BUSINESS LAW

CASES AND PROBLEMS SUPPLEMENT

KURT M. SAUNDERS
PROFESSOR OF BUSINESS LAW
CALIFORNIA STATE UNIVERSITY, NORTHRIDGE

COPYRIGHT © KURT M. SAUNDERS

 NATURE OF LAW

NATURE OF LAW DISCUSSION PROBLEMS

1. Suppose that the U.S. Congress passes a federal statute that is inconsistent with a
state constitutional provision. Which prevails?

2. Contributory negligence occurs when the failure of an injured plaintiff to act

carefully is a contributory factor in causing the injury he or she suffered. Which decision
is considered binding authority on whether the contributory negligence of a plaintiff
prevents him or her from recovering damages in a negligence suit in Nevada?

a. A 2010 Nevada state trial court decision finding that contributory negligence of a
plaintiff prevents recovery by the plaintiff in a negligence suit.

b. A 2009 federal Ninth Circuit Court of Appeals decision deciding that contributory
negligence of a plaintiff prevents recovery by the plaintiff in a negligence suit.

c. A 1999 Nevada Supreme Court decision finding that contributory negligence of a

plaintiff does not prevent recovery by the plaintiff in a negligence suit.

Does your answer change if in 1989 the Nevada legislature enacted a statute stating
deciding that contributory negligence of a plaintiff prevents recovery by the plaintiff in a
negligence suit?

3. A regulation issued by the Hawaii Department of Consumer Protection allows

consumers to return any type of defective “consumer product” for a full refund within three
years after purchase. A statute enacted by the Hawaii legislature allows a purchaser of
defective “motor vehicle” to return it for a full refund within one year after purchase.
Which law applies to a consumer who seeks to return a defective automobile two years
after purchase? Which law applies to a consumer who seeks to return a defective
motorcycle two years after purchase?

4. A trial court in Illinois is deciding a case involving an issue that has never been
addressed before in that state’s courts. The Iowa Supreme Court, however, recently
decided a very similar case involving the same issue. Is the Illinois trial court required to
follow the Iowa Supreme Court’s decision on the issue?

5. The legislature of the state of Alaska enacted the following statute: “A seller of an
automobile shall provide the buyer a written statement of its correct mileage. Any person
who buys an automobile and does not receive a written mileage statement from the seller
may sue the seller for damages and to cancel the contract.” Is this statute a civil law or a
criminal law?

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 RESOLUTION OF PRIVATE DISPUTES
STATE AND FEDERAL COURT SYSTEMS

STATE COURT FEDERAL COURT

SYSTEM SYSTEM
LAW ATTORNEYS*

TRIAL COURT DISTRICT COURT

INTERMEDIATE COURT OF
APPEALS COURT APPEALS

STATE SUPREME UNITED STATES

COURT SUPREME COURT

CIRCUITS OF THE FEDERAL COURTS OF APPEALS

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 FEDERAL AND STATE COURT JURISDICTION

Federal Court State Court

Federal Question Jurisdiction

(claim arises under U.S.
Constitution or federal statute)
Civil, Criminal, Family,
Subject Matter or Probate, Traffic, Small
Jurisdiction Diversity Jurisdiction Claims courts, etc.
(diversity of state citizenship +
more than $75,000 amount in
controversy)

State Long Arm Statute State Long Arm Statute

Personal
+ +
Jurisdiction
Minimum Contacts Minimum Contacts

COURSE OF A CIVIL ACTION

PRETRIAL APPEAL
PLEADINGS DISCOVERY TRIAL JUDGMENT
CONFERENCE

MOTION TO SUMMARY POST TRIAL

SETTLEMENT
DISMISS JUDGMENT MOTIONS

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 HERTZ CORP. v. FRIEND
559 U.S. 77 (2010)

Hertz Corporation was incorporated in Delaware and has its corporate

headquarters in New Jersey. Although Hertz operates in 44 states, California has the
highest percentage of its rental facilities, vehicle transactions, revenues generated, and
employees. In 2007, Melinda Friend and John Nhieu, residents of California, filed a class
action against Hertz in a California state court, alleging that Hertz had violated state wage
and hour laws. Hertz sought to remove the case to a federal district court based on
diversity-of-citizenship subject matter jurisdiction. Hertz claimed that it and the plaintiffs
were citizens of different states. Friend and Nhieu argued that there was no diversity
jurisdiction because Hertz was also a citizen of California since its principal place of
business was in California and not New Jersey. The federal district court agreed and
remanded the case to the state trial court. The U.S. Court of Appeals for the Ninth Circuit
affirmed the decision, but the Supreme Court granted review to decide how to determine
the citizenship of a corporation.

Breyer, Justice. The federal diversity not simply an office where the
jurisdiction statute provides that “a corporation holds its board meetings (for
corporation shall be deemed to be a example, attended by directors and
citizen of any State by which it has been officers who have traveled there for the
incorporated and of the State where it has occasion). …
its principal place of business.” … If a A corporation’s “nerve center,”
corporation’s headquarters and executive usually its main headquarters, is a single
offices [is] in the same State in which it place. The public often (though not
did most of its business, the … “principal always) considers it the corporation’s
place of business” [is] located in that main place of business. … We recognize
State. as well that, under the “nerve center” test
But suppose those corporate … there will be hard cases. For example,
headquarters, including executive offices, in this era of telecommuting, some
are in one State, while the corporation’s corporations may divide their command
plants or other centers of business activity and coordinating functions among
are located in other States? … We officers who work at several different
conclude that “principal place of locations, perhaps communicating over
business” is best read as referring to the the Internet. That said, our test
place where a corporation’s officers nonetheless points courts in a single
direct, control, and coordinate the direction, towards the center of overall
corporation’s activities. It is the place direction, control, and coordination.
that [can be] called the corporation’s [The facts] suggest that Hertz’s center
“nerve center.” And in practice it should of direction, control, and coordination, its
normally be the place where the “nerve center,” and its corporate
corporation maintains its headquarters – headquarters are one and the same, and
provided that the headquarters is the they are located in New Jersey, not in
actual center of direction, control, and California. Judgment vacated and
coordination, i.e., the “nerve center,” and remanded for further proceedings.

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 BUTLER v. BEER ACROSS AMERICA
83 F. Supp.2d 1261 (N.D. Ala. 2000)

Hunter Butler, a minor, was at home unsupervised while his parents were on
vacation. Using a credit card issued in his own name, he ordered twelve bottles of beer
for $24.95 from the website of Beer Across America, a microbrewery club and Illinois
corporation. The Beer Across America website was accessible to Alabama residents, and
the beer was shipped from Illinois, where the order was received, to the Butlers’ home in
Alabama. An Alabama statute provided for a civil action by the parent of a minor against
anyone who knowingly and illegally sells alcohol to a minor. After Hunter’s mother, Lynda
Butler, returned home and found several bottles of beer from the shipment remaining in
the family’s refrigerator, she sued Beer Across America in an Alabama state trial court.
Beer Across America owned no property in Alabama, had no offices or sales agents there,
and did not advertise there. In addition, sales by Beer Across America to Alabama
residents represented a small percentage of its total revenue. Based on diversity of
citizenship, Beer Across America removed the case to a U.S. district court in Alabama and
then filed a motion to dismiss the action for lack of personal (in personam) jurisdiction.

Hancock, District Judge. [This case nature of such conduct and connections
presents] the following question: whether may support either general or specific
personal jurisdiction properly may be jurisdiction. General jurisdiction may be
asserted by a federal court sitting in exercised when a defendant’s contacts
diversity in Alabama over a nonresident with the forum are sufficiently numerous,
Illinois defendant in an action arising purposeful, and continuous, as to render
from a sale made in Illinois solely in fair an assertion of power over the
response to an order placed by an defendant by that state’s courts no matter
Alabama resident via the Internet? … the nature or extent of the relationship to
[T]he Court [applies a] multi-part the forum entailed in the particular
analysis [to answer] this question. The litigation; if general jurisdiction is
first part of the analysis requires a established, absolutely no connection
consideration of state law because the need be shown between the state and the
reach of a federal diversity court’s claim for the defendant to be summoned
jurisdictional power over a nonresident constitutionally before that forum’s
defendant may not exceed the limits courts. In contrast, specific jurisdiction
allowed under state law. If a basis for may be based upon less extensive
personal jurisdiction is found under the contacts, but jurisdiction will lie only in
state’s long arm statute, the court then those matters which are related to or
conducts a two-part due process analysis. which arise from those contacts.
[T]he court initially must determine Regardless of the specific or general
whether at least minimum contacts exist nature of the contacts in question, for
between the defendant and the purposes of satisfying due process, they
jurisdiction. The significant question is must be purposeful on the part of the
whether “the defendant’s conduct and defendant; “it is essential in each case that
connection with the forum State are such there be some act by which the defendant
that he should reasonably anticipate being purposefully avails itself of the privilege
haled into court there”? The level and of conducting activities within the forum

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State, thus invoking the benefits and Consequently, the reach of Alabama’s
protection of its laws.” ... long arm jurisdiction extends to the full
However, even if minimum contacts limits of federal due process. ...
are found, the court must still address the
second prong of the due process analysis. General Jurisdiction
... [A] nonresident defendant must “have
certain minimum contacts with [the To support general jurisdiction, the
forum] such that maintenance of the suit plaintiff cites not only the sale to her son
does not offend ‘traditional notions of fair but also the defendants’ sales (in Illinois)
play and substantial justice.’” [T]he court to other Alabama residents as well as the
will examine the nature of the sale of beer to defendants by two
defendant’s contacts with the forum in Alabama brewers through a non-party
light of additional factors, including the Illinois wholesaler. However, the
burdens on the defendant of litigating in plaintiff has not offered any competent
the foreign forum; the interests of the evidence to seriously controvert the
forum state in overseeing the litigation; defendants’ averments that they are not
the interests of the plaintiff in efficient, registered to do business in Alabama; that
substantial relief; the interests of the they own no property in the state; that
interstate judicial system in economical they maintain no offices in the state; that
dispute resolution; and the joint interests they have no agents in Alabama; that their
of the states in promoting basic social key personnel have never even visited the
policies. ... In summary, only if the forum state; and that they do not place
state’s laws permit jurisdiction over the advertisement with Alabama media
nonresident defendant and both prongs of outlets (except for what nationally placed
the due process inquiry are satisfied may advertisements may reach the state) or
that defendant constitutionally be haled engage in any other significant
into the forum state’s courts. … promotions targeting the state, which
would rise to such a level as would justify
Alabama’s Long Arm Statute an exercise of general jurisdiction by this
state’s courts. What plaintiff has offered
The Alabama long arm statute is simply not sufficient to conclude that
provides, in part, as follows: [this court has general jurisdiction over]
A person has sufficient contacts with Beer Across America … .
the state when that person ...
otherwise having some minimum Specific Jurisdiction
contact with this state and, under the
circumstances, it is fair and Although specific jurisdiction
reasonable to require the person to presents a different question, the ultimate
come to this state to defend an action answer is the same. ... Here, Beer Across
... so long as the prosecution of the America does not advertise with local or
action against a person in this state is regional media specifically targeting the
not inconsistent with the constitution Alabama market, and plaintiff’s son was
of this state or the Constitution of the never directly solicited by defendants by
United States. any means prior to placing his order. …
Beer Across America did not enter into
any continuing relationship with

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plaintiff’s son, but rather made a single interaction. Applying these principles to
sale amounting to $24.95. The the present case, clearly Beer Across
defendants’ total sales, including America’s site does not even anticipate
nonalcoholic merchandise, to Alabama the regular exchange of information
residents for use in the state represent, on across the Internet, much less provide for
average, only a few hundred orders per such interaction. Rather, it is closer to an
year, … with Internet orders … electronic version of a postal reply card;
accounting for a mere three to four the limited degree of interactivity
percent of that total. available on the defendants’ website is
certainly insufficient to satisfy the
Online Contacts minimum contacts requirement of due
process for this Court to exercise personal
That plaintiff’s son’s order was placed jurisdiction over these defendants.
over Beer Across America’s Internet site Furthermore, considerations of “fair
… warrants some additional play and substantial justice” do not
consideration. … [J]urisdiction is proper support personal jurisdiction over the
when the “defendant clearly does nonresident defendants in this action. …
business over the Internet by entering into Although Alabama has a legitimate
contracts with residents of other states interest in protecting its residents, it has
which ‘involve the knowing and repeated no interest in effectively regulating out-
transmission of computer files over the of-state sales of alcohol. Similarly,
Internet ... .’” In personam jurisdiction is plaintiff claims no actual injuries but
improper, however, when the nonresident merely seeks to punish and deter
defendant has established a passive defendants, yet the state of Illinois has
Internet site, which acts as little more criminal and administrative procedures in
than an electronic billboard for the place to accomplish the same task. ...
posting of information. Between those In conclusion, the … defendants lack
two extremes lies a gray area “where a minimum contacts with Alabama and
defendant has a website that allows a user considerations of fairness and substantial
to exchange information with a host justice do not favor an assertion of
computer”; there, the determination turns personal jurisdiction by this Court. Case
on the nature of the information transferred to a federal district court
transmitted and on the degree of in Illinois.

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 STATE LONG ARM STATUTES

California Long Arm Statute

A court of this state may exercise jurisdiction on any basis not inconsistent
with the Constitution of this state or of the United States.

Illinois Long Arm Statute

Any person, whether or not a citizen or resident of this State, who in person
or through an agent does any of the acts hereinafter enumerated, thereby submits
such person, and, if an individual, his or her personal representative, to the
jurisdiction of the courts of this State as to any cause of action arising from the
doing of any of such acts:
(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State;
(3) The ownership, use, or possession of any real estate situated in this State;
(4) Contracting to insure any person, property or risk located within this State at
the time of contracting; ...

Florida Long Arm Statute

Any person, whether or not a citizen or resident of this state, who personally
or through an agent does any of the acts enumerated in this subsection thereby
submits himself or herself and, if he or she is a natural person, his or her personal
representative to the jurisdiction of the courts of this state for any cause of action
arising from the doing of any of the following acts:
(a) Operating, conducting, engaging in, or carrying on a business or business
venture in this state or having an office or agency in this state.
(b) Committing a tortious act within this state.
(c) Owning, using, possessing, or holding a mortgage or other lien on any real
property within this state.
(d) Contracting to insure any person, property, or risk located within this state at
the time of contracting. ...
(f) Causing injury to persons or property within this state arising out of an act or
omission by the defendant outside this state ...
(g) Breaching a contract in this state by failing to perform acts required by the
contract to be performed in this state ... .

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 FORUM SELECTION CLAUSES

FACEBOOK

You will resolve any claim, cause of action or dispute (claim) you have with
us arising out of or relating to this Statement or Facebook exclusively in a state or
federal court located in Santa Clara County. The laws of the State of California
will govern this Statement, as well as any claim that might arise between you and
us, without regard to conflict of law provisions. You agree to submit to the personal
jurisdiction of the courts located in Santa Clara County, California for the purpose
of litigating all such claims.

EBAY

Unless you and we agree otherwise, you agree that any claim or dispute
that has arisen or may arise between you and eBay must be resolved exclusively
by a state or federal court located in Salt Lake County, Utah. You and eBay agree
to submit to the personal jurisdiction of the courts located within Salt Lake County,
Utah for the purpose of litigating all such claims or disputes.

REDBOX

You agree that jurisdiction over and venue in any legal proceeding directly
or indirectly arising out of or relating to a Redbox platform, the use of access
thereof, or these terms must be in the state or federal courts located in DuPage
County, Illinois and you hereby consent and submit to the exclusive personal
jurisdiction and venue of the courts located in DuPage County, Illinois for any such
legal proceeding.

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 THE COURSE OF A CIVIL ACTION

Paul Parsons is a student at Michigan State University in Kalamazoo, Michigan.

While visiting his family in Champaign, Illinois last winter, he was driving down Main
Street when he was involved in an accident with a car driven by Daniel Dodge, a resident
of Champaign, Illinois. As a result of the accident, Parsons suffered a broken arm, a
sprained neck and back, and various cuts and bruises. His medical bills and the cost of
repairs to his car total $80,000. He has decided to sue Dodge for negligence by filing a
civil action in a Michigan federal district court based on diversity of citizenship.

UNITED STATES DISTRICT COURT FOR THE

WESTERN DIVISION OF MICHIGAN

PAUL PARSONS,
Plaintiff
COMPLAINT
versus
File No. 8675309
DANIEL DODGE,
Defendant

Plaintiff, Paul Parsons, for his complaint, alleges as follows:

1. Plaintiff, Paul Parsons, is a citizen of the State of Michigan.

Defendant, Daniel Dodge, is a citizen of the State of Illinois. The
matter in controversy exceeds $75,000, exclusive of interest and costs.

2. On January 2, 2015, Plaintiff was operating his automobile on Main

Street in Champaign, Illinois.

3. At or about 4:00 PM on that date, an automobile owned and operated

by Defendant negligently collided with Plaintiff’s automobile, causing
damage to Plaintiff’s automobile and injury to Plaintiff’s person.

4. Plaintiff suffered a sprained neck, broken arm, and numerous bruises

and lacerations, and incurred medical expenses in the amount of $70,000.
Plaintiff also incurred damage to his automobile in the amount of $10,000.

WHEREFORE, Plaintiff demands judgment for $80,000, together with

interests and the costs of this action.

After being served with the complaint, he filed an answer and counterclaim against
Parsons. Dodge believes that the collision occurred because Parsons did not stop for a
traffic light. As a result of the accident, Dodge suffered minor injuries and extensive
damage to his car.

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 UNITED STATES DISTRICT COURT FOR THE
WESTERN DIVISION OF MICHIGAN

PAUL PARSONS,
Plaintiff
ANSWER AND COUNTERCLAIM
versus
File No. 8675309
DANIEL DODGE,
Defendant

Defendant, Daniel Dodge, answers the complaint of Plaintiff as

follows:

1. Defendant admits that he is a citizen of Illinois, but denies that

Plaintiff is a citizen of Michigan.

2. Defendant admits that Plaintiff was operating his automobile on

Main Street in Champaign, Illinois.

3. Defendant admits that an automobile owned and operated by Plaintiff

was damaged and that Plaintiff was injured, but denies that Plaintiff and
Defendant negligently collided and that Defendant caused damage to
Plaintiff’s automobile and injury to Plaintiff’s person.

4. Defendant is without knowledge or information with which to answer

paragraph 4.

FIRST DEFENSE – LACK OF SUBJECT MATTER JURISDICTION

5. The court lacks jurisdiction over the subject matter of this action.
Defendant denies that Plaintiff is a citizen of Michigan as alleged in
paragraph 1.

SECOND DEFENSE – CONTRIBUTORY NEGLIGENCE

6. Plaintiff drove his automobile carelessly and recklessly, and that

such careless and reckless operation was the cause of the collision.

COUNTERCLAIM

7. On January 2, 2015, at or about 4:00 PM, an automobile owned and

operated by Plaintiff negligently collided with Defendant’s automobile.

8. As a result of the collision, Defendant’s automobile was damaged

and Defendant suffered numerous bruises and lacerations. Defendant has
incurred expenses for medical treatment and repairs to his automobile inn
the amount of $12,000.

WHEREFORE, Defendant demands judgment for $12,000 against Plaintiff

on the counterclaim, as well as interests and the costs of this action.

Dodge’s attorney believes that Parsons has failed to properly allege a claim for
negligence in his complaint and that Parsons is a citizen of Illinois because Parsons owns
an Illinois driver’s license and resides in Michigan only during the academic term,

12
returning to Illinois during summer breaks to reside with his parents in Champaign.
Dodge’s attorney also believes that the court lacks personal jurisdiction over his client
because the accident occurred in Illinois and because Dodge has never been to Michigan
and maintains no other connections there. Dodge can file a motion to dismiss the suit.

UNITED STATES DISTRICT COURT FOR THE

WESTERN DIVISION OF MICHIGAN

PAUL PARSONS,
Plaintiff
MOTION TO DISMISS
versus
File No. 8675309
DANIEL DODGE,
Defendant

The Defendant moves the court as follows:

1. To dismiss this action because the complaint fails to state a claim

against Defendant upon which relief can be granted.

2. To dismiss this action on the ground that the court lacks subject
matter jurisdiction because there is no diversity of citizenship between
the parties.

3. To dismiss this action on the ground that the court lacks personal
jurisdiction over the Defendant.

Assume that the court denied Dodge’s motion to dismiss and that the discovery
phase of the litigation has begun. Parsons’ attorney has submitted the following set of
interrogatories to Dodge’s attorney.

PLAINTIFF’S INTERROGATORIES TO DEFENDANT

TO: Attorney for Defendant

FROM: Plaintiff

Plaintiff requests that Defendant answer, in writing and under oath,

the following Interrogatories and that a copy of such answers be served
upon the Plaintiff within thirty (30) days after the service of these
Interrogatories.

INTERROGATORIES

1. State your full name, current address, date of birth, social

security number, and employer affiliation and address.

2. Identify any individual that you are aware that has personal
knowledge of the facts and circumstances of this case, including

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eyewitnesses and any individuals who arrived on the scene within two hours
after the occurrence.

