 points)
Act as Shane’s lawyer and argue that that the court should not rescind the sale and should not order Shane to pay the dealership any more money at all.
Question #6
(10 points)
Act as the judge. (Assume there is no jury.) Answer the following questions:
What questions would you like answered before rendering a decision?
Based on what you know, what are the strongest and weakest arguments presented by each side’s lawyers?
Based on what you know, what decision(s) should you render and why?
5
LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
For Questions # 7, 8 and 9, assume instead
that Shane drives the car in many street drag races over the course of the next two months and generally rides the car very hard. After those two months, the car suffers a catastrophic mechanical breakdown. Shane returns to the dealership and demands his money back.
Question #7
(5 points)
Act as Shane’s lawyer and argue that that the court should order the car dealership to return Shane’s money.
Question #8
(5 points)
Act as the dealership’s lawyer and argue that that the court should not order the dealership to return Shane’s money.
Question #9
(10 points)
Act as the judge. (Assume there is no jury). Answer the following questions:
What questions would you like answered before rendering a decision?
Based on what you know, what are the strongest and weakest arguments presented by each side’s lawyers?
Based on what you know, what decision(s) should you render and why?
E
ND
OF
E
XAMINATION
6
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LAW 8501 Contracts I
Professor Lynch
Midterm #1
Fall 2021
Text of select UCC provisions:
UCC § 2-206. Offer and Acceptance in Formation of Contract.
(1)
Unless otherwise unambiguously indicated by the language or circumstances
a.
an offer to make a contract shall be construed as inviting acceptance in any
manner and by any medium reasonable in the circumstances;
b.
an order or other offer to buy goods for prompt or current shipment shall be
construed as inviting acceptance either by a prompt promise to ship or by the
prompt or current shipment of conforming or non-conforming goods, but such a
shipment of non-conforming goods does not constitute an acceptance if the seller
seasonably notifies the buyer that the shipment is offered only as an
accommodation to the buyer.
(2) Where the beginning of a requested performance is a reasonable mode of acceptance
an offeror who is not notified of acceptance within a reasonable time may treat the offer
as having lapsed before acceptance.
UCC § 2-207. Additional Terms in Acceptance or Confirmation
.
(1) A definite and seasonable expression of acceptance or a written confirmation which is
sent within a reasonable time operates as an acceptance even though it states terms
additional to or different from those offered or agreed upon, unless acceptance is
expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract.
Between merchants such terms become part of the contract unless:
a.
the offer expressly limits acceptance to the terms of the offer;
b.
they materially alter it; or
c.
notification of objection to them has already been given or is given with a
reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to
establish a contract for sale although the writings of the parties do not otherwise
establish a contract. In such case the terms of the particular contract consist of those
terms on which the writing of the parties agree, together with any supplementary terms
incorporated under and other provisions of this Act.
7