Directions: Read each scenario and decide whether the contract is valid or invalid. Provide an explanation (at least one paragraph) based on information learned in Chapters 11 13, 14, 18, 19. Each response is worth 5 points, should be created in a
, and are graded as follows:
Excellent (5 points)
– all questions provided in the scenario are answered, professionally written, and supported by information obtained in the textbook or through valid research.
Above Average (4 points)
– all questions provided in the scenario are answered, contains few spelling/grammar errors, and are supported by information obtained from the textbook or valid research.
Average (3 points)
-some questions provided in the scenario are addressed, may contain few spelling/grammar error, but may be lacking support from information obtained from the textbook or valid research.
Below Average (2 points)
– responses to questions in the scenario were ambiguous, contains several spelling/grammar errors, and/or is not supported by information obtained from the textbook or valid research.
Needs Major Improvement (1 point)
– response does not address the questions in the scenario, contains several spelling/grammar errors, and/or is not supported by information obtained from the textbook or valid research.
Dan, who is 17 years old but looks like 20 years old, signs a contract for a $1,000 MP3 Player and Speaker Dock from Cascade Sound. The contract requires him to put $300 down and pay $50 monthly. He puts his $300 down and after two weeks decides he wants out of the contract. Can he legally do this? Explain your reasoning.
Constance enters into an agreement to purchase Geralds business. The contract contains a calculation for the businesss cash on hand at the time of sale to be added to the purchase price. Constance and Gerald did not pick up on the calculation error at the time of signing the agreement. The week prior to closing, Constances attorney caught the error, which causes a huge increase in the calculated value of the business. Gerald wants to hold Constance to the dramatically increased price, as she signed the contract containing the calculation error. What are Constances options?
Juanita, who is 15 years old, buys a life insurance policy so that if she dies, her parents will receive $100,000. The contract requires her to pay $20 per month. She pays this every month until she is 17. Now she decides to get out of the contract and wants all her money back. Can she do this? Give your reasons.
Michael, age 16, is a star baseball player at his high school. A baseball scout for a professional baseball team approached Michael and proposed that Michael sign a contract to play for the team he represents. To encourage Michael to sign, he gives Michael a new car. Michael signs the contract. Later, Michael realizes that this will deprive him of his amateur status. Michael now wishes to get out of the contract. Can he do this? Explain your reasoning.
Jemi, who is 17 years old, agrees with a married couple unable to have children, to be artificially inseminated and to bear a child for the couple. The couple will pay all expenses of pregnancy, actual medical expenses, and attorney fees to draft the contract to establish that the child produced will belong to the married couple. Jemi signs such a contract, is impregnated, and now changes her mind and wants out of the contract. Can she do this? Explain your reasoning.
You are the Chief Operating Officer of Littleco. Over lunch, the President of Bigco offers to sell Littleco a piece of fully depreciated manufacturing equipment you need for your production line for $1,000. You tell the President of Bigco that you will buy it, and you shake on it. The Bigco President later changes his mind and decides to keep the equipment. Littleco sues Bigco for breach of contract. Assume that the Uniform Commercial Code does not apply.
1. What remedies can Littleco seek against Bigco?
2. What defenses can Bigco assert?
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