3. Please identify the owner and the driver of the vehicle involved in
the accident with the Plaintiff and under what specific circumstances the
driver of the vehicle was permitted to operate the owner’s vehicle on the
date of the accident.

4. Please state where Defendant was heading to and the time of the
accident and where Defendant was coming from and his expected time of
arrival.

5. Please list all accidents involving Defendant, within the past five
(5) years. For each such accident, please include the name and address
of any driver of the vehicle involved, the name and address of any other
driver involved, the court and case number of any action that resulted,
and the result of each such action.

6. State whether Defendant was acting as the agent or employee of

Defendant’s employer at the time of the occurrence.

7. Identify the property damage done to each vehicle as a result of

the accident and which parts of those vehicles were damaged in the
occurrence complained of, the name and address of the person or entity
who repaired each vehicle, and the date and cost of repairs. If the
vehicles have not been repaired, state the present location of said
vehicles, the days of the week, the time of day, and the places they may
currently be seen and identify any photographs of the vehicles involved
in the collision.

8. Please state with specificity exactly how this accident took place
and include in your answer, the date of the accident, the time of the
accident, the location of the accident, where you vehicle was just prior
to the accident, where the Plaintiff’s vehicle was just prior to the
accident, how far away the Plaintiff’s vehicle was just prior to the
impact, the speed of your vehicle just before the accident, the speed of
the Plaintiff’s vehicle just before the accident, the speed of the
vehicles upon impact, and the exact locations in relation to the roadway
upon impact, if this was a chain reaction accident, identify the sequence
of the impacts between the vehicles.

Dodge’s attorney believed that the undisputed facts of the case do not support
Parsons’ claim of negligence against Dodge and filed a motion for summary judgment. A
motion for summary judgment questions whether there are any facts in dispute that would
allow a judgment favorable to the party against whom the motion has been filed. If not,
then the moving party is entitled to the judgment in his or her favor.

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 UNITED STATES DISTRICT COURT FOR THE
WESTERN DIVISION OF MICHIGAN

PAUL PARSONS,
Plaintiff
MOTION FOR SUMMARY JUDGMENT
versus
File No. 8675309
DANIEL DODGE,
Defendant

The Defendant moves the court to grant summary judgment in his favor
on grounds that there is no genuine issue as to any material fact and the
Defendant is entitled to judgment as a matter of law for reasons set forth
more fully in the accompanying memorandum.

Assume that Dodge’s motion for summary judgment was denied by the order of the
court. Following trial, the jury awarded Parsons a verdict in the amount of $80,000, plus
interest and costs on September 5, 2015. Dodge has filed an appeal to the U.S. Court of
Appeals for the Sixth Circuit.

UNITED STATES DISTRICT COURT FOR THE

WESTERN DIVISION OF MICHIGAN

PAUL PARSONS,
Plaintiff.
NOTICE OF APPEAL
versus
File No. 8675309
DANIEL DODGE,
Defendant

Notice is hereby given that Daniel Dodge, defendant, in this case

appeals to the United States Court of Appeals for the Sixth Circuit from
the final judgment entered in this action on September 5, 2015.

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 CIVIL PROCEDURE DISCUSSION QUESTIONS

1. The publisher of a magazine, which is based in California, reprinted numerous

excerpts from a book written by Albert without his permission. Albert wants to sue the
publisher for copyright infringement in violation of the Copyright Act. Should Albert file
suit in a state or federal court in California?

2. A dispute arises over the ownership of a sail boat in dry dock in Fort Lauderdale,
Florida. The boat is owned by an Ohio resident. The other party to the dispute is a resident
of Nebraska. Neither party has sufficient minimum contacts with Florida to be subject to
personal jurisdiction there. Can the case be brought in a Florida state court?

3. Paulo, a resident of New Mexico, while driving through New Mexico was struck
by a SUV driven by Dale, a resident of Arizona. Dale was speeding when the accident
occurred. Paulo’s medical expenses total $70,000 and he wants to recover another $10,000
in attorney’s fees. Can he sue in a federal district court?

4. Porter sues Dawes to obtain title to some land located in Tennessee. Both Dawes
and Porter claim that each owns the land. Dawes has never been to Tennessee and has no
other contacts with the state, and neither has Porter. If Porter files suit in a Tennessee trial
court, can Dawes file a motion to dismiss the case for lack of personal jurisdiction?

5. Perez, a resident of California, has filed suit in a federal district court in California
against Dickinson, a resident of Louisiana, and Dalton, a resident of California, for
$100,000 in damages for breach of contract, a state law claim. Does the court have subject
matter jurisdiction?

6. Poling, a resident of New York, filed negligence suit in federal district court against
Donnelly, a resident of Rhode Island, for $70,000 in damages for personal injuries he
sustained in an automobile accident and for $15,000 for damage to his car. Does the court
have subject matter jurisdiction over the case?

7. Pauline, a resident of Iowa, sued David, a resident of Kansas, in federal district

court for $70,000 for personal injuries she suffered in an automobile accident. In the same
action, Pauline sued Donald, a resident of Missouri, as a co-defendant for $20,000 in
additional damages, claiming that Donald was negligent in treating her injuries. Does the
court have subject matter jurisdiction over the case?

8. After being passed over for a promotion, Carol Gafford, a citizen of Kentucky, filed
a gender discrimination claim in state court against her employer, General Electric Co.
(GE), which was incorporated in New York. GE’s manufacturing plant, which has over
9,000 employees, is located in Louisville, Kentucky. GE has several other places of
operation, and its corporate headquarters is located in Schenectady, New York. GE filed a
motion to remove the case to federal court based on diversity jurisdiction. Assuming that
her claim exceeds the required amount of damages in dispute, is there diversity of
citizenship? See Gafford v. General Electric Co., 997 F.2d 150 (6th Cir. 1993).

16
9. In January 2006, Llexcyiss Omega and D. Dale York, both residents of Indiana,
listed a Porsche for sale on eBay, an online auction website. The auction was open to any
registered eBay user in the United States. The listing stated that the vehicle was located in
Indiana and that the “winning” bidder would be responsible for arranging and paying for
delivery of the vehicle. Richard and Marlene Attaway, residents of Idaho, entered a bid of
$5,000 plus delivery costs. After being notified that they had “won” the auction, the
Attaways submitted payment to Omega and York through PayPal, an online payment
service owned by eBay, which charged the amount to the Attaways’ MasterCard account.
On February 5, 2006, the Attaways arranged for CarHop USA, a Washington-based auto
transporter, to pick up the Porsche in Indiana and deliver it to their Idaho residence. After
taking delivery of the Porsche, the Attaways were disappointed that the condition of the
Porsche was “significantly not-as-described” in the eBay listing. Soon thereafter, the
Attaways convinced MasterCard to rescind the payment that was made to Omega and
York. On December 27, 2006, Omega and York filed suit against the Attaways in an
Indiana trial court, demanding $5,900 in damages for breach of contract. The Attaways
filed an answer and a motion to dismiss for lack of personal jurisdiction. Does the Indiana
trial court have personal jurisdiction over the Attaways? See Attaway v. Omega, 903
N.E.2d 73 (Ind. Ct. App. 2009).

10. Parker sues Davis. At trial, Parker’s lawyer attempts to introduce certain evidence
to help prove his case. Davis’ attorney objects, and the trial judge refuses to allow the
evidence. Parker eventually loses the case and files an appeal. On appeal, his attorney
argues that the trial judge’s decision not to admit the evidence was erroneous. Davis’
attorney argues that the appellate court cannot consider the question because it can only
review errors of law, not fact, at the trial court level. Is Davis’ attorney correct? Why or
why not?

11. The state of New Jersey claims that it has sovereign rights over certain landfilled
portions of Ellis Island located in the Hudson River, which borders New Jersey and New
York. The state of New York disagrees, asserting that it has sovereignty over the entire
island. If New Jersey brings an action in a U.S. district court to resolve the matter, does
the district court have subject matter jurisdiction to decide the case? See New Jersey v.
New York, 526 U.S. 589 (1999).

12. Schwartz T.P., Inc., a Pennsylvania corporation, hired Christopher McCarthy in

2009 to act as its director of sales for the U.S. and Canada. He signed an employment
agreement that contained a Pennsylvania choice of law clause and that prohibited him from
competing against Schwartz for two years after his employment had ended. During his
employment with Schwartz, McCarthy lived and worked from his home in Georgia.
McCarthy’s supervisor was based in Pennsylvania, and McCarthy regularly communicated
with other Schwartz employees in Pennsylvania by telephone. However, McCarthy only
visited Pennsylvania in-person on one occasion. After working for Schwartz for five years,
McCarthy accepted a position with one of Schwartz’s competitors in 2014. When
Schwartz sued him for breach of contract in a Pennsylvania federal district court, McCarthy
moved to dismiss the case on the grounds that the court lacked personal jurisdiction over

17
him. Does the Pennsylvania court have personal jurisdiction over McCarthy? See Schwartz
T.P., Inc. v. McCarthy, 2015 WL 1931392 (W.D. Pa. 2015).

13. Dial, a resident of Indiana, intentionally vandalized a parked car in Springfield,

Illinois. The damage to the car prevented the owner from using it during the time it was
being repaired. Dial has returned to Indiana and has had no other contacts with the state
of Illinois. The owner of the car, an Illinois resident, has filed a civil action against Dial in
an Illinois state trial court. Does the court have personal jurisdiction over the case?

14. Vernon Minton owned a U.S. patent on a computer program and

telecommunications network designed to facilitate securities trading. He hired Jerry Gunn,
a lawyer, to represent him in a patent infringement case against the National Association
of Securities Dealers, Inc. Minton lost the case and later discovered that he might have
won on the basis of another legal argument that Gunn had failed to raise. Minton
subsequently sued Gunn for legal malpractice in a federal district court. Gunn argued that
the court lacked subject matter jurisdiction since legal malpractice is a form of professional
negligence, which is a state tort law claim. Minton asserted that the court had federal
question jurisdiction since the case arose under federal patent law. Which argument is
correct? See Gunn v. Minton, 568 U.S. 310 (2013).

15. Abbott Laboratories manufactured and sold the “Life Care PCA,” a pump that
delivers medication into a person intravenously at specific time intervals. Beverly Lewis
sued Abbott in a Mississippi state court, alleging that a defective Life Care PCA had injured
her by delivering an excessive amount of morphine into her body. During discovery,
Abbott served Lewis with a request to admit that her damages did not exceed $75,000.
Lewis did not answer the request for admission. Later, when she attempted to remove the
case to a federal district court on the basis of diversity of citizenship, Abbott contended
that the federal court did not have subject matter jurisdiction because Lewis had admitted
that her damages did not exceed $75,000. What result? See Lewis v. Abbott Laboratories,
189 F. Supp.2d 590 (S.D. Miss. 2001).

16. Nutrilab, Inc. manufactures a product known as “Starch Blockers.” The product is
an aid in controlling weight by preventing the human body from digesting starch. The U.S.
Food & Drug Administration (FDA), the federal agency that is responsible for protecting
and promoting public health, classified Starch Blockers as a drug and ordered that it be
removed from the market. The FDA claimed that it had the legal authority to classify new
products as drugs and prevent their sale until their safety could be determined. Nutrilab
disputes the FDA’s decision and wants to challenge it in federal court. Does the federal
district court have subject matter jurisdiction to hear the case? See Nutrilab, Inc. v.
Schweiker, 713 F.2d 335 (7th Cir. 1983).

17. Peridyne Technology Solutions, LLC, located in Georgia, entered into a contract
with Matheson Fast Freight, Inc., a California corporation. All negotiations took place by
phone. According to the contract, Peridyne agreed to provide computer consulting services
to Matheson. To perform the contract, Peridyne supplied Matheson with password access
to Peridyne’s directories containing data and software. All information and

18
communications were exchanged electronically and no Matheson employees ever traveled
to Georgia. After terminating the contract, an employee of Matheson, acting on behalf of
Matheson, hacked into several of Peridyne’s servers and directories located in Georgia.
The employee downloaded and deleted files. Peridyne filed a civil action against Matheson
in a federal district court in Georgia for damages. Matheson moved to dismiss the case for
lack of personal jurisdiction. What result? See Peridyne Technology Solutions, LLC v.
Matheson Fast Freight, Inc., 117 F. Supp.2d 1366 (N.D. Ga. 2000).

18. Music Millennium Enterprises, Inc. (MME) sells music CDs from two retail stores
in Oregon and from its website. Millennium Music LP (Millennium), a South Carolina
corporation, operates retail music stores under the name “Millennium Music” in North and
South Carolina. Millennium has no retail stores or employees in Oregon, but its website is
accessible to Oregon residents. During 1994-97, Millennium purchased a small number of
compact discs from a distributor located in Oregon, representing approximately one-half
of one percent of its inventory purchases for those years. In 1998, Millennium sold one
compact disc online to an Oregon resident, but otherwise has sold no merchandise to any
other Oregon residents. MME sued Millennium in an Oregon federal district court for
infringement of its trademark rights in the “Millennium” name. Does Millennium have
sufficient minimum contacts with Oregon to allow the court to exercise personal
jurisdiction over the case? See Millennium Enterprises, Inc. v. Millennium Music, LP, 33
F. Supp.2d 907 (D. Ore. 1999).

19. Arkoma Associates, an Arizona limited partnership organized, sued Tom Carden
and Leonard Limes for breach of contract in a federal district court, relying on diversity of
citizenship for federal jurisdiction. A limited partnership is an unincorporated association
of persons who operate a business together and who share the profits and ownership of the
business. Carden and Limes, Louisiana citizens, filed a motion to dismiss the case on the
ground that one of Arkoma’s limited partners was also a Louisiana citizen. Should the
motion be granted? See Carden v. Arkoma Assoc., 494 U.S. 185 (1990).

20. Rose was seriously injured while using a defective power saw manufactured by the
Black & Decker Corporation. Rose believes that the saw was defectively designed and has
filed a products liability action against Black & Decker. Which forms of discovery should
her attorney use during the discovery phase of the lawsuit to obtain information and
evidence relevant to the trial?

21. The Age Discrimination in Employment Act (ADEA) is a federal law that prohibits
age-based employment discrimination against employees and job applicants who are at
least 40 years of age. Dennis, a 55 year old male, recently applied for a job as a server in
a restaurant and was not hired after being told “you seem kind of old to be doing a job like
this” and “do you really think you would fit in?” He has filed suit in a federal district court
against the restaurant for violating the ADEA. Does the court have subject matter
jurisdiction over the case? If so, which type?

22. Cynthia was offered the job of branch manager for Western State Bank. The
employment contract stated that she would be assigned to a branch in Los Angeles. Several

19
weeks before she was to start, Western State Bank told her that she had instead been
assigned to manage a branch in San Francisco. Cynthia refused to accept the position and
sued the Bank for breach of contract. In a deposition during discovery, an executive of
Western State Bank admitted that there was a valid contract between the Bank and Cynthia,
but stated that the position in San Francisco was identical to the one in Los Angeles.
Cynthia filed a motion for summary judgment. Should the court grant the motion?

23. While visiting San Francisco, Andrew, a resident of Los Angeles, was involved in
an automobile collision with Brandon, a resident of San Francisco. Brandon’s negligence
caused the accident. Andrew files suit against Brandon in a California trial court in Los
Angeles. All of the witnesses to the accident reside in the San Francisco area. If Brandon
believes that litigating the case in Los Angeles would be unduly expensive and
inconvenient for him, what motion should he file?

20
 TORTS

WISEMAN v. SCHAFFER
768 P.2d 800 (Idaho 1989)

Larry and Freda Wiseman left their Ford pickup truck at the Ross Point Husky
Truck Stop in Post Falls, Idaho, while they were doing some long haul trucking. During
their absence, an imposter, identifying himself as Larry Wiseman, telephoned David
Schaffer and asked him to tow the Ford pickup to the yard of a local welding shop. The
imposter told Schaffer that $30 for the towing charge had been left on top of the sun visor
in the pickup. Schaffer located the pickup and the cash, and then towed the pickup to the
welding shop as directed. Sometime later, the pickup was stolen. The Wisemans sued
Schaffer, alleging that he committed the tort of conversion. A jury found for Schaffer and
the Wisemans appealed.

Swanstrom, Judge. Conversion ... [is] This satisfied the first element of
“any distinct act of dominion wrongfully conversion. ... [T]he law of conversion
exerted over another’s personal property does not relieve an actor of liability due
in denial or inconsistent with his rights to his belief, because of a mistake of law
therein, such as a tortious taking of or fact not induced by the other, that he
another’s chattels, or any wrongful has the consent of the other.
exercise ... over another’s goods, Furthermore, to create liability for
depriving him of the possession, conversion it is not necessary that the
permanently or for an indefinite time.” actor intends to commit a trespass or a
More recently, conversion has been conversion; and the actor may be liable
described as an intentional exercise of where he has in fact exercised dominion
dominion or control over a chattel which or control, although he may be quite
so seriously interferes with the right of unaware of the existence of the rights
another to control it that the actor may with which he interferes.
justly be required to pay the other the full The evidence shows the second
value of the chattel. ... element of conversion was also satisfied.
[T]he jury was required to determine, Schaffer’s interference with the
first, whether Schaffer exercised Wisemans’ right of control ultimately
dominion over the Wisemans’ pickup resulted in the loss of the Wisemans’
without a right to do so, and second, pickup. ... The judge’s instruction on
whether the Wisemans had been conversion did not excuse liability if
“consequently deprived of possession” of property were lost due to theft by a third
their pickup. Finally, if the foregoing two party after the defendant wrongfully
elements were found to exist, the jury had exercised dominion. Consequently, the
to find the “nature and extent of the jury’s verdict is not supported by the
damages.” evidence. The judgment must be vacated
The evidence shows that Schaffer on the issue of Schaffer’s liability for
exercised dominion or control over the conversion. Judgment vacated and
Wisemans’ pickup inconsistent in fact case remanded for a new trial.
with the Wisemans’ right of ownership.

21
 INTENTIONAL TORT DEFINITIONS

Intentional Torts to Persons Definition of the Act Causing the Harm

Battery

Assault

Infliction of Emotional Distress

False Imprisonment

Intentional Torts to Property Definition of the Act Causing the Harm

Trespass to Land

Nuisance

Conversion

Trespass to Personal
Property

22
 CALHOON v. LEWIS
96 Cal. Rptr.2d 394 (Cal. Ct. .App. 2000)

One morning, Michael Calhoon and his friend Wade Lewis agreed that Michael
would pick up Wade at his parents’ house and then they would drive downtown to visit
Wade’s girlfriend. When Michael arrived at the Lewises’ house, Wade was not ready to
leave and asked Michael to wait for a few minutes. While he waited, Michael skateboarded
in the Lewises’ driveway in front of the garage. Michael skateboarded for about 10 to 15
minutes, successfully performing a trick, known as an “ollie.” As he prepared to perform
the trick again, Michael skateboarded across the driveway in the direction of the garage.
He attempted to ollie again, but lost control of his skateboard. As he was losing his
balance, Michael took three steps backwards. The back of his legs struck a planter located
near the garage causing Michael to fall and impale himself on a metal pipe in the planter.
Michael suffered serious injuries. He sued Wade’s parents, Alan and Linda Lewis, as
residential property owners, for negligence. The Lewises moved for summary judgment
arguing that Michael’s claim was barred under the doctrine of primary assumption of risk.

Haller, Judge. “As a general rule, each those inherent in the sport.” Michael says
person has a duty to use ordinary care and the Lewises breached their duty because
‘is liable for injuries caused by his [or they increased the risks of skateboarding
her] failure to exercise reasonable care in over and above that inherent in the sport
the circumstances ... .’” The scope of this by “concealing” a metal pipe in a planter
duty of care, however, is limited in the in their driveway. We disagree.
context of active sports. Under the First, the pipe did not increase
primary assumption of risk doctrine, Michael’s risk of injury in the sport.
there is no duty to eliminate or protect a Michael was injured because he fell. As
plaintiff against risks that are inherent in Michael concedes, falling is an inherent
a sport or activity. risk of skateboarding, and the presence of
Skateboarding is a type of activity the pipe or the planter had nothing to do
covered by the primary assumption of with his falling down. The fact that
risk doctrine. An activity falls within that Michael’s injuries were more severe than
doctrine if “the activity is done for they would have been if the pipe had not
enjoyment or thrill, requires physical been in the planter does not make the
exertion as well as elements of skill, and assumption of risk doctrine inapplicable.
involves a challenge containing a The exception applies when the
potential risk of injury.” These factors defendant increased the risk of injury
certainly apply to skateboarding. beyond that inherent in the sport, not
Michael argues this case falls within when the defendant’s conduct may have
an exception to the assumption of the risk increased the severity of the injury
doctrine, providing that: “[a]lthough suffered. Michael’s focus on the fact that
defendants generally have no legal duty he was unaware of the pipe is misplaced.
to eliminate (or protect a plaintiff against) The assumption of risk doctrine is an
risks inherent in the sport itself, it is well objective test and “does not depend on the
established that defendants generally do particular plaintiff’s subjective
have a duty to use due care not to increase knowledge or appreciation of the
the risks to a participant over and above potential risk.”

