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Business Law Chapter 16 Homework Benson Permitted Two Years Submit The Report

Page Count
9 pages
Word Count
4405 words
Book Title
Business Law: Text and Cases 14th Edition
Authors
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
1
CHAPTER 16
THE WRITING REQUIREMENT
IN OUR DIGITAL WORLD
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 16.1LEGAL REASONING QUESTIONS
1. Why does the Statute of Frauds require that a contract for a sale of land contain a
sufficient description of the property? A contract for a sale of land is not enforceable unless
it is in writing. Land is real property and includes all physical objects that are permanently
attached to it, such as buildings. Generally, a contract for a sale of land is enforceable under the
Statute of Frauds if the contract describes the property being transferred with sufficient
definiteness for it to be identified.
2. How did the court construe the deed and the contract in this caseas one instrument
or as separate documents? Why? In the Sloop case, the court construed the deed and the
contract executed by Sloop and the Kikers as one instrument.
Sloop argued that the contract did not satisfy the Statute of Fraudsit did not identify the
3. What effect did the court’s construction of the deed and the contract have on the
outcome in this case? Explain. In the Sloop case, the court construed the deed and the
contract executed by Sloop and the Kikers as one instrument. The effect of this construction
was an outcome in favor of the sellers. The court enforced the contract and its provision for the
buyer’s forfeit of the down payment.
CASE 16.2CRITICAL THINKING
LEGAL ENVIRONMENT
What circumstance in this case demonstrates most strongly that Pacific did not truly
believe that it did not have a contract with NYKCool? Explain. One circumstance in this
case that shows most strongly Pacific did not really believe there was no contract between it
and NYKCool is that Pacific enjoyed the benefits of NYKCool's performance for almost four
years beyond the term of the written contract. That performance included weekly loadings of
cargo totaling nearly 30 million export boxes of fruit and freight payment exceeding $70 million.
CHAPTER 16: THE WRITING REQUIREMENT IN OUR DIGITAL WORLD 3
4 UNIT THREE: CONTRACTS AND E-CONTRACTS
ECONOMIC
How can a carrier avoid losses under a contract that obligates it only to transport cargo
one way and not on the return voyage? A carrier can avoid losing money under a contract
that obligates it only to transport cargo from one location to another but not on the return voyage
by making agreements with other parties to fill the ships for the return. This logistical tactic is
CASE 16.3CRITICAL THINKING
ECONOMIC
How does the parol evidence rule save time and money for the parties to a dispute and
the court that hears it? Discuss. Under the parol evidence rule, a court determines the
admissibility at trial of evidence outside a written contract. If a court finds that a written contract
represents the complete and final statement of the parties’ agreement, the court will not admit
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Statute of Frauds
No, he is not correct. Even if it is unlikely that the nightclub would earn enough profits to pay the
entire loan off within a year, it is possible. The test for determining whether an oral contract is
2A. Writing
No. Although an e-mail would constitute a writing, it still must be signed by the party against
whom enforcement is sought (Lang). Because the e-mail was from Vollmer and not signed by
CHAPTER 16: THE WRITING REQUIREMENT IN OUR DIGITAL WORLD 5
3A. Part performance
In this situation, Vollmer best argument to enforce the contract is partial performance. Lang had
4A. Admission
Admission. She can argue that by not raising the defense of Statute of Frauds in the trial, Lang
essentially admitted to the existence of the contract.
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
Many countries have eliminated the Statute of Frauds except for the sale of real
estate. The United States should do the same. Certainly, unfair situations arise concerning
the enforceability of contracts or contract modifications because they were not evidenced by a
writing or record. By eliminating the defense provided by the Statute of Frauds, there would be
ANSWERS TO ISSUE SPOTTERS
AT THE END OF THE CHAPTER
1A. GamesCo orders $800 worth of game pieces from Midstate Plastic, Inc. Midstate
delivers, and GamesCo pays for, $450 worth. GamesCo then says it wants no more
pieces from Midstate. GamesCo and Midstate have never dealt with each other before
and have nothing in writing. Can Midstate enforce a deal for the full $800? Explain your
answer. No. Under the UCC, a contract for a sale of goods priced at $500 or more must be in
2A. Paula orally agrees to work with Next Corporation in New York City for two years.
Paula moves her family and begins work. Three months later, Paula is fired for no stated
cause. She sues for reinstatement and back pay. Next Corporation argues that there is no
written contract between them. What will the court say? The court might conclude that un-
6 UNIT THREE: CONTRACTS AND E-CONTRACTS
ANSWERS TO BUSINESS SCENARIOS
AT THE END OF THE CHAPTER
16-1A. The one-year rule
Under the Statute of Frauds, any contract that cannot be performed within one year from the
date of entering into the contract (time of acceptance), without breaching the terms, needs a
writing to be enforceable. Under this rule, the following decisions are made:
(a) The one-year period is measured from the day after the contract is made.
