Contract Obligations

Reflect on the assigned readings for the week. Identify what you thought was the most important concept(s), method(s), the term(s), and/or any other thing that you felt was worthy of your understanding.

Also, provide a graduate-level response to each of the following questions:

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  1. Discuss the various defences in contract formation, stating what is required to establish each individual defence, and providing examples of when the defence may be found valid.
  2. Sly Salesperson sells cars.  While selling a car, Sly Salesperson tells the potential buyer that “this is the best car around.  It’s a great car and sips gas.”  The car has an average fuel rating.  Has Sly Salesperson committed a misrepresentation?  Fraud?  Why or why not?  Does the analysis change if Sly Salesperson says the car get 40 miles per gallon, but in fact, the car only gets 30 miles per gallon?

Short Essay:

The question I – Claire is severely injured in a car accident.  The local hospital cannot treat Claire’s injuries.  In order to survive, Claire must be flown via helicopter to a hospital in a bordering state.  Prior to boarding the helicopter, Claire signs a contract obligating her to pay for the helicopter flight and all of its expenses.  Claire lives and fully recovers.  However, she is being sued by the helicopter company in the amount of $50,000 for helicopter transportation and its accompanying expenses.  What is argument Claire could make in order to rescind the agreement?  Does it matter that the helicopter company performed its obligation under the contract?

Question II – Sheila Seller and Bobby Buyer enter into a contract where Bobby agrees to buy widgets for $0.10/unit at 500 units per shipment.  The contract states that there shall be a minimum of 6 shipments between the parties.  Bobby’s payments are late on the first 3 shipments, and Bobby does not make the payment on the 4th shipment.  In the parties’ contract is a liquidation clause, which states that if either side is unable to perform his or her duties under the contract, then the other party shall receive damages in the amount of $100,000.  Should the court enforce this liquidated damages clause?

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