23
 Second, as our Supreme Court change the nature of skateboarding. As
recently made clear, the exception with skiing, the existence of obstacles in
permitting liability for one who has the environment is part of the thrill of the
increased the risks beyond those inherent sport. Homeowners would be
in the sport, “was made in the context of encouraged to close their property to
[the court’s] discussion of the duty owed skateboarders, decreasing the opportunity
by parties who have some organized for skateboarders to participate in their
relationship with each other and to a sport. Foreseeability and cost factors also
sporting activity ... .” When no such militate against imposing a general duty
“relationship exists ... and there is no on homeowners to refrain from doing
policy reason for imposing a duty upon anything on their property that could
the defendant to avoid increasing the risk increase risks to skateboarders. It is not
of harm ..., the defendant has no such reasonable to expect homeowners to
duty.” ... predict every possible consequence of a
There are no facts showing the skateboarder’s fall, especially when
Lewises held out their driveway as an doing so would require homeowners to
appropriate place to skateboard or in any bear large and unnecessary costs.
other way represented that the driveway Requiring homeowners to make their
was a safe place for skateboarding. property safe for skateboarding would
Therefore, unlike a recreational business create an unnecessary burden for our
operator or a purveyor of recreational community.
activities, they had no organized “[T]he nature of the applicable duty or
relationship with Michael vis-‘a-vis the standard of care ... varies with the role of
sport of skateboarding. Absent this the defendant whose conduct is at issue in
relationship, a party does not have a a given case.” Whereas it would be
“general duty not to increase the risk reasonable to require a skateboarding
inherent in whatever sporting or park owner to take steps to minimize the
recreational activity a plaintiff happens to risks of skateboarding injuries, it would
be pursuing ... .” not be reasonable to require the same
Our conclusion is supported by policy steps of residential property owners.
reasons that underlie the assumption of Absent facts showing a residential
risk doctrine and that are traditionally property owner is holding out his or her
used to determine the limits of duty. property for skateboarding use, an owner
Imposing a duty on residential owners to does not have the duty to refrain from
make property safe and guard against increasing risks to a skateboarder.
injuries to those voluntarily participating Judgment affirmed.
in the sport of skateboarding would

24
 KLEIN v. PYRODYNE CORP.
810 P.2d 917 (Wash. 1991)

Pyrodyne Corporation was hired to display the fireworks at the Western

Washington State Fairgrounds in Puyallup, Washington, on July 4, 1987. During the
display, one of the 5-inch mortars was knocked into a horizontal position, from which
position a rocket inside ignited and flew 500 feet parallel to the earth, exploding near the
crowd of onlookers. Danny and Marion Klein were injured by the explosion. They filed a
strict liability suit against Pyrodyne. They also argued that Pyrodyne failed to carry out a
number of the statutory and regulatory requirements for preparing and setting off
fireworks. Pyrodyne argued that the accident was caused by a rocket detonating in its
mortar tube without ever leaving the ground, causing another rocket to be knocked over,
ignited, and set off horizontally. Pyrodyne moved for summary judgment on the ground
that negligence principles should be applied to the case. When the trial court denied its
motion and found it strictly liable, Pyrodyne appealed.

Guy, Justice. The modern doctrine of should be evaluated: “Any one of them is
strict liability for abnormally dangerous not necessarily sufficient of itself in a
activities … stand[s] for the rule that the particular case, and ordinarily several of
defendant will be liable when he damages them will be required for strict liability.
another by a thing or activity unduly On the other hand, it is not necessary that
dangerous and inappropriate to the place each of them be present, especially if
where it is maintained, in the light of the others weigh heavily.”
character of that place and its We find that the factors stated in
surroundings. … clauses (a), (b), and (c) are all present in
Section 519 of the Restatement the case of fireworks displays. Any time
provides that any party carrying on an a person ignites rockets with the intention
“abnormally dangerous activity” is of sending them aloft to explode in the
strictly liable for the ensuing damages. presence of large crowds of people, a high
Section 520 of the Restatement lists six risk of serious personal injury or property
factors that are to be considered in damage is created. That risk arises
determining whether an activity is because of the possibility that a rocket
“abnormally dangerous”: (a) a high will malfunction or be misdirected.
degree of risk of some harm to the person, Furthermore, no matter how much care
land, or chattels of others; (b) the pyrotechnicians exercise, they cannot
likelihood that the harm that results from entirely eliminate the high risk inherent in
it will be great; (c) an inability to setting off powerful explosives near
eliminate the risk by the exercise of crowds.
reasonable care; (d) the extent to which Pyrodyne argues that the factor stated
the activity is not a matter of common in clause (d) is not met because fireworks
usage; (e) the inappropriateness of the are a common way to celebrate the 4th of
activity to the place where it is carried on; July. Although fireworks are frequently
and (f) the extent to which its value to the and regularly enjoyed by the public, few
community is outweighed by its persons set off special fireworks displays.
dangerous attributes. The comments to Indeed, anyone wishing to do so must
section 520 explain how these factors first obtain a license.

25
 The Puyallup Fairgrounds is an fireworks on the day celebrating our
appropriate place for the fireworks show national independence and unity
because the audience can be seated at a outweighs the risks of injuries and
reasonable distance from the display. damage.
Therefore, the clause (e) factor is not In sum, we find that setting off public
present in this case. The factor in clause fireworks displays satisfies four of the six
(f) requires analysis of the extent to which conditions under the Restatement test.
the value of the fireworks to the We therefore hold that conducting public
community outweighs its dangerous fireworks displays is an abnormally
attributes. This country has a dangerous activity justifying the
longstanding tradition of fireworks on the imposition of strict liability. Judgment
4th of July. That tradition suggests that for the Kleins affirmed.
we have decided that the value of

26
 TORTS DISCUSSION PROBLEMS

1. On the afternoon of May 8, 1991, Arkansas Governor Bill Clinton was at the
Excelsior Hotel in Little Rock to deliver a speech at a conference there. Paula Corbin
Jones, a state employee, was working at the registration desk when an Arkansas State
Trooper from the Governor’s security detail approached her and informed her that the
Governor wanted to meet her. Thinking that it was an honor to be asked to meet the
Governor and that it might lead to an enhanced employment opportunity, Jones agreed to
be escorted to the Governor’s suite. Upon arriving at the suite, Governor Clinton invited
her in and closed the door behind her. After several minutes of small talk, Clinton reached
over to Jones, took her hand, and pulled her toward him. She removed his hand from hers
and stepped back, but Clinton approached her again and, while saying, “I love your
curves,” put his hand on her leg and attempted to kiss her on the neck. Jones became upset
and confused and exclaimed, “What are you doing?” and walked away from Clinton and
sat down on a couch next to the door. Clinton then sat down next to her and lowered his
trousers. Jones was horrified, jumped up from the couch, and told the Governor that she
had to return to work. Clinton responded, “Well, I don’t want to make you do anything
you don’t want to do,” then looked sternly at her and added, “Let’s keep this between
ourselves.” Jones then left Clinton’s room, but she was shaking and felt shocked. She
insisted that she never said or did anything to invite his advances but was intimidated by
him because he was the Governor. Based on these facts, what intentional tort claim(s), if
any, might she bring against Clinton? What defenses, if any, might Clinton raise to her
claim(s)? See Jones v. Clinton, 990 F. Supp. 657 (E.D. Ark. 1998).

2. Sukhminder and Mohinder Bhattal registered as guests in the Grand Hyatt Hotel in
midtown Manhattan. After they checked in, they turned over their luggage to the bell
captain to be delivered to their room, and left the hotel to meet friends for lunch. When
they returned, they discovered that their luggage was missing. As a result of a computer
error, hotel employees entered their room, removed their luggage, and mistakenly sent it
to the airport, along with the luggage of a Saudi Arabian flight crew that had previously
been staying in the Bhattals’ room. The Bhattals were never able to recover their luggage
since it was stolen once it reached Saudi Arabia. Can the Bhattals succeed in a suit for
conversion against the hotel? See Bhattal v. Grand Hyatt-New York, 563 F. Supp. 277
(S.D.N.Y. 1983).

3. Russell Nelson owned a Staffordshire terrier named Mugsey that weighed about 75
pounds. Mugsey did not “like” certain dogs and got into some dogfights. On one occasion,
Nelson was walking Mugsey when they came upon another dog owner walking his dog.
Mugsey and the other dog began to fight. When Nelson and the other owner attempted to
intercede, Mugsey bit both of them on the arms multiple times. Later that year, Nelson had
to travel out of town and a friend arranged for him to board Mugsey at the Arcata Animal
Hospital. It was unclear as to whether Nelson informed the Arcata staff that Mugsey had
bitten him or was aggressive to other dogs. However, Marta Priebe, a kennel technician at
Arcata, became aware that Mugsey was dog aggressive and began walking Mugsey after
clients all clients had left the building to minimize contact between Mugsey and other dogs.
One morning, Priebe was walking Mugsey when he heard a dog bark and became agitated.

27
As she turned around to return to the kennels, Mugsey grabbed her foot, knocked her down,
and mauled her foot and ankle, resulting in numerous bites and permanent nerve injuries.
Priebe sued Nelson asserting a cause of action for strict liability. What result? See Priebe
v. Nelson, 140 P.3d 848 (Cal. 2006).

4. Paul Marinaccio and Keiffer Enterprises, Inc. (KEI) are adjoining landowners in
the Town of Clarence, New York. KEI, a small residential real estate company, sought to
develop a residential subdivision on its land and submitted a plan to the Town for its
approval. The Town approved a plan required that water from the west side of the KEI’s
property would flow into a storm sewer and then into a ditch, which was to create a pond.
As it turned out, this ditch was actually located on Marinaccio’s property, and it was used
without his permission. The ditch did not have the capacity to contain the large amount of
water that KEI diverted into it and resulted in flooding over 30 acres of Marinaccio’s land.
This newly created wetland caused mosquitos to breed and frogs to gather on his property.
Does Marinaccio have any potential tort claims against KEI? If so, can he recover punitive
as well as compensatory damages? See Marinaccio v. Town of Clarence, 20 N.Y.3d 506
(N.Y. 2013).

5. Betty England worked at a Dairy Queen restaurant owned by S&M Foods in

Tallulah, Louisiana. One day while she was at work, her manager, Larry Garley, became
upset when several incorrectly prepared hamburgers were returned by a customer. Garley
expressed his dissatisfaction by throwing a hamburger that hit England on the leg. Garley
was not trying to hit England with the hamburger, but he was aware that she was
substantially certain to be hit as a result of his action. England, who was not harmed by
the hamburger, sued Garley for battery. Did Garley have the necessary intent to commit a
battery? Does England’s not suffering harm defeat her battery claim? See England v. S&M
Foods, Inc., 511 So.2d 1313 (La. Ct. App. 1987).

6. Michael Carneal, age 14, was a high school student at Heath High School. He
regularly played violent interactive video and computer games, such as “Doom,” “Quake,”
“Rampage,” “Resident Evil,” and “Final Fantasy.” These games involved the player
shooting various opponents with virtual guns and other weapons. He was also a fan of the
movie The Basketball Diaries, in which a high school student dreams of killing his teacher
and several of his classmates. On December 1, 1997, Michael took a 22-caliber pistol and
five shotguns into the lobby of Heath High School and shot several of his fellow students,
killing three and wounding many others. The parents of the dead students sued the
producers and distributors of the violent video games that Michael had watched prior to
the shooting, alleging that they were negligent in selling these games to Carneal. Were the
video games the proximate cause of the injuries and deaths of the students? See James v.
Meow Media, Inc., 300 F.3d 683 (6th Cir. 2002).

7. While at a Dillard’s department store that was located in a shopping mall, Lakesha
Millbrook tried on a pair of jeans. She decided not to purchase that pair, but she eventually
purchased a different pair. Shortly thereafter, Millbrook exited Dillard’s and entered the
public area of the mall. A uniformed security officer retained by Dillard’s then approached
Millbrook, grabbed her shoulder, and stated that Millbrook needed to come back to

28
Dillard’s with him. The officer accompanied Millbrook to the store. The officer and a
Dillard’s employee then escorted Millbrook into a room. Once they were in the room, the
officer stated that Millbrook was responsible for a missing pair of jeans. Although the
officer had not accused her of shoplifting, Millbrook informed them that she had purchased
a pair of jeans and offered her receipt as evidence. According to Millbrook, the officer,
without looking at her receipt, searched her bag before he left the room. When the officer
left the room, he stood outside the room in front of the door. The Dillard’s employee
remained inside the room with Millbrook. After roughly 20 minutes, the officer came back
into the room and told Millbrook that she was free to leave. According to Millbrook, the
incident caused her to start crying because she was hurt and embarrassed. After the
incident, she stated that she had become fearful of being wrongly approached or accused.
Millbrook missed no work as a result of the incident, nor did she see any doctors,
psychologists, therapists, or counselors as a result of the incident. Millbrook later sued
Dillard’s, bringing claims for assault, battery, and false imprisonment. Dillard’s moved
for summary judgment. How should the court rule in regard to each of Millbrook’s claims?
See Millbrook v. Dillard’s, Inc., 2003 WL 21295143 (E.D. Ark. 2008).

8. Irma White, a religious woman in her late forties, was employed at a Monsanto
refinery. While working in the canning department, she and three other employees were
told to transfer a corrosive and hazardous chemical from a larger container into smaller
containers. After they asked for rubber gloves and goggles, a supervisor sent for the
equipment. In the meantime, White began cleaning up the work area and one of the other
employees went to another area to do some work. The other two employees sat around
waiting for the safety equipment, contrary to a work rule requiring employees to busy
themselves in such situations. After learning that the group was idle, Gary McDermott,
the canning department foreman, went to the work station. Once there, he launched into a
profane one-minute tirade directed at White and the other two workers present, calling
them “motherf-----s,” accusing them of sitting on their “f-----g asses,” and threatening to
“show them to the gate.” At this, White became upset and began to experience pain in her
chest, pounding in her head, and difficulty in breathing. Her family physician met her at
the hospital, where he admitted her, fearing that she was having a heart attack. She was
later diagnosed as having had an acute anxiety reaction. White later sued Monsanto for
intentional infliction of emotional distress. Was McDermott’s behavior sufficiently
outrageous for liability? Was her distress sufficiently severe for liability? See White v.
Monsanto Co., 585 So.2d 1205 (La. 1991).

9. Bruno and Norma Ahnert lived across the street and approximately 500 feet from
the Getty Granite Company. Asserting that Getty’s business produced excessive noise and
dust, the Ahnerts sued Getty for nuisance and trespass to land. They alleged that the noise
disturbed their sleep and made conversation, television watching, and listening to the radio
or stereo difficult. In addition, the Ahnerts alleged that the dust prevented them from
opening their windows for ventilation and rendered their outdoor premises unfit for their
use and enjoyment. Getty asked the court to dismiss the Ahnerts’ claims for failure to state
claims upon which relief could be granted. Did the Ahnerts state a valid trespass claim?
Did they state a valid nuisance claim? See Ahnert v. Getty, 1997 WL 178064 (Conn. Super.
Ct. 1997).

29
10. Purvis Touchet was a sales manager of a car dealership owned by Mark Hampton.
After Touchet was terminated from the dealership by Hampton, he went to work for an RV
center. A couple of months later, Touchet telephoned Hampton three different times within
a 15-minute period and left voicemail messages cursing and threatening Hampton. In the
messages, Touchet said: “I am going to f--king murder your ass,” “Anytime you want to f-
-k with me, let me know,” and “Let me and you come meet me somewhere you f--king
piece of shit.” Several days later, Hampton went to the RV center to tell Touchet to stop
harassing him. When Hampton entered Touchet’s office, Touchet turned to face Hampton
and yelled: “F--k you, Hampton.” Hampton then struck Touchet in the face and repeatedly
hit Touchet until he was pulled off by other employees. Touchet sued Hampton for battery.
Hampton argued that Touchet’s threats and insults on his voicemail constituted Touchet’s
consent to fight Hampton. Hampton also argued that he was acting in self-defense to
Touchet’s provocations. What result? See Touchet v. Hampton, 950 So.2d 895 (La. Ct.
App. 2007).

11. Terry Williams sustained physical injuries in an accident involving a vehicle driven
by Kellie Meagher. At the time of the accident, Meagher was using a cellular phone
furnished by Cingular Wireless. Williams later sued Meagher and Cingular in an Indiana
trial court. In the portion of the complaint pertaining to Cingular, Williams alleged that
Cingular was negligent in furnishing a cellular phone to Meagher when it knew, or should
have known, that the phone would be used while the user operated a motor vehicle.
Cingular filed a motion to dismiss for failure to state a claim on which relief could be
granted. Should the trial court grant Cingular’s motion to dismiss? See Williams v.
Meagher, 822 N.E.2d 976 (Ind. 2004).

12. A young man abducted R.M.V., age 10, from the sidewalk in front of her home and
dragged her across the street to a vacant apartment at the Chalmette Apartments. He raped
her, put her in the closet, told her not to leave, and disappeared. The apartment in question
was described by the police officer called to the scene as “empty, filthy, dirty, and full of
debris.” Glass was broken from its windows and the front door was off its hinges. In the
two years prior to the attack on R.M.V., Dallas police had investigated many serious crimes
committed at the Chalmette Apartments complex. A Dallas City Ordinance established
minimum standards for property owners, requiring them, among other things, to “keep the
doors and windows of a vacant structure or vacant portion of a structure securely closed to
prevent unauthorized entry.” Gaile Nixon, R.M.V.’s mother, filed a negligence suit against
Chalmette’s owner and Mr. Property Management Company, Inc., the manager of the
complex. Were the defendants correct in arguing that they owed no duty of care to R.M.V.?
See Nixon v. Mr. Property Management, 690 S.W.2d 546 (Tex. 1985).

13. Erland Stenberg and his wife own a cattle ranch in North Dakota. They breed and
raise Angus cows, a breed that is not considered to be aggressive. When cows are close to
calving, the Stenbergs move them to a portion of their ranch that is bisected by a private
road. The private road leads to the property of Alex Bentley, who owns an easement to
use the private road in order to access his property from the public road. One day, Nelson
Thomas was riding his motorcycle on his way to visit Bentley, his uncle. Upon turning off

30
the public road onto the private road across Stenberg’s ranch, he noticed a cow starting to
move toward him. He began slowing down and thought that the cow would try to run
across the road. As he got closer, however, Thomas saw that she was coming right at him
and he applied the brakes. The cow put her head down and crashed into him. Thomas was
thrown over the handle bars and the motorcycle was lifted into the air and dropped. His
shoulder was seriously injured and his motorcycle was a total loss. Thomas filed suit
against Stenberg claiming that Stenberg was strictly liable for Thomas’ injuries as a keeper
of dangerous animals. A veterinarian testified that cows that have recently had a calf tend
to be protective of their calves. Stenberg testified that his cows were gentle and that his
wife could walk up to almost any of them to pet them and give them apples. Is it likely
that Thomas will succeed on his strict liability claim? See Thomas v. Stenberg, 206 Cal.
App.4th 654 (Cal. Ct. App. 2012).

14. While he was a freshman at Auburn University, Jason Jones became a pledge at the
Kappa Alpha (KA) fraternity. Over the next year, KA brothers hazed Jones in various
ways, including (1) making him jump into a ditch filled with urine, feces, dinner leftovers,
and vomit; (2) paddling his buttocks; (3) pushing and kicking him; (4) making him run a
gauntlet in which he was pushed, hit, and kicked; and (5) making him attend 2:00 a.m.
hazing meetings. Jones continued to participate in these and other hazing activities until
he was suspended from Auburn for poor academic performance. Even though he knew
that 20 to 40 percent of his pledge class had withdrawn from the pledge program, Jones
kept participating because he wanted to become a full member of KA. Jones later sued the
local and national KA organizations for, among other things, negligent hazing in violation
of a state criminal statute that outlawed hazing. The defendants moved for summary
judgment on Jones’s negligence per se claim. They contended that in view of the facts,
Jones had assumed the risk of hazing. Were the defendants entitled to summary judgment?
See Jones v. Kappa Alpha Order, Inc., 730 So.2d 203 (Ala. 1998).

15. In October 2011, Scott Griffin purchased a ticket to experience “The Haunted
Trail,” an outdoor haunted house type of attraction where actors jump out of dark spaces
often inches away from patrons, holding prop knives, axes, chainsaws, or severed body
parts. The ticket Griffin purchased stated: “This attraction contains high impact scares.”
After passing what he believed was the exit and giggling and laughing with his friends
about how much fun they had, Griffin unexpectedly was confronted by a final scare known
as the “Carrie” effect – so named because, like the horror film Carrie, patrons are led to
believe the attraction is over, only to be met by one last jolting scare. This was delivered
by an actor wielding a gas powered chainsaw (the chain had been removed), who
approached Griffin, frightened him, and began chasing him when Griffin ran away. Griffin
was injured when he fell while fleeing. He sued The Haunted Hotel, Inc., which operates
attraction, for negligence. Is The Haunted Hotel liable for negligence? See Griffin v. The
Haunted Hotel, Inc., 2015 WL 7355112 (Cal. Ct. App. 2015).

