Midterm Exam #1

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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 #1 Friday, October 1, 2021 8:00 AM – 9:40 AM (100 minutes) Thompson Courtroom This is a closed-book exam. No reference materials may be used during this exam. This exam consists of 4 pages. Instructions: 1. You may type your answers using Exam 360 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 eight 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. 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. 8. Good luck! DO NOT TURN THE PAGE UNTIL INSTRUCTED TO DO SO!
LAW 8501 Contracts I Professor Lynch Midterm #1 Fall 2021 Question #1 (15 points) On January 10, Tiffany contracted with Steve to sell Steve 100 metric tons of polystyrene for $100,000 ($1,000/metric ton). 1 Delivery was supposed to occur on May 1 of that year, at which time Steve would have to pay the $100,000 price. However, as of April 1, the market price of polystyrene had risen to $1,700/metric ton (or $170,000 for 100 metric tons). As a result, Tiffany decided she would make a lot more money by selling her polystyrene to someone who would pay more money than she would receive from Steve. She found a buyer, Tommy, who was willing to pay $180,000 for her polystyrene. But she is worried that breaking her contract with Steve would get her in trouble, so she comes to you for advice. You are not her attorney since you are only a first-year law student, but you have taken five weeks of Contracts class. Advise Tiffany on what she should do and what consequences she would face if she sold her 100 tons of polystyrene to Tommy instead of Steve. Assume that if she sold her 100 tons of polystyrene to Tommy, she would no longer have any polystyrene to sell to Steve and would not be able to acquire any more by May 1 to sell to Steve since there isn’t much polystyrene available on the market. You should also assume that the market price of polystyrene will remain stable at $1,700/metric ton for the rest of the year. Advise Tiffany. (For purposes of answering this question, ignore any additional facts in Question #3.) Question #2 (10 points) In the scenario in Question #1 above, does any consideration support Tiffany’s promise to sell Steve 100 metric tons of polystyrene? If so, what is it? Question #3 (10 points) Refer to Question #1 again. Imagine that on April 2, Tiffany approaches Steve and asks that he pay more for the 100 tons of polystyrene. Imagine she asks to change the price to $1,700/ton. Steve refuses and tells her that it is not his fault that the market price of polystyrene went up so much since they made their agreement. But she begs and hints that she may sell the polystyrene to Tommy instead. Steve needs the polystyrene since he has a contractual obligation to sell it to a third party on June 1 for $1,300/ton. Finally, Steve agrees to pay Tiffany $1,400/ton for the polystyrene. On May 1, Tiffany delivers 100 tons of polystyrene to Steve who only pays her $100,000 for it. He refuses to pay the extra $400/ton that he promised he’d pay. Tiffany sues Steve for the additional $400/ton. Should the court enforce Steve’s promise to pay the extra $400/ton? Why or why not? 1 Polystyrene is a synthetic polymer made from styrene monomer, which is a liquid petrochemical. Polystyrene is used to make Styrofoam. 2
LAW 8501 Contracts I Professor Lynch Midterm #1 Fall 2021 Question #4 (10 points) Professor Lynch agreed that he would mow your lawn every week for the entire summer for $50 per week. You agreed to this great deal. It’s particularly great because Professor Lynch is excellent at cutting grass. But just weeks before the summer starts, Professor Lynch tell you that he no longer wants to mow your lawn. He tells you he’s “just ever so very busy teaching the nuances of ‘the Law’ to the masses” that he is just too busy. Besides, as he tells you, you are just a 1L and 1L’s “don’t need nicely mowed lawns.” So he’s out. (So note that Professor Lynch has repudiated the contract. In other words, you can treat this as a complete breach.) You’re pissed off at Professor Lynch and his arrogant and condescending attitude, and you decide you are going to sue him for all he’s worth. How can a Contracts professor just breach his contract?!? Meanwhile you hire Professor Rostron instead to mow your lawn once a week for the duration of the summer. Professor Rostron is kind-hearted and believes everyone deserves to have a nicely mowed lawn. Plus, Professor Rostron is even better at cutting grass than Professor Lynch. Plus, Professor Rostron agrees to mow your lawn for only $40/week! So you’re pretty psyched about that! Professor Lynch breached the contract with you. You sue him. What should the remedy be? Question #5 (10 points) I have a friend who is a real derelict. His name is Jody. I care about Jody, but I am so worried about him because he is always robbing banks. He just won’t stop. I am worried that he will end up in jail or will get shot by the cops or a hero bank teller. I told Jody that I will pay him $5,000 if he refrains from robbing banks for the next six months. In response, Jody musters all the will power he has and refrains from robbing banks for those six months. Afterwards, he come to me and asks for the $5,000. (You can assume that he has proof that he didn’t rob any banks during those six months.) Do I have a contractual obligation to pay Jody? More specifically, is my promise to pay him $5,000 supported by consideration? Why or why not? 3
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