Because Benson has the right to begin the one-year contract immediately, it is possible
to perform the contract within one year. Therefore, the contract falls outside the Statute
of Frauds and can be legally enforced without a writing.
16-2A. Collateral promises
In this situation, Mallory becomes what is known as a guarantor on the loan. That is, she
guarantees the hardware store that she will pay for the mower if her brother fails to do so. This
kind of collateral promise, in which the guarantor states that he or she will become responsible
CHAPTER 16: THE WRITING REQUIREMENT IN OUR DIGITAL WORLD 7
ANSWERS TO BUSINESS CASE PROBLEMS
AT THE END OF THE CHAPTER
163A. The parol evidence rule
No. The parol evidence rule prohibits the introduction at trial of evidence of the parties’ prior
negotiations or agreements or contemporaneous oral agreements if that evidence contradicts or
alters the terms of a written contract. The written contract is ordinarily assumed to be the final
embodiment of the parties’ agreement. But when, for example, the terms of a written contract
are ambiguous, evidence is admissible to show the meaning of the terms.
164A. Sufficiency of the writing
Yes. A writing to satisfy the Statute of Frauds can consist of any order confirmation or other
document, alone or in combination with other items, in hard copy or electronic copy, including e-
mail. The item or items need only contain the essential terms of the contract to bind both parties
to the writing. This includes the names of the parties, the subject matter, the consideration, and
165A . BUSINESS CASE PROBLEM WITH SAMPLE ANSWERThe parol evidence rule
Vaks and Mangano may not recover for breach of an oral contract. Under the parol evidence
166A. Promises made in consideration of marriage
No, the court cannot enforce the Tuttles’ prenuptial agreement without a writing. A prenuptial
agreement is an agreement made before marriage that defines each partner's ownership rights
in the other partner's property. A prenuptial agreement must be in writing to be enforceable.
167A. Promises made in consideration of marriage
No, the court did not interpret the Heidens’ prenuptial agreement correctly. A unilateral promise
to make a monetary payment or to give property in consideration of marriage must be in writing.
And this requirement applies to prenuptial agreements, which may define each partner’s
ownership rights in their separate and joint property. In interpreting these agreements, basic
168A. A QUESTION OF ETHICSExceptions to the writing requirement
(a) Yes, the court should enforce Lisa’s promise to transfer half of the income
generated by her mother’s assets before her death and half of those assets after her death to
Lisa’s brother Peter. The facts in the circumstances described in this problem satisfy the
requirements for a cause of action based on a theory of promissory estoppel.
CHAPTER 16: THE WRITING REQUIREMENT IN OUR DIGITAL WORLD 9
An oral contract that is otherwise unenforceable under the Statute of Frauds may be
enforced on a theory of promissory estoppel. In that circumstance, a court will prevent a
promisor from refusing to comply with the terms of a deal that, for example, is not evidenced in
writing. The requirements for the application of this theory include the following:
1. A clear, definite promise.
3. The promisee’s reasonable reliance on the promise, as shown by he or she
taking some action or refraining from acting.
5. Enforcement of the promise to avoid injustice.
In this problem, Madeline Castellotti’s son Peter was going through a divorce from his
then-wife Rea. Madeline wanted to prevent Rea from benefiting from any of Madeline’s assets,
so she removed Peter from her will. This left her daughter Lisa Free as sole beneficiary. Lisa
orally agreed to provide Peter with half of the income generated by the assets after their
mother’s death if his divorce was still pending, and to transfer half of the assets to him after the
divorce was final. In reliance on those promises, Peter agreed to pay the property taxes for the
estate. Madeline died and Peter paid the taxes, but Lisa backed out on the deal.
These facts meet all the requirements for an action based on a theory of promissory
estoppel. There was an unambiguous promise by Lisa to provide Peter with half of the income
generated by the assets during the pendency of Peter’s divorce, and to transfer half of the
assets on the finality of the divorce. Peter reasonably and detrimentally relied on those promises
(b) Peter’s failure to disclose his ultimate right to receive half of the assets of
Madeline’s estate in the future could have impacted the financial issues in his divorce from Rea.
Rea would not have been entitled to a simple half of Peter’s sharean inheritance is generally
considered to be a spouse’s separate property. But if Rea had known that Peter would later
10 UNIT THREE: CONTRACTS AND E-CONTRACTS
ANSWERS TO LEGAL REASONING GROUP ACTIVITY QUESTIONS
AT THE END OF THE CHAPTER
1610A. The writing requirement
(a) The parties had an enforceable contract. Meade would not have to prove the
existence of a contract, despite its terms being part of an oral agreement, becausebased on

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