16. John Coomer is a longtime baseball fan and frequent spectator at Kansas City
Royals baseball games. On September 8, 2009, he and his father attended a Royals game
and sat six rows behind the visitor’s dugout. During the game, the Kansas City Royals
mascot, Sluggerrr the lion, mounted the visitor’s dugout to begin the “Hotdog Launch,” a

31
feature of every Royals home game since 2000. The launch occurs between innings, when
Sluggerrr uses an air gun to shoot hotdogs from the roof of the visitor’s dugout to fans
seated beyond hand-tossing range. When his assistants are reloading the air gun, Sluggerrr
tosses hotdogs by hand to the fans seated nearby. While Sluggerrr was tossing hotdogs by
hand to fans seated near Coomer, he turned to look at the scoreboard and was hit in the eye
by a hotdog thrown by Sluggerrr. Coomer suffered a detached retina and later sued the
Kansas City Royals Baseball Corporation, claiming the team is responsible for Sluggerrr’s
negligence and the injury it caused to him. The Royals argued that it owed no duty to
protect Coomer from the risk of injury from Sluggerrr’s hotdog toss because is an inherent
risk Coomer assumed by attending a Royals game. What result? See Coomer v. Kansas
City Royals Baseball Corp., 2014 WL 2861763 (Mo. 2014).

17. A mentally deranged man suddenly ran through the front door of the crowded
Concord Cafeteria in Miami Beach, threw a five-gallon container of gasoline on the floor,
lit a match to the gasoline, and ran away. In the fire that ensued, many patrons were burned
or suffered smoke inhalation, and others were injured in the chaotic rush to flee the
building. There were only a few emergency exits, which were inadequately marked. As a
result of this incident, over seventy injured patrons filed suit against Concord for
negligence. Concord argued that it was not liable to the injured patrons because the acts
of the mentally deranged man were an unforeseeable intervening cause of their injuries.
What result? See Concord Florida, Inc. v. Lewin, 341 So.2d 242 (Fla. Ct. App. 1977).

18. Early in 1994, a Kmart manager notified Kmart’s Birmingham, Alabama-area

stores that Deborah Cameron and Sonja Perdue had been repeatedly returning merchandise
without a receipt and getting cash refunds. The manager also stated his belief that the two
women had earlier shoplifted the same merchandise from Kmart. For these reasons, he
told all the Kmart loss control managers in the area to be on the lookout for Cameron and
Perdue and to closely monitor their activities. Among the recipients of this message was
Doug Sharp, the loss control manager for Kmart’s Bessemer, Alabama store. One night,
after the Bessemer store refused to give Perdue a refund because she lacked a receipt, Sharp
asked to speak to her, and led her to a loss control room in the store. Later, he detained
Cameron in a separate loss control room after observing her putting a set of drapes into her
purse. After each woman accused the other of making her steal merchandise and Cameron
confessed to taking the draperies, the police arrived and arrested the two women for third-
degree theft. Perdue and Cameron later were convicted for that crime, but those
convictions were reversed on appeal. Perdue and Cameron then sued Kmart and Sharp for
false imprisonment. Will Perdue and Cameron succeed on their claim? See Kmart Corp.
v. Perdue, 708 So.2d 106 (Ala. 1997).

19. Jose Avila, a Rio Hondo Community College student, played baseball for the
school’s team. During an intercollegiate baseball game between Rio Hondo and Citrus
Community College, a Rio Hondo pitcher hit a Citrus batter with a pitch. In baseball,
pitchers sometimes intentionally throw at batters to disrupt a batter’s timing, to back the
batter away from home plate, to retaliate after a teammate has been hit, or to “punish” a
batter for having hit a home run. When Avila came to bat in the next half-inning, the Citrus
pitcher hit Avila in the head with an inside “beanball” pitch in retaliation, cracking his

32
batting helmet. Avila staggered, felt dizzy, and was in pain, and eventually left the game.
Avila sued Citrus Community College for battery. Citrus argued that he had voluntarily
consented to the risk of injury by playing baseball. What result? See Avila v. Citrus
Community College, 131 P.3d 383 (Cal. 2006).

20. CompuServe, Inc. operates a computer communication service through a

proprietary nationwide computer network. In addition to allowing access to the extensive
content available on its network, CompuServe permits subscribers to send and receive
email messages. Cyber Promotions, Inc. is in the business of sending unsolicited “spam”
email advertisements on behalf its clients to hundreds of thousands of Internet users, many
of whom are CompuServe subscribers. CompuServe repeatedly notified Cyber Promotions
that it was prohibited from using CompuServe’s computer equipment to process and store
the unsolicited email and has requested that it terminate the practice. Instead, Cyber
Promotions have sent an increasing volume of e-mail solicitations to CompuServe
subscribers. As a result, CompuServe’s servers must store an enormous volume of
undeliverable email messages and attempt to return those messages to an address that does
not exist. CompuServe filed suit for an injunction, contending that Cyber Promotions’
actions amount to trespass to personal property. What result? See CompuServe Inc., v.
Cyber Promotions, Inc., 962 F. Supp. 1015 (S.D. Ohio 1997).

21. Cindy Lourcey worked as a postal carrier for the U.S. Postal Service. While
delivering mail by postal vehicle, she saw Charles Scarlett and his wife in the middle of
the street. Lourcey stopped her vehicle to provide assistance and spoke with Scarlett, who
said his wife was having a seizure. As Lourcey phoned 911 on her cellphone to request
help, Scarlett pulled out a pistol and shot his wife in the head. He then turned and faced
Lourcey, pointed the pistol at his head, and fatally shot himself. Lourcey sued the estate
of Charles Scarlett claiming that Scarlett’s conduct constituted intentional infliction of
emotional distress. According to the complaint, Scarlett’s conduct caused her to
experience post-traumatic stress disorder and depression. What result? See Lourcey v.
Estate of Scarlett, 146 S.W.2d 48 (Tenn. 2004).

22. Joseph Doescher, who was acting as a hospital perfusionist in an open-heart

surgery, left during the surgery to attend to personal business. As a perfusionist, Doescher
operated the “heart/lung” machine that kept the patient alive during the surgery. Prior to
the beginning of the surgery, Doescher had arranged for Jennifer Lee, another perfusionist,
to fill in for him after his departure. Due to Doescher’s absence and Lee’s service as his
replacement, no other perfusionists were available for a short period of time. As a result,
Dr. Daniel Raess, a cardiovascular surgeon, was not immediately able to conduct an
emergency heart surgery on a patient. Afterwards, Raess confronted Doescher about his
absence. Raess aggressively and rapidly advanced towards Doescher with clenched fists,
piercing eyes, and a beet-red face, while screaming and swearing at him. Doescher backed
up against a wall and put his hands up, believing that Raess was going to hit him, but Raess
suddenly stopped, turned, stormed past Doescher, and left the room, momentarily stopping
to declare to Doescher that “you’re finished, you’re history!” Doescher sued Raess for
assault. After the jury returned a verdict in favor of Doescher and awarded him damages,

33
Raess appealed. Was there sufficient evidence to support the jury’s conclusion that the
elements of assault were proved? See Raess v. Doescher, 883 N.E.2d 790 (Ind. 2008).

23. The internet search engine Google provides a feature on Google Maps called
“Street View” that offers free access on the Internet to panoramic, navigable views of
streets in and around major cities across the United States. To create the Street View
program, representatives of Google attach panoramic digital cameras to passenger cars and
drive around cities photographing the areas along the street. According to Google, “[t]he
scope of Street View is public roads.” Aaron and Christine Boring live on a private road,
which is marked with a “Private Road, No Trespassing” sign. They discovered that Google
had posted colored images of their residence, including the swimming pool, taken from
their driveway months earlier without obtaining their authorization. Can the Borings
maintain a claim for trespass to land against Google? See Boring v. Google, Inc., 362 Fed.
Appx. 273 (3d Cir. 2010).

24. Elizabeth Culli stopped at a 24-hour self-service gas station operated by Marathon
Petroleum. She filled her gas tank and then picked up five eight-pack cartons of soda.
After paying for the gas, she headed back toward her car. Before Culli reached her car,
however, she slipped and fell on a “clearish” slippery substance on the floor approximately
8 to 10 inches in width and length. Culli suffered a compound fracture of her ankle and
had to use a wheelchair and walker for several months thereafter. The station typically was
staffed by one person, who would primarily stay inside and run the cash register, and who
also was responsible for replenishing supplies of the various items sold at the station. The
station lot was normally swept once a day during the night shift. Spills generally occurred
once or twice each day, and one employee had asked the station manager to hire more help
because the station was understaffed, a request that he relayed to his superiors but that went
unheeded. Is Marathon liable for Culli’s injuries on the basis of negligence? See Culli v.
Marathon Petroleum Co., 862 F.2d 119 (7th Cir. 1988).

25. Johnson Oil Co. operates a number of gas stations and convenience stores under
the “Bigfoot Food Stores” name. On January 4, 1999, Gloria Gaff stopped at a Bigfoot
store in Louisville, Kentucky, to purchase gasoline for her car and to use the store’s
automatic car wash. She observed that the store’s parking lot was icy and that the
temperature was below freezing. In view of the parking lot’s condition, Gaff walked
carefully during her first two trips across the lot. The first was from her car to the store so
that she could pay for the gasoline she had pumped; the second was her return from the
store to the car. Gaff then drove her car to the automatic car wash, which was located
behind the store. She had difficulty engaging the car wash’s automatic garage door,
however. Gaff therefore crossed part of the parking lot a third time, again noticing the
extent of ice on the lot, and entered the store to ask how to operate the car wash’s garage
door. When she left the store and proceeded toward her car, she initially walked down a
fully cleared adjoining sidewalk. She then stepped onto the icy parking lot surface. Even
though Gaff was proceeding cautiously, her foot slipped on the ice she encountered. She
fell and sustained injuries as a result. Gaff filed suit against Johnson Oil in a Kentucky
state court. Did Johnson Oil have a duty of care to remedy or warn her about the icy

34
conditions on its parking lot prior to her accident? See Gaff v. Johnson Oil Co., 45 Fed.
Appx. 499 (6th Cir. 2002).

26. On January 22, 2001, 8-year-old Tatum Souza, an intermediate skier, was skiing at
the Squaw Valley resort when she collided with a metal snowmaking hydrant on the
Mountain Run ski trail, injuring her mouth. The accident occurred when Souza caught her
ski edge and lost her balance, causing her to veer to the right and collide with the hydrant.
At the time of the collision, Souza was skiing with her family; the weather was overcast,
the wind was calm, and the surface condition was packed powder. The hydrant protruded
visibly above the snow level about five to six feet and was located on the right side of the
trail. Souza sued Squaw Valley for negligence, alleging that it breached its duty to warn
her of the danger. What result? See Souza v. Squaw Valley Ski Corp., 41 Cal. Rptr.3d 389
(Cal. Ct. App. 2006).

27. Richard Schmitz, a train conductor for Canadian Pacific Railway Co., was walking
alongside the tracks late one night inspecting his train’s brakes with a lantern when he
stepped into a hole and injured his leg. He sued Canadian Pacific under the Federal
Employers’ Liability Act, a federal statute requiring railroads to keep vegetation along their
tracks under control. The regulation states: “Vegetation on railroad property which is on
or immediately adjacent to roadbed shall be controlled [by the railroad] so that it does not
... [i]nterfere with railroad employees performing normal trackside duties.” Schmitz
argued that Canadian Pacific negligently allowed trackside vegetation to grow so tall that
he could not see the hole. Can Schmitz state a claim for negligence per se? See Schmitz
v. Canadian Pacific Ry. Co., 454 F.3d 678 (7th Cir. 2006).

28. While shopping at a Lazarus Department Store, Rosario Angelopoulos approached

an irresistible display of Godiva chocolate. One box of chocolates did not have a lid, and
the interior cellophane wrapper covering the chocolate was open on both sides of the box.
Unable to resist temptation, Angelopoulos ate a piece, and then returned to the display
several minutes later and consumed a second piece. Thinking that the chocolates were a
free sample, Angelopoulos did not pay for either morsel of chocolate. Several minutes
later, a store loss prevention associate approached Angelopoulos and requested that she
follow him to the loss prevention office located in the store. Angelopoulos complied. The
loss prevention associate searched Angelopoulos’s purse and bags and a female associate
performed a search of her body. Angelopoulos was then handcuffed to a table affixed to
the floor. Her identification and her Lazarus credit card were taken from her purse. She
was presented with a statement of admission, but she objected to signing it and asked to
speak to the store manager. When the store manager appeared, Angelopoulos asked to
have the handcuffs removed and the manager indicated that she did not have the power to
remove the handcuffs and that it was the policy of the loss prevention group to handcuff
everyone suspected of shoplifting. After repeated refusals, she signed the admission form
and was then released from the handcuffs. She was then told that the store must take her
photograph, to which she objected. She then scratched out her signature from the
admission form. Throughout the detention process, Angelopoulos was kept handcuffed
continuously for a period of approximately 50 to 55 minutes. Can she succeed in a claim

35
for false imprisonment against the store? See Angelopoulos v. Lazarus PA, Inc., 897 A.2d
304 (Pa. Super. Ct. 2005).

29. Catherine Ray and her husband boarded an American flight at 6:00 a.m. on
December 29, 2006, traveling from Oakland, California to Dallas, Texas. Due to bad
weather and a backup of flights in the Dallas area, the flight was diverted to Austin, Texas
for refueling. The plane landed around noon at the Austin airport, refueled, began to taxi
toward the runway, and then stopped. At that point the pilot informed the passengers that
the Dallas airport had been closed as a result of the bad weather and that the plane could
not takeoff until it reopened. About an hour later the pilot announced that a bus would be
arriving to take any passengers who wished to deplane to the Austin airport. The pilot told
passengers that if they chose to deplane, they would be “finished with this flight” and would
be “on their own.” Ray and her husband believed that the pilot meant that passengers who
chose to deplane would be required to fund alternate transportation home, so they remained
on the plane when the bus arrived. After two to three hours on the tarmac the pilot
announced that a second bus would be arriving to take any more passengers who wished
to proceed to the terminal. When the second bus arrived the passengers were instructed,
“[t]his is your last chance, if you want to get off, get off now because this is it.” Ray and
her husband again chose to remain on the plane. American provided no further
opportunities for passengers to exit the plane for the next six to seven hours. At 9:00 p.m.
the plane was taken to a gate at the Austin airport and the remaining passengers deplaned.
American did not provide passengers with food or lodging vouchers when they initially
entered the terminal. Many of the passengers, including Ray and her husband, spent the
night in the terminal. Ray and other passengers subsequently sued American for false
imprisonment. American filed a motion for summary judgment. What result? See Ray v.
American Airlines, Inc., 609 F.3d 917 (8th Cir. 2010).

30. Jay Rhodes and Rodney MacHugh are long-time friends and neighbors. Both men
have farmed for decades. MacHugh has bred sheep for over thirty years. Because Mr.
MacHugh’s land is prone to flooding, Rhodes has allowed MacHugh to keep some of his
livestock on Mr. Rhodes’ property. In the summer of 2012, MacHugh purchased a new
ram and placed it on Rhodes’ property where, for the following month, it caused no
problems. In the weeks before MacHugh put the ram in with ewes, Rhodes described it as
“real friendly. He’d come up to me several times when I was changing water, and I’d pet
him.” On August 20, 2012, Rhodes went into his yard to turn on his sprinklers. By that
time, MacHugh had put several ewes in the pasture with the ram. Rhodes walked past them
and toward the five-foot sprinklers in the pasture. Just as he touched the valve at the top
of the sprinklers, the ram butted him from behind, knocking him to the ground. The ram
continued to jump up in the air and hit Rhodes with his head, knocking him out. Rhodes
was eventually rescued by a passing neighbor, but suffered a concussion, five broken ribs,
and a broken sternum and shoulder. He filed an action for damages against MacHugh
based on strict liability. Is MacHugh strictly liable for harm caused by a ram? See Rhodes
v. MacHugh, Inc., 2015 WL 6689576 (Wash. Ct. App. 2015).

31. Phyllis Engleson was one of approximately 100,000 visitors to the Little Falls Arts
& Crafts Fair in Little Falls, Minnesota. To accommodate visitors, the city converted the

36
parallel parking areas along the curb on either side of the street into pedestrian walkways,
set off from the vehicular traffic lanes by cones placed at 60 foot intervals on the solid
white fog lines ten feet from the curbs. The cones were 28 inches tall, were bright orange,
and had two reflector collars. Although Engleson had attended the Fair on two prior
occasions, she tripped on a traffic cone as she was walking with a friend along one of the
fog lines. She had noticed that cars shared the streets with pedestrians, but stated that she
had not seen any of the cones before her fall. Engleson sued the city, arguing that its
negligent placement of cones and failure to warn fair attendees of their presence had caused
her to trip and sustain personal injuries. The city argued that it had no duty to warn her
because the cones were obvious. What result? See Engleson v. Little Falls Area Chamber
of Commerce, 362 F.3d 525 (8th Cir. 2004).

32. While snowboarding down a slope at Mammoth Mountain Ski Area, 17-year-old
David Graham was engaged in a snowball fight with his 14-year-old brother. As he was
preparing to throw a snowball at his brother, David slammed into Liam Madigan, who was
working as a ski school instructor for Mammoth, and seriously injured him. Madigan sued
Graham for negligence seeking damages for his reckless and dangerous behavior. Graham
contended that the claim was barred under the doctrine of assumption of the risk, arguing
that that the risk of Madigan’s injury was inherent in the sport of snowboarding. See
Mammoth Mountain Ski Area v. Graham, 38 Cal. Rptr.3d 422 (Cal. Ct. App. 2006).

33. Dominic Choate, a 12-year-old boy, and two friends slipped through a hole in the
fence on the south side of the railroad tracks owned by the Indiana Harbor Belt Railroad
Co. A sign on the fence read: “DANGER NO TRESPASSING.” While a train was passing
at approximately 10 miles per hour, Choate decided to impress his friends by attempting to
jump aboard the moving train. He slipped, causing one of his feet to be crushed, which
ultimately led to its amputation. Choate filed an action against the railroad for negligence.
The railroad asserted that it owed Choate, a trespasser, no duty of care. What result? See
Choate v. Indiana Harbor Belt Railroad Co., 980 N.E.2d 58 (Ill. 2012).

34. On September 27, 2001, Pamela Fritz backed into a lamppost as she was attempting
to drive out of the parking lot of a Burger King restaurant in Rockford, Illinois. When she
drove forward from the lamppost, her accelerator stuck, and she lost control of her car. The
car hit a sidewalk adjacent to the restaurant, became airborne, and penetrated the brick half-
wall and windows surrounding the restaurant’s entrance. Detroy Marshall, who was eating
inside the restaurant at the time, was struck by Fritz’s car and fatally injured. Marshall’s
estate sued Burger King for negligence seeking damages. According to the complaint,
Burger King was negligent in designing, constructing, and maintaining a restaurant that
would protect guests from out-of-control vehicles that may crash into the building. Did
Burger King owe Marshall such a duty of care? See Marshall v. Burger King Corp., 856
N.E.2d 1048 (Ill. 2006).

35. Theresa Campisi was shopping at Acme Market. A blind Acme employee was
walking alone with his white aluminum guide cane toward the restroom at the rear of the
store as Campisi walked down a parallel aisle in the same direction. As the blind employee
reached the end of his aisle, his cane extended into the path of Campisi, who was rounding

37
the corner of her aisle and did not see the employee or the cane. Campisi tripped over the
cane, fell to the floor, and sustained several significant injuries, and sued Acme for
negligence. She claimed that the constant presence of a full-time, blind employee presents
a risk to customers who may not be aware that a sightless employee often walks through
the store, and that customers cannot be expected, without sufficient warning, to take
precautions against the dangers presented by the actions of such employees. Did Acme
owe a duty to warn customers of the risks allegedly posed by a disabled full-time employee
on the premises? See Campisi v. Acme Markets, Inc., 856 A.2d 140 (Pa. Super. Ct. 2006).

36. Brazos Higher Education Service, a non-profit corporation located in Waco, Texas,
originates and services student loans. John Wright has been as a financial analyst for
Brazos since November 2003 and works from an office in his home in Silver Spring,
Maryland. As a financial analyst for Brazos, Wright analyses loan portfolios for a number
of transactions, including purchasing portfolios from other lending organizations and
selling bonds financed by student loan interest payments. Before performing each new
financial analysis, Wright receives an electronic database from Brazos’s Finance
Department, which he stores on a laptop computer issued to him by Brazos. When Wright
is performing asset-liability management for Brazos, he requires loan-level details,
including customer personal information, to complete his work. On September 24, 2004,
Wright’s home was burglarized and a number of items were stolen, including the laptop
computer. Wright reported the theft to the local police department, but the police were
unable to apprehend the burglar or recover the laptop. As required by law, Brazos notified
its customers by letter that “some personal information associated with your student loan,
including your name, address, social security number and loan balance, may have been
inappropriately accessed by the third party.” Stacy Guin, who acquired a student loan
through Brazos in August 2002, received the letter. She filed a negligence action against
Brazos for failing to protect the security and confidentiality of her personal information.
Wright lived in a relatively “safe” neighborhood and was unaware of any previous
burglaries on his block or in his immediate neighborhood. Brazos argued that Guin could
not prove proximate causation because the theft of Wright’s laptop from his home was not
reasonably foreseeable. Is Brazos correct? See Guin v. Brazos Higher Education Service
Corp., Inc., 2006 WL 288483 (D. Minn. 2006).

