FYLSX Contract Formation Principles 5 — Questions and Answers
Question 1: Karen advertises a reward of $200 for the return of her lost dog. Leo, unaware of the reward, finds and returns the dog. Can Leo claim the reward?
- Yes, because he performed the requested act.
- No, because he did not know about the offer when he performed. (Correct answer)
- Yes, because good deeds are always compensated in law.
- No, because reward offers require written acceptance.
Correct answer: No, because he did not know about the offer when he performed.
A person who performs the requested act without knowledge of the reward offer cannot accept an offer they didn't know existed, so no contract is formed.
Question 2: Mark and Nancy form a contract for the sale of Nancy's land. No price is stated. Under common law, this contract is:
- Valid because courts will fill in a reasonable price.
- Unenforceable because price is an essential term that must be agreed upon. (Correct answer)
- Valid because the UCC allows courts to supply missing terms.
- Unenforceable only if the land is worth more than $500.
Correct answer: Unenforceable because price is an essential term that must be agreed upon.
Under common law, a contract for the sale of land must include a price; without it, a material term is missing and the contract fails.
Question 3: Oscar sends Patrice an offer by email. Patrice sends her rejection by email (received Monday) but then sends her acceptance by mail (dispatched Sunday). Which communication controls?
- The rejection controls because it was received first. (Correct answer)
- The acceptance controls because it was dispatched first under the mailbox rule.
- Neither controls; the offer has lapsed.
- The rejection controls because it was sent in the same medium as the offer.
Correct answer: The rejection controls because it was received first.
When a rejection is received before an acceptance is received, the rejection controls, even if the acceptance was dispatched first.
Question 4: Quinn, a contractor, begins building a deck for Rita based on preliminary discussions but before a formal contract is signed. Rita later refuses to pay. Quinn's best claim is:
- Breach of an express contract.
- Unjust enrichment or quasi-contract to recover the reasonable value of services. (Correct answer)
- Promissory estoppel based on the preliminary discussions.
- Negligence because Rita allowed work to begin.
Correct answer: Unjust enrichment or quasi-contract to recover the reasonable value of services.
Quasi-contract (unjust enrichment) allows recovery for the reasonable value of services when one party would be unjustly enriched by retaining benefits without paying.
Question 5: Steve and Tracy agree that Steve will perform landscaping services 'for a fair price to be determined later.' A dispute arises. Under contract law, this agreement is:
- Enforceable because the parties clearly intended to be bound.
- Unenforceable as an agreement to agree, with no definite price term. (Correct answer)
- Enforceable because courts will supply a reasonable price.
- Enforceable only if Steve completes all the work first.
Correct answer: Unenforceable as an agreement to agree, with no definite price term.
An 'agreement to agree' on an essential term like price is too indefinite to be enforceable under common law.
Question 6: Under the UCC, when merchants exchange forms with different terms (the 'battle of the forms'), the general rule is:
- The last form sent controls under the last-shot doctrine.
- A contract is formed and conflicting terms drop out, replaced by UCC gap-fillers. (Correct answer)
- The offeror's terms always prevail.
- No contract is formed when forms contain different terms.
Correct answer: A contract is formed and conflicting terms drop out, replaced by UCC gap-fillers.
Under UCC § 2-207, a contract is formed despite differing terms; conflicting terms cancel out and UCC gap-filler provisions apply.
Question 7: Uma and Victor enter a contract that is legal when formed but becomes illegal due to a change in law before performance. The contract is:
- Still enforceable because it was legal when made.
- Discharged because subsequent illegality makes performance impossible as a matter of law. (Correct answer)
- Voidable at Uma's option because she was unaware of the legal change.
- Void from inception because courts read current law into all contracts.
Correct answer: Discharged because subsequent illegality makes performance impossible as a matter of law.
Subsequent illegality is a form of impossibility that discharges both parties' obligations under the contract.
FYLSX Contract Formation Principles 5
Karen advertises a reward of $200 for the return of her lost dog.
Leo, unaware of the reward, finds and returns the dog.
Can Leo claim the reward?