37. On June 2, 2000, a severe thunderstorm, accompanied by strong wind gusts, hit the
Town of Clarkstown, New York, leaving in its wake several downed trees and power lines.
On the evening of June 4th, Richard Clark and his wife surveyed the damage created by
the storm and saw that an 80-foot tree, which was located on adjacent property owned by
the Town of Clarkstown, was tilted toward their property. He was concerned that the tree
might fall, although he could not tell in which direction the tree would fall in the event it
did. The next morning, Clark called the road maintenance supervisor for the Town of
Clarkstown and left a voice mail message conveying that the tree threatened damage either
to his property, the road, or the nearby power lines. At some point during the morning,
Jacqueline Galindo, Clark’s housekeeper, arrived at the house. After greeting Galindo,
Clark left the house to run errands. As he was driving away, he noticed a car that he did
not recognize parked in the driveway. Inside the car was Galindo’s husband, Javier, who
was waiting to pick up his wife after she finished working. Tragically, while Clark was

38
running his errands, the tree fell onto the parked car, causing Javier’s death. Jacqueline
Galindo brought a negligence action naming Clark as a defendant and seeking damages for
the wrongful death of her husband. Can Clark be held liable for failing to warn Galindo of
the danger posed by a leaning tree located on neighboring property? See Galindo v. Town
of Clarkstown, 814 N.E.2d 419 (N.Y. Ct. App. 2004).

38. Just before 8:00 a.m. on Saturday, September 13, 2008, 18-year-old Hiroyuki Joho
was crossing in a designated crosswalk from the eastside passenger platform where
commuter trains arrive from Chicago to the westside passenger platform when he was
struck by an Amtrak train. The train was running within the established speed limit and
sounded a whistle, but it was not clear whether Joho realized that the train was approaching
as he crossed the tracks. A large part of his body was propelled about 100 feet onto the
southbound platform where it struck 58-year old Gayana Zokhrabov from behind,
knocking her to the ground. She sustained a shoulder injury, leg fracture, and a wrist
fracture as a result. Zokhrabov sued Joho’s estate seeking damages on the ground that his
negligence caused her injuries. Did Joho owe Zokhrabov a duty of care to avoid causing
physical harm to Zokhravov as he crossed the tracks? See Zokhrabov v. Park, 963 N.E.2d
1035 (Ill. Ct. App. 2011).

39. Masood Rostai hired Jared Shoultz to be his personal fitness trainer at Gold’s Gym.
On September 11, 2002, Rostai participated in his first training session with Shoultz, who
knew that Rostai was not physically fit and was overweight, but did not fully assess
Rostai’s level of physical fitness. Shoultz was aggressive in his training of Rostai, who
told Shoultz several times that he was tired, sweating profusely, and out of breath. Near
the end of the 60-minute training session, after complaining to Shoultz that he needed a
break and some water, Rostai suffered a heart attack. Rostai sued Shoultz and Gold’s Gym
for negligence. Both defendants argued that assumption of the risk barred Rostai’s claim.
What result? See Rostai v. Neste Enterprises, 41 Cal. Rptr.3d 411 (Cal. Ct. App. 2006).

40. Abigail Ramirez and her infant daughter lived with her parents in an apartment
(Apartment 6) in a building owned by Residential Investments. When the family moved
in, one of the glass panes on the front door of the apartment was missing and a piece of
cardboard covered the opening. Shortly after moving in, Abigail’s mother complained to
the apartment manager and requested the missing pane be replaced. However, the missing
pane was never replaced. Eventually, Abigail’s brother replaced the cardboard with a
piece of plywood; he used finishing nails to tack the plywood to the door. On August 6,
2000, Jesus Vasquez, Abigail’s boyfriend, heard that she was having an affair with her
former boyfriend. Between 8:00 and 9:00 a.m. that morning, Jesus, armed with a knife,
drove to Apartment 6 to confront Abigail. He pounded on the door to Apartment 6 twice,
and became angry “because they weren’t letting [him] in.” When no one responded to his
demands, Jesus removed the plywood panel that replaced the glass pane in the door,
reached through the opening, opened the door from the inside, and entered the apartment.
He confronted Abigail and fatally stabbed her and was later convicted of murder. No one
was aware that Jesus was potentially violent. However, the neighborhood surrounding the
apartment building had experienced the commission of some crimes, including violent
crimes, and there were reports of an alleged rape in the apartment building, although the

39
apartment manager viewed the reports of rape to be questionable. Abigail’s estate sued
the owners of the apartment building asserting that they were negligent by not replacing
the missing pane of glass used by Vasquez to obtain entry and that this substantially
contributed to Abigail’s death. What result? See Vasquez v. Residential Investments, Inc.,
12 Cal. Rptr.3d 846 (Cal. Ct. App. 2004).

41. Kyle Best, an 18-year old driver who was texting while driving his truck, crossed
the center line of the road and collided into motorcycle on which Linda and David Kubert
were riding. The Kuberts were grievously injured as a result. New Jersey prohibits texting
while driving. Linda and David Kubert filed a negligence action against Best as well as
Shannon Colonna, Best’s friend with whom he was texting when the accident occurred.
The Kuberts argued that Colonna knew that Best was driving while he was texting her and
that she breached her duty to avoid texting a person she knew or had reason to know would
view the text while driving a vehicle. Colonna filed a motion to dismiss the claim against
her. Did Colonna breach a duty of care owed to the Kuberts? See Kubert v. Best, 75 A.3d
1214 (N.J. Super. Ct. 2013).

42. On the evening of October 4, 2008, Jason Carlsen went to a party with his friend
Nicholas. While there, Jason consumed alcohol and became highly intoxicated. Nicholas
had driven Jason to the party and felt responsible for ensuring he got home safely. Since
Nicholas’ car had broken down, he asked his roommate Zachary and his girlfriend Sarah
to drive Jason home. They agreed and the three of them left the party around 1:00 am.
After leaving the party, they stopped at a grocery store where Jason stole a fifth of rum.
They then went to a second party where Jason began drinking the rum. From there they
drove to a cliff overlooking the Sacramento River to watch the sunrise. Zachary placed a
blanket near the cliff’s edge for the three of them to sit on and they sat on the blanket
drinking the rum Jason had stolen. As they talked and joked around, Jason stood up and
stepped backwards and fell off the cliff. Sarah and Zachary grabbed the blanket and ran to
the car intending to call 911, but decided not to do so because they were afraid they would
get into trouble. Instead, they attempted to locate Jason by driving along the river. When
they could not find him, they went home. After several hours, they contacted the police
and Jason was eventually found still alive and rescued. Although he could not recall how
or why he fell, Jason was severely injured and sued his two friends for negligence. Sarah
and Zachary filed a motion for summary judgment on the basis that they did not breach a
duty of care owed to Jason. What result? See Carlsen v. Koivumaki, 227 Cal. App.4th 879
(Cal. Ct. App. 2014).

43. Timothy Grebing joined the 24 Hour Fitness health club on November 10, 2011.
On this date, he signed a membership agreement, which included a provision that stated:
“Using the 24 Hour Fitness USA, Inc. (24 Hour) facilities involves the risk of injury to you
or your guest, whether you or someone else causes it. ... In consideration of your
participation in the activities offered by 24 Hour, you understand and voluntarily accept
this risk and agree that 24 Hour ... will not be liable for any injury ... whether related to
exercise or not.” Grebing was injured on May 9, 2012, while using a “low row machine”
at a 24 Hour’s facility. As he was pulling the handlebar during his third or fourth repetition
on his fourth set, the clip failed causing the handlebar to break free from the cable and

40
strike him in the forehead. Grebing suffered injuries to his head, back, and neck. A 24
Hour employee inspected the equipment daily, including the clips on the machines, and
maintained the machines as needed. Grebing sued 24 Hour for negligence. 24 Hour moved
for summary judgment on the basis that Grebing had assumed the risk of injury. What
result? See Grebing v. 24 Hour Fitness USA, Inc., 2015 WL 709117 (Cal. Ct. App. 2015).

44. Vera Dyer owned a home believed to be more than 70 years old. The home had a
cement foundation and floor. A stand-alone garage with a cement floor was constructed in
the 1980s. In September 2004, Maine Drilling & Blasting, Inc. distributed a notice
informing Dyer that it would soon begin blasting rock near her home in connection with a
construction project to replace a bridge and bridge access roads. The notice assured Dyer
“that ground vibrations associated with blasting [would] not exceed the established limits
that could potentially cause damage.” Maine conducted more than 100 blasts between
October 2004 and August 2005. The closest blast was approximately 100 feet from the
Dyer home. Dyer was inside the home during two of the blasts and felt the whole house
shake. In the spring of 2005, Dyer observed several changes to the pre-blasting condition
of her home and garage: (1) there were new cracks in the basement floor, (2) the center
beam in the basement supporting the part of the first floor was sagging, and (3) the center
of the basement floor had dropped by three inches. The retaining wall supporting the
garage had move noticeably. Dyer believed that the damage resulted from vibrations due
to Maine’s blasting activities. Should she file a negligence or strict liability claim against
Maine? See Dyer v. Maine Drilling & Blasting, Inc., 984 A.2d 210 (Me. 2009).

45. S.B. Thompson lived near a battery recycling facility that purchased and acquired
used whole batteries from various suppliers. The batteries were dismantled at the
recycling facility and the recovered lead was sold. The battery suppliers transferred
complete ownership of the used batteries to the recycling facility and had no control over
the operations of the recycling facility with respect to the batteries or otherwise. When
lead from the battery recycling facility seeped onto his property, Thompson and other
nearby residents suffered personal injuries and property damage due to lead contamination.
They filed suit against the battery suppliers on the basis of strict liability. Was the sale of
the batteries to the recycling facility an abnormally dangerous activity? See Thompson v.
Zero Bullet Co., Inc., 692 So.2d 805 (Ala. 1997).

46. Lawrence Hardesty, a tractor-trailer truck driver, picked up a load of stadium

seating equipment for delivery to a National Football League stadium under construction
in Baltimore. The equipment was packaged in large corrugated boxes weighing several
hundred pounds. The shipper, American Seating Co., loaded the trailer while Hardesty
remained in the cab of his truck doing paperwork and napping. When the trailer had been
fully loaded, there was considerable open space between the boxes and the rear door of the
trailer. Truckers and shippers use load bars – expandable metal bracing mechanisms – to
secure freight and prevent movement of the cargo during transit. Hardesty failed to
properly examine the load bars before departing. When he arrived at the Baltimore
destination, Hardesty opened the rear trailer door and the boxes that had shifted to the end
of the trailer fell out and injured him. Hardesty sued American Seating Co. for negligence

41
in securing the boxes. What is American Seating’s best defense? See Hardesty v.
American Seating Co., 194 F. Supp.2d 447 (D. Md. 2002).

47. Norman Sterling sued P&H Mining Equipment, Inc. after developing lung cancer
from his exposure to asbestos. Sterling asserted that while employed by Bethlehem Steel
Corporation loading, unloading, and operating cranes, he was exposed to asbestos-
containing component parts of P&H cranes used in the shipping yard. P&H admitted that
its brakes and wiring contained asbestos. Sterling argued that he developed cancer due to
inhaled dust from brakes and wiring on P&H cranes, though he could not prove how often
he worked on P&H cranes or how closely he worked to them. The evidence showed that
Sterling worked mostly on cranes supplied by other companies and that there were multiple
sources of dust in the shipping yard. Based on these facts, P&H filed a motion for summary
judgment. What result? See Sterling v. P&H Mining Equipment, Inc., 2015 WL 1743156
(Pa. Super. Ct. 2015).

48. Jeffrey and Stacey Stanley purchased their home in 1995. At the time of their
purchase, the Stanleys’ property included a swimming pool that had gone unused for three
years. The pool was enclosed with fencing and a brick wall. After moving in, the Stanleys
drained the pool once but thereafter they allowed rainwater to accumulate in the pool to a
depth of over six feet. They removed a tarp that had been on the pool and also removed
the fencing that had been around two sides of the pool. They did not post any warning or
“no trespassing” signs on their property. Their neighbors, Rickey and Cher Bennett, rented
the house next door and had three young children. Although he had never seen the children
playing near the pool on the Stanleys’ property, Mr. Bennett told his children to stay away
from it. One day, the Bennetts’ 5-year-old son trespassed onto the Bennetts’ land and was
playing near the pool and somehow fell in. Mrs. Bennett attempted to rescue her son, but
both drowned. Mr. Bennett sued the Stanleys for negligence. Did they owe a duty of care
to the Bennetts’ son? See Bennett v. Stanley, 748 N.E.2d 41 (Ohio 2001).

49. Connie Daniell attempted to commit suicide by locking herself inside the trunk of
her Ford LTD. She remained in the trunk for nine days, but survived after finally being
rescued. Later, Daniell brought a negligence action against Ford in an effort to recover for
her resulting physical and psychological injuries. She contended that the LTD was
defectively designed because its trunk did not have an internal release or opening
mechanism. She also argued that Ford was liable for negligently failing to warn her that
the trunk could not be unlocked from within. Did Ford have a duty to warn? See Daniell
v. Ford Motor Co., 581 F. Supp. 728 (D.N.M. 1984).

50. After shopping in the Kroger grocery store one afternoon, Lu Ann Plonski
proceeded to her car in the store’s parking lot, placed her purse in the shopping cart she
was using, opened the trunk of her car, and began loading groceries into the trunk. She
noticed a man who was not a Kroger employee or patron running toward her. The man
grabbed her purse and then picked up Plonski, threw her into the trunk of the car, and began
slamming the trunk lid on her legs. When the man looked away, Plonski jumped out of the
trunk and ran into the store and the man fled the scene with Plonski’s purse. Plonski filed
a negligence action against Kroger contending that Kroger was liable for the injuries she

42
suffered. The evidence showed that the Kroger store was located in a part of the city that
has a reputation for low levels of criminal activity, and that in the two-year period before,
there was only one report of criminal activity occurring on the store’s premises – an
incident in which a female customer had been attacked in the parking lot by a man who
attempted to drive off in her car. Plonski had shopped at the Kroger store approximately
one hundred times without incident and admitted feeling safe on the premises. Kroger filed
a motion for summary judgment. Should the court grant the motion? See Kroger Co. v.
Plonski, 930 N.E.2d 1 (Ind. 2010).

51. On June 14, 2007, a two-vehicle accident involving a pick-up truck and a tractor
trailer occurred at the intersection of Highway 31-E and Highway 231 in Allen County,
Kentucky. Christopher Allen was the driver of the pickup truck and the tractor trailer was
owned by Ingram Trucking. According to the police report, Allen carelessly ran a red light
and hit the tractor trailer broadside, causing property damage in excess of $11,000. Is Allen
liable to Ingram Trucking for trespass to personal property? See Ingram Trucking, Inc. v.
Allen, 372 S.W.3d 870 (Ky. Ct. App. 2012).

52. Kevin Washington was riding his bicycle in the curbside lane on the right side of a
large trash truck, close enough to touch it, when the driver suddenly turned right in front
of him. Washington collided with the truck, which was owned by A & H Garcias Trash
Hauling, and was severely injured. As he approached the intersection, the truck driver did
not check his passenger side mirror before beginning the turn. Washington admitted that
he was not paying close attention to the truck’s flashing turn signal because he did not think
that the driver was going to make a turn. Washington sued A & H for the negligence of its
driver. Is Washington entitled to recover damages from A & H? See Washington v. A &
H Garcias Trash Hauling Co., 584 A.2d 544 (D.C. 1990).

53. Darrell Marks was working as a deliveryman for King’s Quality Foods, which
delivered items to various grocery stores, including the Redner’s Warehouse Market.
Marks made deliveries to Redner’s approximately twice per month. When making
deliveries to Redner’s, he was required to unload the products from his delivery truck onto
a handcart, and bring the handcart into the service entrance of the store to the receiver. On
August 20, 2012, while pulling a hand truck containing products into the service entrance
of the Redner’s warehouse, Marks tripped on the forks of a pallet jack that was located just
inside the threshold of the door and fell to the ground, injuring his knee. A pallet jack is a
tool used to lift and move goods in a warehouse. Although Marks knew from prior
deliveries that the warehouse in which he was entering often had pallet jacks inside, he
looked straight ahead as he walked into the warehouse, not at the ground to look for
obstructions in his path. Marks sued Redner’s for negligence. Redner’s argued that Marks
could not recover because he was contributorily negligent in bringing about his own injury.
What result? See Marks v. Redner’s Warehouse Markets, 2016 WL 639043 (Pa. Super.
Ct. 2016).

43
 CONTRACTS
PITTSLEY v. HOUSER
875 P.2d 232 (Idaho Ct. App. 1994)

In September of 1988, Jane Pittsley contracted with Hilton Contract Carpet Co. for
the installation of carpet in her home for $4,402. Hilton paid the installers $700 to lay the
carpet in Pittsley’s home. After the carpet was installed, Pittsley complained to Hilton that
some seams were visible, that gaps appeared, that the carpet did not lie flat in all areas,
and that it failed to reach the wall in certain locations. Although Hilton made various
attempts to fix the installation, Pittsley was not satisfied with the work. Eventually, Pittsley
refused any further efforts to fix the carpet. Pittsley initially paid Hilton $3,500 on the
contract, but refused to pay the remaining balance of $902.
Pittsley later filed suit, seeking rescission of the contract, return of the $3,500, and
other damages. Hilton counterclaimed for the balance remaining on the contract. At trial,
the magistrate found that there were defects in the installation and that the carpet had been
installed in an unworkmanlike manner, but that there was a lack of evidence about
damages. The trial court awarded Pittsley $400 damages and awarded Hilton $902 on its
counterclaim, representing the money remaining on the contract. Pittsley appealed to the
district court, claiming that the transaction involved was governed by the UCC and
arguing that a different result would have been reached had the UCC been applied. The
district court agreed with Pittsley’s argument, reversing and remanding the case to the
magistrate to make additional findings of fact and to apply the UCC to the transaction.
Hilton appealed.

Swanstrom, Judge. Hilton argues that Such hybrid transactions, involving

there were no defects in the goods that both goods and services, raise difficult
were the subject of the transaction, only questions about the applicability of the
in the installation, making application of UCC. [According to] … the
the UCC inappropriate. The single “predominant factor” test:
question upon which this appeal depends The test for inclusion or exclusion is
is whether the UCC is applicable to the not whether they are mixed, but,
subject transaction. If the underlying granting that they are mixed, whether
transaction involved the sale of “goods,” their predominant factor, their thrust,
then the UCC would apply. If the their purpose, reasonably stated, is the
transaction did not involve goods, but rendition of service, with goods
rather was for services, then application incidentally involved (e.g., contract
of the UCC would be erroneous. Section with artist for painting) or is a
2-105(1) defines “goods” as “all things transaction of sale, with labor
which are movable at the time of incidentally involved (e.g.,
identification to the contract for sale.” installation of a water heater in a
Although there is little dispute that bathroom).
carpets are “goods,” the transaction in This test essentially involves
this case also involved installation, a consideration of the contract in its
service. entirety, applying the UCC to the entire
contract or not at all. …

44
 Applying the predominant factor test contract for the purpose of obtaining
to the case before us, we conclude that the carpet of a certain quality and color. It
UCC was applicable to the subject does not appear that the installation,
transaction. The record indicates that the either who would provide it or the nature
contract between the parties called for of the work, was a factor in inducing
“165 yds Masterpiece #2122 – Installed” Pittsley to choose Hilton as the carpet
for a price of $4,319.50. There was an supplier. On these facts, we conclude that
additional charge for removing the the sale of the carpet was the predominant
existing carpet. The record indicates that factor in the contract, with the installation
Hilton paid the installers $700 for the being merely incidental to the purchase.
work done in laying Pittsley’s carpet. It Judgment vacated in favor of Pittsley
appears that Pittsley entered into this and remanded for further proceedings.

45
 LEONARD v. PEPSICO, INC.
88 F. Supp.2d 116 (S.D.N.Y. 1999)

John Leonard viewed a “Pepsi Stuff” television commercial encouraging

consumers to collect “Pepsi Points” from specially marked packages of Pepsi or Diet
Pepsi Cola and redeem those points for merchandise featuring the Pepsi logo. The
commercial opens upon an idyllic, suburban morning, where the chirping of birds in sun-
dappled trees welcomes a paperboy on his morning route. As the newspaper hits the stoop
of a conventional two-story house, the tattoo of a military drum introduces the subtitle,
“MONDAY 7:58 AM.” The stirring strains of a martial air mark the appearance of a well-
coiffed teenager preparing to leave for school, dressed in a shirt emblazoned with the Pepsi
logo, a red-white-and-blue ball. While the teenager confidently preens, the military
drumroll again sounds as the subtitle “T-SHIRT 75 PEPSI POINTS” scrolls across the
screen. Bursting from his room, the teenager strides down the hallway wearing a leather
jacket. The drumroll sounds again, as the subtitle “LEATHER JACKET 1450 PEPSI
POINTS” appears. The teenager opens the door of his house and, unfazed by the glare of
the early morning sunshine, puts on a pair of sunglasses. The drumroll then accompanies
the subtitle “SHADES 175 PEPSI POINTS.” A voiceover then intones, “Introducing the
new Pepsi Stuff catalog,” as the camera focuses on the cover of the catalog.
The scene then shifts to three young boys sitting in front of a high school building.
The boy in the middle is intent on his Pepsi Stuff Catalog, while the boys on either side are
each drinking Pepsi. The three boys gaze in awe at an object rushing overhead, as the
military march builds to a crescendo. The Harrier Jet is not yet visible, but the observer
senses the presence of a mighty plane as the extreme winds generated by its flight create a
paper maelstrom in a classroom devoted to an otherwise dull physics lesson. Finally, the
Harrier Jet swings into view and lands by the side of the school building, next to a bicycle
rack. Several students run for cover, and the velocity of the wind strips one hapless faculty
member down to his underwear. While the faculty member is being deprived of his dignity,
the voiceover announces: “Now the more Pepsi you drink, the more great stuff you’re
gonna get.” The teenager opens the cockpit of the fighter and can be seen, helmetless,
holding a Pepsi. “[L]ooking very pleased with himself,” the teenager exclaims, “Sure
beats the bus,” and laughs. The military drumroll sounds a final time, as the following
words appear: “HARRIER FIGHTER 7,000,000 PEPSI POINTS.” A few seconds later,
the following appears in more stylized script: “Drink Pepsi – Get Stuff.” With that
message, the music and the commercial end with a triumphant flourish.
Inspired by this commercial, Leonard set out to obtain a Harrier Jet. He consulted
the Pepsi Stuff catalog. The rear foldout pages of the catalog contained directions for
redeeming Pepsi Points for merchandise. These directions note that merchandise may be
ordered “only” with the original Order Form. The catalog notes that in the event that a
consumer lacks enough Pepsi Points to obtain a desired item, additional Pepsi Points may
be purchased for ten cents each; however, at least fifteen original Pepsi Points must
accompany each order. The catalog’s order form contained no entry or description for a
Harrier jet. Although Leonard initially set out to collect 7,000,000 Pepsi Points by
consuming Pepsi products, it soon became clear to him that he “would not be able to buy
(let alone drink) enough Pepsi to collect the necessary Pepsi Points fast enough.”
Reevaluating his strategy, he “focused for the first time on the packaging materials in the

46
Pepsi Stuff promotion,” and realized that buying Pepsi Points would be a more promising
option. Through acquaintances, he ultimately raised about $700,000.
On March 27, 1996, Leonard submitted an Order Form, fifteen original Pepsi
Points, and a check for $700,008.50. At the bottom of the order form, he wrote in “1
Harrier Jet” in the “Item” column and “7,000,000” in the “Total Points” column. In a
letter accompanying his submission, Leonard stated that the check was to purchase
additional Pepsi Points “expressly for obtaining a new Harrier jet as advertised in your
Pepsi Stuff commercial.” Several months later, Pepsico rejected Leonard’s submission
and returned the check, explaining that the item he requested was not part of the Pepsi
Stuff collection, and only catalog merchandise could be redeemed under this program.
Leonard sued Pepsico for breach of contract and Pepsico moved for summary judgment.

Wood, District Judge. Plaintiff brought Points, constituted the offer. There would
this action seeking, among other things, be no enforceable contract until
specific performance of an alleged offer defendant accepted the Order Form and
of a Harrier Jet, featured in a television cashed the check.
advertisement for defendant’s “Pepsi The exception to the rule that
Stuff” promotion. Defendant has moved advertisements do not create any power
for summary judgment … . of acceptance in potential offerees is
where the advertisement is “clear,
Advertisements as Offers definite, and explicit, and leaves nothing
open for negotiation,” in that
The general rule is that an advertisement circumstance, “it constitutes an offer,
does not constitute an offer. ... An acceptance of which will complete the
advertisement is not transformed into an contract.” In Lefkowitz v. Great
enforceable offer merely by a potential Minneapolis Surplus Store, 86 N.W.2d
offeree’s expression of willingness to 689 (Minn. 1957), defendant had
accept the offer through, among other published a newspaper announcement
means, completion of an order form. In stating: “Saturday 9 AM Sharp, 3 Brand
Mesaros v. United States, 845 F.2d 1576 New Fur Coats, Worth to $100.00, First
(Fed. Cir. 1988), for example, the Come First Served $1 Each.” Mr. Morris
plaintiffs sued the United States Mint for Lefkowitz arrived at the store, dollar in
failure to deliver a number of Statue of hand, but was informed that under
Liberty commemorative coins that they defendant’s “house rules,” the offer was
had ordered. When demand for the coins open to ladies, but not gentlemen. The
proved unexpectedly robust, a number of court ruled that because plaintiff had
individuals who had sent in their orders in fulfilled all of the terms of the
a timely fashion were left empty-handed. advertisement and the advertisement was
The court [held that] ... spurned coin specific and left nothing open for
collectors could not maintain a breach of negotiation, a contract had been formed.
contract action because no contract would The present case is distinguishable
be formed until the advertiser accepted from Lefkowitz. First, the commercial
the order form and processed payment. ... cannot be regarded in itself as sufficiently
Under these principles, plaintiff’s letter definite, because it specifically reserved
of March 27, 1996, with the Order Form the details of the offer to a separate
and the appropriate number of Pepsi writing, the Catalog. The commercial

47
itself made no mention of the steps a In the present case, the Harrier Jet
potential offeree would be required to commercial did not direct that anyone
take to accept the alleged offer of a who appeared at Pepsi headquarters with
Harrier Jet. The advertisement in 7,000,000 Pepsi Points on the Fourth of
Lefkowitz, in contrast, “identified the July would receive a Harrier Jet. Instead,
person who could accept.” Second, even the commercial urged consumers to
if the Catalog had included a Harrier Jet accumulate Pepsi Points and to refer to
among the items that could be obtained the Catalog to determine how they could
by redemption of Pepsi Points, the redeem their Pepsi Points. The
advertisement of a Harrier Jet by both commercial sought a reciprocal promise,
television commercial and catalog would expressed through acceptance of, and
still not constitute an offer. As the compliance with, the terms of the Order
Mesaros court explained, the absence of Form. As noted previously, the Catalog
any words of limitation such as “first contains no mention of the Harrier Jet.
come, first served,” renders the alleged Plaintiff states that he “noted that the
offer sufficiently indefinite that no Harrier Jet was not among the items
contract could be formed. “A customer described in the catalog, but this did not
would not usually have reason to believe affect [his] understanding of the offer.” It
that the shopkeeper intended exposure to should have. Because the alleged offer in
the risk of a multitude of acceptances this case was, at most, an advertisement
resulting in a number of contracts to receive offers rather than an offer of
exceeding the shopkeeper’s inventory.” reward, plaintiff cannot show that there
There was no such danger in Lefkowitz, was an offer made in the circumstances of
owing to the limitation “first come, first this case.
served.”
Objective Reasonable Person Standard
Rewards as Offers
Plaintiff’s understanding of the
In opposing the present motion, commercial as an offer must also be
plaintiff largely relies on a different rejected because the Court finds that no
species of unilateral offer, involving objective person could reasonably have
public offers of a reward for performance concluded that the commercial actually
of a specified act. ... “[A]dvertisements offered consumers a Harrier Jet. In
offering rewards ... are offers to anybody evaluating the commercial, the Court
who performs the conditions named in must not consider defendant’s subjective
the advertisement, and anybody who does intent in making the commercial, or
perform the condition accepts the offer.” plaintiff’s subjective view of what the
… [Various] “reward” cases underscore commercial offered, but what an
the distinction between typical objective, reasonable person would have
advertisements, in which the alleged offer understood the commercial to convey. If
is merely an invitation to negotiate for it is clear that an offer was not serious,
purchase of commercial goods, and then no offer has been made. An obvious
promises of reward, in which the alleged joke, of course, would not give rise to a
offer is intended to induce a potential contract. On the other hand, if there is no
offeree to perform a specific action, often indication that the offer is “evidently in
for noncommercial reasons. jest,” and that an objective, reasonable

48
person would find that the offer was relative difficulty and danger of piloting
serious, then there may be a valid offer. a fighter plane in a residential area, as
Plaintiff’s insistence that the opposed to taking public transportation.
commercial appears to be a serious offer Third, the notion of traveling to school
requires the Court to explain why the in a Harrier Jet is an exaggerated
commercial is funny. The commercial is adolescent fantasy. In this commercial,
the embodiment of what defendant the fantasy is underscored by how the
appropriately characterizes as “zany teenager’s schoolmates gape in
humor.” First, the commercial suggests, admiration, ignoring their physics lesson.
as commercials often do, that use of the The force of the wind generated by the
advertised product will transform what, Harrier Jet blows off one teacher’s
for most youth, can be a fairly routine and clothes, literally defrocking an authority
ordinary experience. The military tattoo figure. As if to emphasize the fantastic
and stirring martial music, as well as the quality of having a Harrier Jet arrive at
use of subtitles in a Courier font that school, the Jet lands next to a plebeian
scroll terse messages across the screen, bike rack. This fantasy is, of course,
such as “MONDAY 7:58 AM,” evoke extremely unrealistic. No school would
military and espionage thrillers. The provide landing space for a student’s
implication of the commercial is that fighter jet, or condone the disruption the
Pepsi Stuff merchandise will inject drama jet’s use would cause.
and moment into hitherto unexceptional Fourth, the primary mission of a
lives. The commercial in this case thus Harrier Jet, according to the United States
makes the exaggerated claims similar to Marine Corps, is to “attack and destroy
those of many television advertisements: surface targets under day and night visual
that by consuming the featured clothing, conditions.” ... In light of the Harrier Jet’s
car, beer, or potato chips, one will well-documented function in attacking
become attractive, stylish, desirable, and and destroying surface and air targets,
admired by all. A reasonable viewer armed reconnaissance and air
would understand such advertisements as interdiction, and offensive and defensive
mere puffery, not as statements of fact, anti-aircraft warfare, depiction of such a
and refrain from interpreting the promises jet as a way to get to school in the
of the commercial as being literally true. morning is clearly not serious even if, as
Second, the callow youth featured in plaintiff contends, the jet is capable of
the commercial is a highly improbable being acquired “in a form that eliminates
pilot, one who could barely be trusted [its] potential for military use.”
with the keys to his parents’ car, much Fifth, the number of Pepsi Points the
less the prize aircraft of the United States commercial mentions as required to
Marine Corps. Rather than checking the “purchase” the jet is 7,000,000. To amass
fuel gauges on his aircraft, the teenager that number of points, one would have to
spends his precious preflight minutes drink 7,000,000 Pepsis (or roughly 190
preening. The youth’s concern for his Pepsis a day for the next hundred years –
coiffure appears to extend to his flying an unlikely possibility), or one would
without a helmet. Finally, the teenager’s have to purchase approximately $700,000
comment that flying a Harrier Jet to worth of Pepsi Points. The cost of a
school “sure beats the bus” evinces an Harrier Jet is roughly $23 million dollars,
improbably insouciant attitude toward the a fact of which plaintiff was aware when

49
he set out to gather the amount he would conclude that purchasing a fighter
believed necessary to accept the alleged plane for $700,000 is a deal too good to
offer. Even if an objective, reasonable be true. Motion for summary judgment
person were not aware of this fact, he granted in favor of Pepsico.

50
 FAMILY VIDEO MOVIE CLUB, INC. v. HOME FOLKS, INC.
827 N.E.2d 582 (Ind. Ct. App. 2005)

Family Video Movie Club, Inc. wanted to buy the building in which Home Folks,
Inc. was a tenant. Family Video offered to pay Home Folks $35,000 to vacate the premises
well before its lease expired. Before Home Folks accepted Family Video’s written offer,
however, the building burned to the ground as a result of arson. Two days after the fire,
the owners of Home Folks signed the offer letter they had received from Family Video,
indicating that they “agree[d] with” the terms and conditions of the buyout proposed by
Family Video. When Home Folks sought payment of the $35,000 from Family Video, no
payment was made. Home Folks sued Family Video, alleging that a contract was formed
and that Family Video should pay Home Folks the $35,000 contemplated by the contract.
The trial court concluded that a contract existed and ordered Family Video to pay Home
Folks $35,000 in damages.

Vaidik, Judge. Unless an offer to form a Video’s purpose in “the making and
contract specifically states how long it is performance of the contract,” Home
open to acceptance, an offer is open only Folks was on notice that it was no longer
for a reasonable time. A reasonable time a reasonable time to accept the offer once
“is the time that a reasonable person in the the structure ceased to exist.
exact position of the offeree would Moreover, “[t]he power of acceptance
believe to be satisfactory to the offeror.” may be terminated by the death or
How much time is reasonable for an destruction of a person or thing essential
offeree to accept an offer depends on the for performance ... .” In this case, the
facts of each case. “The purpose of the destruction by fire of the structure subject
offeror, to be attained by the making and to Home Folks’ leasehold terminated
performance of the contract, will affect Home Folks’ time to accept Family
the time allowed for acceptance, if it is or Video’s offer. The structure’s existence
should be known to the offeree. In such was “essential for performance” of the
case there is no power to accept after it is contract, and Home Folks lost its capacity
too late to attain that purpose.” to accept the offer from Family Video
In this case, Family Video clearly when it was destroyed by fire. ...
bargained for Home Folks to abandon its This conclusion is buttressed by the
interest in the leasehold well before well-established line of cases holding that
Home Folks’ lease would otherwise the offeree’s power of acceptance is
terminate. The fiery destruction of Home terminated by the death of the offeror.
Folks’ building made it impossible for Because the structure, an element
Family Video to get what it had bargained essential to the achievement of the
for. The unexpected and premature purpose of the contract, was destroyed
destruction of a significant portion of the before Home Folks accepted the offer, the
subject matter of the offer made it power of acceptance was terminated and
unreasonable to continue the time for no contract was formed. Judgment
Home Folks to accept the offer. Also, reversed in favor of Family Video.
because Home Folks knew Family

51
 UNION CARBIDE CORP. v. OSCAR MAYER FOODS CORP.
947 F.2d 1333 (7th Cir. 1991)

Union Carbide sold Oscar Mayer plastic casings that Oscar Mayer uses in
manufacturing sausages. When Oscar Mayer needed casings, it would phone Union
Carbide and tell it how many it needed and Union Carbide would ship the casings the next
day. After the casings arrived, Oscar Mayer would send Union Carbide a purchase order
for the shipment. At about the same time, Union Carbide would send Oscar Mayer an
invoice for the shipment. On the back of each invoice was an indemnity clause that read:
In addition to the purchase price, Buyer shall pay Seller the amount of all
governmental taxes ... that Seller may be required to pay with respect to the
production, sale or transportation of any materials delivered hereunder.
The prices in Union Carbide’s invoices to Oscar Mayer included two 1 percent
sales taxes that are applicable to sales that originate in the city of Chicago. In 1980,
another one of Oscar Mayer’s suppliers of plastic sausage casings began charging a price
that was 1 percent lower than Union Carbide’s. This supplier had begun accepting orders
at an office outside of Chicago because it decided that it did not have to pay one of the
sales taxes. When Oscar Mayer informed Union Carbide of this, Union Carbide instructed
its customers to send their orders to an address outside Chicago, too, and it stopped paying
both sales taxes and therefore deleted them from the invoices it sent Oscar Mayer. As such,
Union Carbide had met and beat the other supplier’s discount by lowering its price 2
percent compared to the other supplier’s reduction of 1 percent.
In 1988, however, the Illinois tax authorities decided that the two sales taxes were
due despite the change of address and assessed Union Carbide $88,000 in back taxes on
sales to Oscar Mayer and $55,000 in interest on those sales. Union Carbide paid this and
then brought suit against Oscar Mayer to recover what it had paid, claiming that Oscar
Mayer had agreed to indemnify it for all sales tax liability. It relied on the provision printed
on the back of its invoices to Oscar Mayer. The trial court granted a summary judgment
in favor of Oscar Mayer, and Union Carbide appealed.

Posner, Circuit Judge. The common object, because they fill out the contract
law rule was that if the purported in an expectable fashion, and hence do
acceptance of an offer was not identical not alter it materially. If a term added by
to the offer, the acceptance was a fresh the offeree in his acceptance [is] a
offer and had to be expressly accepted by material alteration of the offer, the
the original offeror for the parties to have acceptance is still effective, but the term
a contract. This “mirror image” … is is not: that is, the contract is enforceable
changed by the Uniform Commercial minus the term the offeree tried to add.
Code, which allows an acceptance to An alteration is material if consent to it
make a contract even if it adds terms to cannot be presumed. What is expectable,
the offer. Moreover, if it is a contract hence unsurprising, is okay; what is
between “merchants” (as Union Carbide unexpected, hence surprising, is not.
and Oscar Mayer are) the additional This is not the end of the analysis,
terms become part of the contract. But however. Even if the alteration is
not any additional terms; only those to material, the other party can, of course,
which the offeror would be unlikely to decide to accept it. Put differently,

52
consent can be inferred from other things What difference does it make, asks Union
besides the unsurprising character of the Carbide, if the increase took the form of
new term: even from silence, in the face an assessment of back taxes? It makes a
of a course of dealings that makes it big difference, amounting to a material
reasonable for the other party to infer alteration to which Oscar Mayer did not
consent from a failure to object. An consent either explicitly or implicitly. If
offeror can protect himself against a tax increase showed up on an invoice,
additional terms, material or not, by Oscar Mayer would have to pay but might
expressly limiting acceptance to the terms then decide to cease buying casings from
of the offer. … Union Carbide does not Union Carbide, as it had every right to …
question that for purposes of our decision switch at will to other suppliers some of
the purchase orders by Oscar Mayer are whom might not be subject to the tax. To
the offers and Union Carbide’s invoices assume responsibility for taxes shown on
are the acceptances … . So the indemnity an individual invoice is quite different
clause was binding on Oscar Mayer only from assuming an open-ended, indeed
if the clause did not work a material incalculable, liability for back taxes. The
alteration of the terms in the purchase tax clause altered the contract materially;
orders. and since the clause was at best
Those [purchase] orders … contain a ambiguous, this is not a case where
space for sales tax to be added into the consent can realistically be inferred from
purchase price, and Union Carbide points Oscar Mayer’s silence in the face of a
out that, consistent with this indication of succession of acceptances (Union
willingness to pay sales tax, Oscar Mayer Carbide’s invoices) containing the new
paid uncomplainingly all sales taxes that term. There was no breach of contract.
appeared on Union Carbide’s invoices. If Judgment affirmed in favor of Oscar
the sales tax rates had risen, Oscar Mayer Mayer.
would have had to pay the higher rates.

53
 OKOSA v. HALL
718 A.2d 1223 (N.J. Super. Ct. 1998)

Obianuju Okosa and her husband, Peter, were insured under an automobile policy
with New Jersey Citizens United Reciprocal Exchange (NJCURE). The Okosas’ policy
required a quarterly payment to be made on February 28, 1994. At the close of business
on February 28, 1994, the insurance carrier directed a letter to the Okosas which was
posted on March 1, 1994, that advised the Okosas that they had failed to pay the $347.50
installment then due and that their policy would be automatically canceled at 12:01 a.m.
on March 16, 1994, unless payment was made by that date. The letter further advised:
If we receive payment on or before the cancellation date, we will continue
your policy with no interruption in the protection it affords. If you’ve
recently mailed your payment, please disregard this notice.
On March 15, 1994, while the policy was still in effect, the Okosas mailed, by
certified mail, a check for the required payment. The very next day, Okosa was involved
in an accident with Tawn D. Hall, who was uninsured. It is not known exactly when
plaintiffs’ check was received, but NJCURE deposited and “cashed” the check on March
22, 1994. The Okosas filed a claim for benefits pursuant to the policy, but were told in
response to their claim that no benefits would be paid because the policy had been canceled
prior to the accident. The Okosas bought suit against Hall and NJCURE. The trial court
granted summary judgment in favor of the defendants. The Okosas appealed.

Kimmelman, J.A.D. [The Okosas] same medium, and constitutes that

contend that the …“Mailbox Rule” medium his agent to receive his
applies … and that the installment acceptance; that the acceptance,
payment mailed on March 15, 1994, when mailed, is then constructively
constituted a timely payment made prior communicated to the offeror.
to 12:01 a.m. on March 16, 1994. There is no question in this case that
Generally speaking, the Mailbox Rule [NJCURE] addressed plaintiffs by mail
sanctions the formation or completion of concerning their tardy payment. Its
a contractual undertaking upon the act of letter of February 28, 1994, posted March
mailing where the use of the mail is 1, 1994, invited plaintiffs’ response with
authorized by the other party as the payment by mail. In so responding,
medium for response. The rule is plaintiffs did so by means of certified
succinctly set forth as follows: mail. The use of certified mail by
Where parties are at distance from plaintiffs was [wise] because it insured
one another, and an offer is sent by proof of mailing and its use avoided the
mail, … the reply accepting the offer thorny issue which would arise from a
may be sent through the same fraudulent response by them that post-
medium, and, if it is so sent, the dated the accident. ...
contract will be complete when the [B]y the authorizing the use of mail as
acceptance is mailed, and beyond the a means of paying premiums, [NJCURE]
acceptor’s control; the theory being constituted the postal authorities as its
that, when one makes an offer agent. Accordingly, the decision in this
through the mail, he authorizes the matter is controlled by the Mailbox Rule.
acceptance to be made through the Reversed and remanded.

54
 SKEBBA v. KASCH
724 N.W.2d 408 (Wis. Ct. App. 2006)

William Skebba, a salesman, worked for many years for M.W. Kasch Co., which
was owned by Jeffrey C. Kasch. M.W. Kasch Co. experienced serious financial problems
in 1993, and Skebba was solicited by another company to leave Kasch and work for them.
When Skebba told Kasch he was accepting the new opportunity, Kasch asked what it would
take to get him to stay. Skebba told Kasch that he needed security for his retirement and
family and would stay if Kasch agreed to pay him $250,000 if one of these three conditions
occurred: (1) the company was sold; (2) Skebba was terminated; or (3) Skebba retired.
Kasch promised to do so and said he would have a written agreement drawn up. Skebba
turned down the job opportunity and stayed with Kasch from December 1993 through
1999. Over the years, Skebba repeatedly asked Kasch for a written summary of their
agreement; however, none was ever produced.
In 1999, the assets of M.W. Kasch Co. were sold, but Kasch denied the existence of
the agreement, and refused to pay Skebba the $250,000. Skebba sued, alleging breach of
contract and promissory estoppel. The jury found that there was no contract, but that
Kasch had made the promise to Skebba. It also held that Skebba relied to his detriment on
the promise, that the reliance was foreseeable, and that Skebba suffered damages in the
amount of $250,000. However, the trial court judge ruled that Skebba failed to prove
damages, because he did not prove what he would have earned had he taken the other job.
Skebba appealed.

Kessler, Judge. The purpose of times and he avoided the damage that he
promissory estoppel is to enforce believed Skebba’s leaving could have had
promises where the failure to do so is on M.W. Kasch’s reputation in the
unjust. [The conditions for a cause of industry. Accordingly, to prevent
action based on promissory estoppel are injustice, the equitable remedy for
as follows]: Skebba to receive is Kasch’s specific
(1) Was the promise one which the performance promised – payment of the
promisor should reasonably expect to $250,000. ... [O]therwise Kasch will
induce action or forbearance of a enjoy all of the benefits of induced
definite and substantial character on reliance while Skebba will be deprived of
the part of the promisee? that which he was promised, with no
(2) Did the promise induce such other available remedy to substitute fairly
action or forbearance? for the promised reward. …
(3) Can injustice be avoided only by Skebba’s forbearance of other
enforcement of the promise? employment for six years from the 1993
In this case, Skebba performed – he promise the jury found occurred was both
remained at M.W. Kasch – in reliance on definite and substantial. ... “[T]he extent
Kasch’s promise to pay $250,000 to him to which the action or forbearance
if one of three conditions occurred. corroborates evidence of the making and
Kasch enjoyed the fruits of Skebba’s terms of the promise, or the making and
reliance – he kept on a top salesperson to terms are otherwise established by clear
help the company through tough financial and convincing evidence,” is established

55
by the jury finding that Kasch made the never a part of the calculus of the promise
promise, by no evidence that the promise made and relied upon. Kasch never
was made any time other than December proposed to better the salary or bonus
1993 or early in 1994, and it is undisputed offered. Neither Kasch nor Skebba
that Skebba not only turned down other mention any discussion about a way for
employment at that time but also Kasch to retain Skebba other than the
remained with Kasch through financially now disputed payment. Rather, Kasch’s
difficult times for the company until the promise was to pay Skebba $250,000 if
sale of the business in 1999. “[T]he one of three conditions occurred. One
reasonableness of the action or triggering condition occurred – the
forbearance” and “the extent to which the business was sold while Skebba was still
action or forbearance was foreseeable by employed by Kasch. Hence, the damage
the promisor” is supported by the calculation required by the trial court,
undisputed fact that Kasch knew Skebba which might be appropriate in other
had another job opportunity in 1993, that cases, has no reasonable application to
Kasch believed Skebba’s leaving would the facts here. Rather, … while
damage the company in the industry, and “[e]nforcement of a promise does not
that Kasch wanted Skebba to stay. necessarily mean Specific Performance,”
Kasch’s promise achieved Kasch’s specific performance is neither precluded
objectives: Skebba stayed even though nor disfavored as a remedy for
the company was in severe financial promissory estoppel; preventing
difficulties. In short, every factor this injustice is the objective. In this case,
court requires to be considered supports specific performance is the necessary
enforcement of the promise through enforcement mechanism to prevent
promissory estoppel. ... injustice for Skebba’s reliance on the
Skebba’s loss has nothing to do with promise the jury found Kasch had made
what he might have earned on another to him. Reversed and remanded in
job. Income from the rejected job was favor of Skebba.

56
 STAMBOVSKY v. ACKLEY
572 N.Y.S.2d 672 (N.Y. Sup. Ct. App. Div. 1991)

Jeffrey Stambovsky, a resident of New York City, contracted to purchase a house in

the Village of Nyack, New York, from Helen Ackley. The house was widely reputed to be
haunted by poltergeists, which Ackley and members of her family had reportedly seen. A
poltergeist is a ghost. She described hearing footsteps, slamming doors, and beds being
violently shaken. However, Ackley told neighbors that she peacefully co-existed with the
poltergeists. Neither Ackley nor her real estate agent told Stambovsky about the
poltergeists before he bought the house. Since he was from New York City, he was unaware
of the history surrounding the house. When Stambovsky learned of the house’s reputation,
however, he promptly filed an action to rescind the contract. The trial court dismissed his
complaint, and Stambovsky appealed.

Rubin, Justice. The unusual facts of this From the perspective of a person in the
case clearly warrant a grant of equitable position of the plaintiff, a very practical
relief to the buyer who, as a resident of problem arises with respect to the
New York City, cannot be expected to discovery of a paranormal phenomenon:
have any familiarity with the folklore of “Who you gonna call?” as the title song
the Village of Nyack. Not being a to the movie Ghostbusters asks.
“local,” Stambovsky could not readily Applying the strict rule of caveat emptor
learn that the home he had contracted to to a contract involving a house possessed
purchase is haunted. Whether the source by poltergeists conjures up visions of a
of the spectral apparitions seen by Ackley psychic or medium routinely
are parapsychic or psychogenic, having accompanying the structural engineer and
reported their presence in both a national Terminix man on an inspection of every
publication (Reader’s Digest) and the home subject to a contract of sale. The
local press (in 1977 and 1982, doctrine of caveat emptor requires that a
respectively), Ackley is estopped to deny buyer act prudently to assess the fitness
their existence and, as a matter of law, the and value of his purchase. It should be
house is haunted. More to the point, apparent, however, that the most
however, no divination is required to meticulous inspection and the search
conclude that it is Ackley’s promotional would not reveal the presence of
efforts in publicizing her close encounters poltergeists at the premises or unearth the
with these spirits which fostered the property’s ghoulish reputation in the
home’s reputation in the community. In community. Therefore, there is no sound
1989, the house was included in a five- policy reason to deny Stambovsky relief
home walking tour of Nyack and for failing to discover a state of affairs
described in a November 27th newspaper which the most prudent purchaser would
article as a “riverfront Victorian (with not be expected to even contemplate.
ghost).” The impact of the reputation Where a condition which has been
thus created goes to the very essence of created by the seller materially impairs
the bargain between the parties, greatly the value of the contract and is peculiarly
impairing both the value of the property within the knowledge of the seller or
and its potential for resale. ... unlikely to be discovered by a prudent
purchaser exercising due care,

57
nondisclosure constitutes a basis for was possessed. Having undertaken to
rescission as a matter of equity. Any inform the public at large, to whom she
other outcome places upon the buyer not has no legal relationship, about the
merely the obligation to exercise care in supernatural occurrences on her property,
his purchase but rather to be omniscient she may be said to owe no less a duty to
with respect to any fact which may affect her contract vendee. Application of the
the bargain. No practical purpose is remedy of rescission is entirely
served by imposing such a burden upon a appropriate to relieve the unwitting
purchaser. To the contrary, it encourages purchaser from the consequences of a
predatory business practice and offends most unnatural bargain. Judgment
the principle that equity will suffer no modified in favor of Stambovsky,
wrong to be without a remedy. reinstating his action seeking rescission
In the case at bar, Ackley deliberately of the contract.
fostered the public belief that her home

58
 ESTATE OF NELSON v. RICE
12 P.3d 238 (Ariz. Ct. App. 2000)

Martha Nelson died in 1996 and Kenneth Newman and Edward Franz were
appointed co-personal representatives of her estate. Newman and Franz hired Judith
McKenzie-Larson to appraise the estate’s personal property in preparation for an estate
sale. McKenzie-Larson told them that she did not appraise fine art, and that if she saw any,
they would need to hire an additional appraiser. McKenzie-Larson did not report finding
any fine art, and relying on her silence and her appraisal, Newman and Franz priced the
personal property and held an estate sale.
Carl Rice responded to the newspaper advertisement for the sale and attended it.
At the sale he bought two oil paintings, paying the asking price of $60 for the two paintings.
Rice had bought and sold some art, but he was not an educated purchaser, had never made
more than $55 on any single piece, and had bought many pieces that turned out to be
frauds, forgeries, or the work of lesser artists. Rice assumed that the paintings were not
originals, given their price and the fact that the estate was managed by professionals. At
home, he compared the signatures on the paintings to those in a book of artists’ signatures,
noticing that they appeared to be similar to that of Martin Johnson Heade. As they had
done in the past, Rice and his wife sent pictures of the paintings to Christie’s in New York,
hoping that they might be Heade’s work. Christie’s authenticated the paintings, “Magnolia
Blossoms on Blue Velvet” and “Cherokee Roses,” as paintings by Heade and offered to
sell them on consignment. Christie’s subsequently sold the paintings at auction for
$1,072,000. After subtracting the buyer’s premium and the commission, the Rices realized
$911,780 from the sale.
Newman and Franz learned about the sale in February 1997 and sued McKenzie-
Larson on behalf of the Estate, believing that she was responsible for the estate’s loss. The
following November, they settled the lawsuit because McKenzie-Larson had no assets. In
January 1998, the estate sued the Rices, alleging that the sale contract should be rescinded
or reformed because of mistake. The estate moved for summary judgment, arguing that
the parties were not aware that the transaction had involved fine art, believing instead that
the paintings were relatively valueless decorations. The Rices filed a cross-motion for
summary judgment arguing that the estate bore the risk of the mistake. The trial court
denied the estate’s motion for summary judgment and granted the Rices’ cross-motion.
The estate’s motion for a new trial was denied, and the estate appealed.

Espinosa, Chief Judge. A contract may not entitled to rescind the sale, the trial
be rescinded on the ground of mutual court found that, although a mistake had
mistake as to a basic assumption on existed as to the value of the paintings,
which both parties made the contract. the estate bore the risk of that mistake …
Furthermore, the parties’ mutual mistake . [A] party bears the risk of mistake when
must have had such a material effect on he is aware, at the time the contract is
the agreed exchange of performances as made, that he has only limited knowledge
to upset the very bases of the contract. with respect to the facts to which the
However, the mistake must not be one on mistake relates but treats his limited
which the party seeking relief bears the knowledge as sufficient. In explaining
risk … . In concluding that the estate was that provision, the Washington Supreme

59
Court stated, “In such a situation there is opinion of someone who was admittedly
no mistake. Instead, there is an awareness unqualified to appraise fine art to
of uncertainty or conscious ignorance of determine its existence, the personal
the future.” representatives consciously ignored the
The estate contends neither party bore possibility that the estate’s assets might
the risk of mistake. Through its personal include fine art, thus assuming that risk.
representatives, the estate hired two … Accordingly, the trial court correctly
appraisers, McKenzie-Larson and an found that the estate bore the risk of
Indian art expert, to evaluate the estate’s mistake as to the paintings’ value.
collection of Indian art and artifacts. Furthermore, the court may allocate
McKenzie-Larson specifically told the risk of mistake to one party “on the
Newman that she did not appraise fine ground that it is reasonable in the
art. In his deposition, Newman testified circumstances to do so.” In making this
that he had not been concerned that determination, “the court will consider
McKenzie-Larson had no expertise in the purposes of the parties and will have
fine art, believing the estate contained recourse to its own general knowledge of
nothing of “significant value” except the human behavior in bargain transactions.”
house and the Indian art collection. Here, the estate had had ample
Despite the knowledge that the estate opportunity to discover what it was
contained framed art other than the Indian selling and failed to do so; instead, it
art, and that McKenzie-Larson was not ignored the possibility that the paintings
qualified to appraise fine art, the personal were valuable and attempted to take
representatives relied on her to notify action only after learning of their worth
them of any fine art or whether a fine arts as a result of the efforts of the Rices.
appraiser was needed. Because Under these circumstances, the estate was
McKenzie-Larson did not say they a victim of its own folly and it was
needed an additional appraiser, Newman reasonable for the court to allocate to it
and Franz did not hire anyone qualified to the burden of its mistake. Judgment
appraise fine art. By relying on the affirmed.

60
 SCHAADT v. ST. JUDE MEDICAL S.C., INC.
2007 U.S. Dist. LEXIS 59586 (D. Minn. 2007)

St. Jude Medical is a large medical device manufacturer. In July 2001, Jennifer
Schaadt began working as a product manager in St. Jude’s Cardia Rhythm Division.
Eventually, she became dissatisfied and applied for and obtained a position within St.
Jude’s U.S. Sales Division (USD). Schaadt began working in USD as a field marketing
manager in May 2004. Shortly after she started her new position, USD asked her and all
of the other field marketing managers to sign a written contract containing a
nonsolicitation and confidentiality agreement. In return, she and the other managers, who
would otherwise be employees at will, were given one-year terms of employment. The
contract required St. Jude to employ Schaadt for a minimum of one year, and it prohibited
her from soliciting St. Jude’s employees for one year after termination of her employment
with St. Jude.
USD gave the agreement to Schaadt, but there was no evidence that she ever signed
or returned it to St. Jude. Schaadt had conflicts with her supervisor in USD and soon
began looking for another job. She told recruiters that she did not like her current position
and wanted to pursue another opportunity. Before Schaadt could quit, however, she was
fired. Schaadt sued St. Jude for breach of contract and St. Jude moved for summary
judgment on the ground that her claim was barred by the statute of frauds.

Schlitz, Judge. A contract falls within the statute of frauds, the question is not
the statute of frauds unless the contract, whether something might arise within
by its terms, is capable of being fully one year that would excuse performance,
performed within one year. Schaadt but whether the parties can fully perform
argues that the statute of frauds is their obligations under the contract within
inapplicable because her contract with St. one year if those obligations are not
Jude was capable of being fully excused.
performed within one year. According to The St. Jude-Schaadt contract
Schaadt, she could have quit her job 30 contains two commitments: a
seconds after she agreed to the contract. commitment by St. Jude to employ
That would have triggered the running of Schaadt for at least one year, and a
the one-year non-solicitation commitment by Schaadt not to solicit St.
commitment, and she could have fulfilled Jude’s employees for one year after
that commitment within one year of the leaving the employ of St. Jude. The
date that she entered the contract. parties could not fully perform all of their
Schaadt’s argument is unavailing. The duties under the contract within one year.
test under the statute of frauds is whether True, if Schaadt quit her job 30 seconds
the parties to a contract – all parties – can (or 30 days) after entering the contract,
perform their obligations within one year. St. Jude would be excused from
In any contract, something might arise performing its obligation to employ
within one year that excuses Schaadt for a year. But St. Jude would
performance. That obviously cannot be not have performed its obligation. St.
enough to defeat application of the statute Jude needed one full year to perform its
of frauds, or no contract would ever be obligation under the employment
covered by the statute. For purposes of provision, and Schaadt, of course, needed

61
an additional year to perform her day after agreeing to the contract.
obligation under the non-solicitation Minnesota courts have consistently
provision. rejected such arguments.
If the law were as Schaadt would have In sum, the St. Jude-Schaadt
it, then no employment contract would “agreement [was] ... by its terms ... not to
ever fall within the statute of frauds be performed within one year from the
because an employee can always quit (or making thereof.” St. Jude, the party
become disabled or die) a few seconds charged with breach, did not sign the
after entering the contract. For example, contract, and therefore, under the
an employee could allege that an Minnesota statute of frauds, the contract
employment contract for a term of five is unenforceable at St. Jude’s option.
years was not within the statute of frauds Summary judgment granted in favor
because the employee could have quit the of St. Jude.

62
 HINKEL v. SATARIA DISTRIBUTION & PACKAGING, INC.
920 N.E.2d 766 (Ind. Ct. App. 2010)

Hinkel was employed by Refractory Engineers, Inc. and Ceramic Technology, Inc.
John Jacobs was the owner of Sataria. In late August or September 2005, Hinkel and
Jacobs met to discuss working together. Jacobs offered Hinkel a job at Sataria. Hinkel
had reservations. Jacobs told him, “Mark, are you worried that I’ll f--- you? If so, and
things don’t work, I’ll pay you one (1) year’s salary and cover your insurance for the one
(1) year as well. But let me make it clear, should you decide this is not for you, and you
terminate your own employment, then the agreement is off.” Jacobs later sent Hinkel the
following written job offer:
Dear Mark,
1. This is written as an offer of employment. The terms are as described below:
2. Annual compensation: $120,000
3. Work Location: Belmont Facility
4. Initial Position: Supervisor Receiving Team
5. Start Date: 08/19/2005
6. Paid Vacation: To be determined.
7. Health Insurance: Coverage begins 09/01/2005 pending proper enrollment
submission
Please sign and return.
Hinkel signed the offer and resigned from his other employers. He began working
at Sataria in September 2005. According to Hinkel, Jacobs orally reiterated the severance
promise again in November 2005 and December 2005. Sataria terminated Hinkel’s
employment involuntarily on January 23, 2006. Sataria paid Hinkel six weeks of severance
thereafter. Hinkel brought this action for breach of contract and/or promissory estoppel
against Sataria. He claimed that Sataria owed him the severance package that Jacobs
promised. Sataria moved for summary judgment. The trial court granted Sataria’s
motion, and Hinkel appealed.

Vaidik, Judge. According to Hinkel, The first step when applying the parol
Jacobs orally promised him a year’s evidence rule is determining whether the
salary and insurance coverage if he were parties’ written contract represents a
ever involuntarily terminated. Sataria complete or partial integration of their
argues that any alleged oral promises are agreement. If the contract is completely
barred from consideration by the parol integrated, constituting a final and
evidence rule. The parol evidence rule complete expression of all the parties’
provides that “[w]hen two parties have agreements, then evidence of prior or
made a contract and have expressed it in contemporaneous written or oral
a writing to which they have both statements and negotiations cannot
assented as the complete and accurate operate to either add to or contradict the
integration of that contract, evidence of written contract. “In determining
antecedent understandings and whether an agreement is integrated, a
negotiations will not be admitted for the court must compare both the alleged oral
purpose of varying or contradicting the and written agreements and must
writing.” determine whether the parties, situated as

63
were the ones to the contract, would relevant evidence, we find as a matter of
naturally and normally include the one in law that Hinkel’s contract represented a
the other if it were made. If the alleged complete integration of the parties’
oral and written agreements relate to the employment agreement. Jacobs
same subject matter and are so allegedly promised Hinkel a severance
interrelated that both would be executed package, but the written contract
at the same time and in the same contract, enumerates both compensation and
the scope of the subsidiary agreement insurance coverage while saying nothing
must be taken to be covered by the of post-employment salary and/or
writing. In such case, parol evidence to benefits. The offer leaves one term to be
vary, modify or supersede the written decided – paid vacation – but the contract
contract is inadmissible in evidence.” imports on its face to be a complete
Here, Jacobs and Hinkel negotiated expression with respect to salary and
the terms of Hinkel’s employment before insurance. And since a lucrative
completing their written contract. severance provision would “naturally and
Jacobs allegedly promised Hinkel that he normally” be included in an employment
would receive one year of salary and contract, its glaring omission here further
benefits if he were ever terminated supports the conclusion that Hinkel’s
involuntarily. The parties then executed written contract superseded any alleged
their written agreement. The written prior oral promises. We hold that the
employment offer specified Hinkel’s written contract constituted a final
compensation, work location, title, start representation of the parties’ agreement,
date, and the date on which his insurance and any contemporaneous oral
coverage would begin. It did not provide agreements that the parties made as to
that Hinkel would receive severance pay severance are not subject to
or benefits following termination. interpretation. Affirmed in favor of
Hinkel signed the letter and began Sataria.
working at Sataria. In light of all the

64
 BUSH v. PRO TRAVEL INTERNATIONAL, INC.
746 N.Y.2d 790 (N.Y. Civ. Ct. 2002)

In May 2001, Alexandra Bush purchased an African safari package for herself and
her fiancé from ProTravel International. She paid a 20 percent deposit in the amount of
$1,516. The contract stated that in case of cancellation more than 60 days in advance of
the tour, there would be a $50 per person penalty, and in case of cancellation 30-60 days
in advance, the penalty would be 20 percent of the total retail tour rate. Sixty-four days
before the tour was to begin on November 14, 2001, the September 11th terror attacks on
New York City occurred. As a result of the air travel alerts and concerns about terrorism
surrounding that time, Bush and her fiancé decided to cancel their trip.
They attempted to cancel on September 12th, but phones in Manhattan were down
and offices were closed, so Bush did not manage to convey her cancellation to ProTravel
until September 27th, which was within the 30-60 day period. However, ProTravel did not
manage to convey the cancellation to Micato Safaris, the tour operator, until October 4th,
also within the 30-60 days/20 percent penalty period. Because of this, the tour operator
and travel agency kept the deposit. Bush sued, claiming that impossibility because of
frustration of the means of performance prevented her from canceling within the more-
than-60-day period. ProTravel filed a motion for summary judgment.

Vitaliano, Judge. [T]he issue … here is performance” have been nullified,

whether the attack on the World Trade making “performance objectively
Center and the civil upset of its aftermath impossible,” a party’s performance under
in the days that immediately followed a contract will be excused.
excuses Alexandra Bush’s admittedly Counsel for the defendants at oral
late notice of cancellation. More to the argument claimed to understand the
point, given that effective cancellation on difficulties encountered by literally every
or before September 14, 2001 would have New Yorker in the wake of the disaster at
absolved the plaintiff of the 20% the World Trade Center, but argue that
cancellation penalty, does Ms. Bush’s those difficulties do not constitute a valid
sworn statement that she attempted to excuse for the failure of the plaintiff to
phone her cancellation notice to cancel the safari before September 15,
ProTravel beginning on September 12, 2001. The delay until September 27,
2001 but did not get through until 2001, they contend, is inexcusable.
September 27, 2001 raise a triable issue Putting aside the sheer insensitivity of
of fact, which, if resolved in her favor, their argument, the argument fails to
entitles her to relief from the cancellation come to grips with Alexandra Bush’s
penalty provision of the contract? ... sworn claim that the disaster in lower
Though it is true that the black letter Manhattan, which was unforeseen,
of the law establishes the rule that “once unforeseeable and, certainly, beyond her
a party to a contract has made a promise, control, had effectively destroyed her
that party must perform or respond in ability and means to communicate a
damages for its failure, even when timely cancellation under the contract for
unforeseen circumstances make safari travel she had booked through and
performance burdensome”, the rule is not with the defendants. To the point,
an absolute. Where the “means of Alexandra Bush claims she could not

65
physically take the steps necessary to cancellation and Micato acknowledges it
cancel on time. Micato and ProTravel, to received it. …
the contrary, claim she was simply a It is not hyperbole to suggest that on
traveler too skittish to travel after September 11, 2001, and the days that
September 11th, who wanted to stick the immediately followed, the City of New
travel professionals she had retained with York was on a wartime footing, dealing
the bill for her faint heart. Should the with wartime conditions. The continental
defendants establish that to be the case to United States had seen nothing like it
the satisfaction of the jury or at a bench since the Civil War and, inflicted by a
trial, they will be entitled to judgment. foreign foe, not since the War of 1812. …
They certainly have not established that Stated succinctly, where a supervening
as a matter of law now. act creates a temporary impossibility,
Furthermore, [Ms. Bush’s] claim of particularly of brief duration, the
excuse because of the frustration of the impossibility may be viewed as merely
means of performance is supported, excusing performance until it
underscored and punctuated by the subsequently becomes possible to
official actions taken by civil authorities perform rather than excusing
on September 11, 2001 and in the days performance altogether.
that followed. On the day of the attack, a The law of temporary and/or partial
state of emergency had been declared by impossibility flows from the theory that
the Mayor of the City of New York[.] when a promisor has obligated himself to
Simultaneously, the Governor of the perform certain acts, which, when taken
State of New York declared a state together are impossible, the promisor
disaster emergency[.] should not be excused from being “called
Particularly on the days at the focal upon to perform in so far as he is able to
point of the argument here, September do so.” ... [I]f Alexandra Bush can
12, 13, and 14, 2001, New York City was establish objective impossibility of
in the state of virtual lockdown with performance at trial, she is entitled to, at
travel either forbidden altogether or minimum, a reasonable suspension of her
severely restricted. Precedent is plentiful contractual obligation to timely cancel, if
that contract performance is excused not outright excuse of her untimely
when unforeseeable government action cancellation. ... Moreover, the failure of
makes such performance objectively the defendants to establish that they
impossible. Further, in the painful sustained any loss whatsoever on account
recognition of the obvious and of the plaintiff’s failure to act in the 13-
extraordinary dimensions of the disaster day intervening period between
that prevented the transaction of even the September 14 and September 27, 2001
most time sensitive business during the further supports the reasonableness of the
days and weeks that followed the plaintiff’s late cancellation as well as the
September 11th atrocities, the Governor court’s determination that triable issues
even issued an Executive Order of fact are present. Motion for summary
extending the statute of limitations for all judgment denied.
civil actions in every court of our state for
a period well beyond the times Alexandra
Bush claims to have communicated her

66
 UNIFORM COMMERCIAL CODE

§ 2-207 - Additional Terms in Acceptance or Confirmation

(1) A definite and seasonable expression of acceptance or a written confirmation which

is sent within a reasonable time operates as an acceptance even though it states terms
additional to or different from those offered or agreed upon, unless acceptance is
expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract.
Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a
reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to
establish a contract for sale although the writings of the parties do not otherwise establish
a contract. In such case the terms of the particular contract consist of those terms on
which the writings of the parties agree, together with any supplementary terms
incorporated under any other provisions of this Act.

67
 ACCEPTANCE BY “BATTLE OF THE FORMS” UNDER UCC § 2-207

Is offeree’s reply a definite NO

and seasonable expression
of acceptance?

YES

Acceptance - contract NO Does the acceptance

formed on the offeror’s contain additional or
terms. different terms?

YES

Is the acceptance YES

conditional on the offeror’s
agreement to the No contract formed.*
additional or different
terms?

NO
Acceptance - contract
formed on the offeror’s
terms and the offeree’s NO
Are both parties
additional or different merchants?
terms are considered
as proposals for
YES
addition to the contract.

Did the offer expressly

limit acceptance to its Acceptance - the
terms, or do the terms YES
offeree’s additional or
materially alter the offer, different terms are
or did the offeror timely not included unless
object to the additional or the offeror agrees.
different terms?

NO

Acceptance - the offeree’s

additional or different
terms become part of the
contract.

* Under UCC § 2-207(3), a contract may still result due to the parties’ conduct or performance and, if
so, the contract will include those terms on which the parties agree, plus the UCC gap-filling terms.

68
 ACCEPTANCES CONTAINING ADDITIONAL OR DIFFERENT TERMS
TRANSACTION RESULT
X offers to clean Y’s house once per week for
$25 an hour, with the cost of cleaning supplies
paid by Y. Y responds: “I accept your offer, but
you will have to pay for all cleaning supplies.”
A submits an offer to purchase a house owned
by B for $150,000 with all household appliances
included. B replies: “I agree to your offer.
Appliances are not included.”
J offers to purchase 10 digital scanners from K
for a $200 each. K replies: “We are interested in
your offer and will let you know by the end of the
week.”
G offers to sell a speed boat to H for $60,000,
one-half of the price payable in advance and the
remainder due on delivery.” H replies: “I accept
your offer, full payment on delivery after
inspection. These terms are non-negotiable.”
C orders a home alarm system from D, a
merchant. D replies with a confirmation
accepting the order but disclaiming all
warranties. C is not a merchant.
M, a merchant, sends a purchase order to N, a
merchant, for 100 filing cabinets, $30 each, for
delivery by July 1st. N replies with an
acknowledgment agreeing to sell 100 filing
cabinets, $30 each, for delivery on July 15th.
E, a merchant, sends a purchase order for 500
air conditioners for $1000 each. The purchase
order states: “Your acceptance is limited to the
terms of this purchase order.” F, a merchant,
replies with a confirmation accepting the offer
and containing a forum selection clause, which
was not included in the purchase order.
V, a merchant, sends an offer to sell 1,000
lighting fixtures for $10 each to W, a merchant.
W sends a reply, which agrees to the terms of
the offer but also includes an arbitration clause.
V receives W’s reply and immediately informs W
that it will not agree to arbitration.
R, a merchant, sends a purchase order for 10
tons of cement for $50 per ton to S, a merchant.
S replies with a confirmation accepting the order
for 10 tons of cement at a price of $100 per ton.

69
 UCC § 2-207 ACCEPTANCE REVIEW PROBLEM

Buyer sends a purchase order to Seller for 100 halogen light bulbs at $10 per unit for
delivery by July 1st. Seller receives the purchase order and sends a confirmation of the order to
Buyer containing the same terms as to quantity, price, and delivery date. The confirmation also
contains an additional term stating: “Buyer shall pay the cost of insuring the goods during
shipment.” Seller and Buyer are both merchants. Based on these facts, answer the following
questions:

1. Has a contract been formed between Seller and Buyer? If so, is the insurance term part of the
contract?

2. Assume instead that Seller’s confirmation states: “This acceptance is expressly conditioned on
your agreement to the terms contained in this confirmation.” Has a contract been formed
between Seller and Buyer? If so, is the insurance term part of the contract?

3. Assume instead that Buyer’s purchase order states: “Any agreement is limited solely to the
terms listed on this purchase order.” Has a contract been formed between Seller and Buyer?
If so, is the insurance term part of the contract?

4. Assume instead that after receiving Seller’s confirmation, Buyer notifies Seller that the
insurance term is not acceptable. Has a contract been formed between Seller and Buyer? If
so, is the insurance term part of the contract?

5. Assume instead that the cost of insurance is $8 per unit (adding $800 to the price). Under the
UCC, the seller bears the risk of loss to the goods until delivery unless the parties agree
otherwise. Has a contract been formed between Seller and Buyer? If so, is the insurance term
part of the contract?

6. Assume instead that Seller’s confirmation states: “Acceptance of your order is expressly
conditioned on your assent to the terms of this confirmation form.” Seller ships the goods and
buyer accepts delivery. Upon inspection, Buyer discovers that several of the bulbs are
damaged. Has a contract been formed between Seller and Buyer? If so, is the insurance term
part of the contract?

7. Assume instead that Seller is a merchant but Buyer is a consumer (nonmerchant). Has a
contract been formed between Seller and Buyer? If so, is the insurance term part of the
contract?

70
 CONTRACT CLAUSES

Merger or Integration Clauses

Entire Agreement: This agreement constitutes the entire understanding between the
parties with respect to the subject matter of this agreement, superseding all negotiations,
prior discussions, and preliminary agreements, written or oral.

Integration Clause: This Agreement may not be amended, modified, or altered except by
a writing signed by both parties. All prior discussions, agreements, understandings, or
arrangements, whether oral or written, are merged herein and this document represents
the entire agreement between the parties.

MERGER: This agreement contains the entire understanding of the parties, and there are
no representations, warranties, covenants, or undertakings other than those expressed
and set forth herein.

Force Majeure Clauses

Force Majeure. Seller’s failure to perform any term or condition of this Agreement as a
result of conditions beyond its control such as, but not limited to, war, strikes, fires, floods,
acts of God, government restrictions, power failures, or damage or destruction of any
network facilities or servers, shall not be deemed a breach of this Agreement.

No party shall be liable for any failure to perform its obligations where such failure is as a
result of acts of nature (including fire, flood, earthquake, storm, hurricane, or other natural
disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or
not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation,
terrorist activities, nationalization, government sanction, blockage, embargo, labor
dispute, strike, lockout, or interruption or failure of electricity or telephone service, and no
party will have a right to terminate this Agreement in such circumstances.

Force Majeure: No party shall be liable for failure to perform its obligations in connection
with any action described in this Agreement, if such failure results from any act of God,
riot, war, civil unrest, flood, earthquake, or other cause beyond such party’s reasonable
control (including any mechanical, electronic, or communications failure, but excluding
failure caused by a party’s financial condition or negligence).

71
 REMEDIES FOR BREACH OF CONTRACT

REMEDY DEFINITION

Compensatory
damages

Consequential
damages

Incidental
damages

Nominal
damages

Liquidated
damages

Specific
performance

Restitution

Rescission

72
 REMEDIES FOR BREACH OF CONTRACT REVIEW PROBLEM

Bluestar Appliances is a manufacturer and seller of household appliances. Standard

Manufacturing agreed to sell a certain quantity of air compressors to Bluestar at the price of
$200,000 for use in refrigerators. Soon after payment and delivery, Bluestar discovered that the
compressors did not conform to the contract specifications, making them unusable. As a result,
Bluestar had to temporary halt production while it attempted to repair the compressors at a cost of
$1,000. Although Bluestar’s factory assembly line was shut down, its contract with the labor
union required Bluestar to continue paying its assembly line employees during this period at a cost
of $20,000.
After its attempt to repair the compressors failed, Bluestar cancelled the contract with
Standard. It had to purchase substitute air compressors from another supplier for $250,000,
spending $100 in the process of locating the substitute compressors. Bluestar spent $200 in
shipping costs to return the unusable compressors to Standard. In addition, Bluestar was unable
to fill several orders for its refrigerators, resulting in lost profits of $2,000,000. Bluestar has sued
Standard for breach of contract.

Is Bluestar entitled to
rescission of the contract and
restitution? If so, in what
amount?

What is the amount of

compensatory damages that
Bluestar can recover?

What is the amount of

consequential damages that
Bluestar can recover?

What is the amount of

incidental damages that
Bluestar can recover?

73
 CONTRACTS DISCUSSION PROBLEMS

1. Charles and Bridget Joswicks bought a mobile home manufactured by Brigadier Homes of
North Carolina, Inc., from Chesapeake Mobile Homes, Inc., in March 1988. In February 1995,
they noticed for the first time that the roof was leaking due to the fact that the shingles at the eaves
had been improperly installed and did not permit sufficient overhang to allow rain water to drip
off the roof. That condition caused water to back up and rot facia boards and plywood, the repair
of which would cost $4,275. The leak also damaged the interior of the mobile home. The defect
was present when Chesapeake delivered the mobile home to the Joswicks in 1988, which was a
breach of the warranty that the Joswicks had received from Brigadier. The Joswicks sued
Chesapeake and Brigadier for breach of warranty. Does the UCC apply to this contract? See
Joswick v. Chesapeake Mobile Homes, Inc., 765 A.2d 90 (Md. Ct. App. 2001).

2. Maria Cantu was hired as a special education teacher by the San Benito Consolidated
Independent School District under a one-year contract for the 1990-91 school year. On Saturday,
August 18, 1990, shortly before the start of the school year, Cantu hand-delivered to her supervisor
a letter of resignation, effective August 17, 1990. In this letter, Cantu requested that her final
paycheck be forwarded to an address in McAllen, Texas, some fifty miles from the San Benito
office where she tendered the resignation. The San Benito superintendent of schools, the only
official authorized to accept resignations on behalf of the school district, received Cantu’s
resignation on Monday, August 20. The superintendent wrote a letter accepting Cantu’s
resignation the same day and deposited the letter, properly stamped and addressed, in the mail at
approximately 5:15 P.M. that afternoon. At about 8:00 A.M. the next morning, August 21, Cantu
hand-delivered to the superintendent’s office a letter withdrawing her resignation. This letter
contained a San Benito return address. In response, the superintendent hand-delivered that same
day a copy of his letter mailed the previous day to inform Cantu that her resignation had been
accepted and could not be withdrawn. Did the school district accept Cantu’s resignation,
rescinding her employment contract, before Cantu attempted to withdraw her offer of resignation?
See Cantu v. Central Education Agency, 884 S.W. 2d 565 (Tex. Ct. App. 1994).

3. In 1989, the New Jersey Highway Authority increased its tolls from 25 cents to 35 cents.
Along with this increase, it authorized the sale of tokens for a discounted price for a limited time
– $10 for a roll of 40 tokens, a savings of $4 per roll for customers. The Authority advertised the
sale through various media, including signs on the parkway itself. Shortly after the sale began,
complaints were made that tokens were not available. The Authority explained that the shortage
probably resulted from unanticipated demand for the tokens and from purchasers hoarding them.
The Authority then began limiting sales to certain days of the week, but even then demand for the
tokens could not be satisfied. Paul Schlichtman, a motorist who regularly used the toll roads, sued
the Authority for breach of contract after trying unsuccessfully on five different occasions within
authorized sales dates and times, to buy the discounted tokens. Will he succeed? See Schlictman
v. N.J. Highway Authority, 579 A.2d 1275 (N.J. Super. Ct. 1990).

4. In July 2006, Edgar Hernandez was employed by Nestlé as an industrial engineer.

Hernandez learned of a job opening at UPS Supply Chain Solutions, Inc., and applied for it. He
interviewed with UPS representatives and received a written job offer from UPS for a management
trainee position in the El Paso, Texas, Industrial Engineering Department. He was assured by UPS

74
supervisors that the job was his, so he accepted the UPS offer and quit his job with Nestlé.
Hernandez terminated the lease on his apartment, discarded his furniture, and incurred moving and
traveling expenses by relocating his family to El Paso. When he arrived at UPS, he was informed
that his starting date would be delayed, but was assured once again that he would be employed by
UPS. Hernandez worked at UPS for three days, from September 5 through September 7, 2006.
Hernandez’s work duties consisted of attending UPS orientation for approximately two days and
working at home one day. After the second day of orientation, a UPS supervisor told Hernandez
that he should go home because he was not an official employee. The next week, a UPS human
resources representative informed Hernandez that UPS would not honor the job offer. In addition,
Hernandez was not paid for the hours worked from September 5 to September 7, 2006. Hernandez
sued UPS on the ground of promissory estoppel to recover his out-of-pocket expenses. Will he
succeed? See Hernandez v. UPS Supply Chain Solutions, Inc., 2007 U.S. Dist. LEXIS 52699
(W.D. Tex. 2007).

5. Hoo Song Chow arranged through a travel agent to fly from Indianapolis to Singapore on
June 27, 1 986. Singapore Airlines gave him a round-trip ticket that included a TWA flight to Los
Angeles. Shortly before the trip, Chow’s flight was rerouted so that he had to fly to St. Louis first
and then to San Francisco. During the St. Louis stopover, the flight developed engine trouble,
causing a substantial delay. TWA personnel assured Chow that if he missed his connecting flight,
TWA would arrange for him to take the next Singapore flight out of San Francisco. After the
engine problem was fixed, TWA delayed the flight’s departure an additional two hours to board
additional passengers. Chow was again assured that if he missed his scheduled flight, TWA would
make arrangements for him. Chow missed his Singapore flight by minutes, and was housed
overnight at TWA’s expense in San Francisco after once more being assured that TWA would
make arrangements to get him on the next Singapore flight. When he called Singapore Airlines
the next morning to see whether TWA had made him a reservation, Chow was told that no
arrangements had been made. When he contacted TWA, he was told TWA would make the
arrangements immediately. After waiting several hours, Chow learned TWA had still not made
the arrangements and was told that TWA could no longer help him. Because Singapore Airlines
no longer had economy class seats available, Chow had to buy a business class seat at an additional
cost of $928. When he filed suit against TWA for that amount, TWA argued that the Conditions
of Contract printed on Chow’s ticket disclaimed any liability for failure to make connections. Did
Chow have a valid claim against TWA? See Hoo Song Chow v. Transworld Airlines, 544 N.E.2d
548 (Ind. Ct. App. 1989).

6. Ronald Houston repeatedly promised his daughter, Allyson, that he would pay one-half of
the costs of Allyson attending a private, historically African-American college or university.
Relying on this promise, Allyson applied to and was accepted into Clark Atlanta University.
Houston reiterated this promise after Allyson’s acceptance and specifically agreed to pay one-half
of the costs of her tuition, room, board, books, and other expenses at Clark (less certain scholarship,
work study, and grant monies). Allyson relied on this reiterated promise and, forgoing
opportunities to apply to and enroll in other colleges or universities of significantly less cost,
enrolled in Clark. Houston nevertheless refused to honor his commitment. Allyson sued her father
to enforce his promise on the basis of promissory estoppel. What result? See Houston v. Houston,
600 S.E.2d 395 (Ga. Ct. App. 2004).

75
7. Star Coach is in the business of converting sport utility vehicles and pickup trucks into
custom vehicles. It performs the labor involved in installing parts supplied by other companies
onto vehicles owned by dealers. Heart of Texas Dodge purchased a new Dodge Durango from
Chrysler Motors and entered into a contract with Star Coach for Star Coach to convert the Durango
to a Shelby SP 360 custom performance vehicle and then return the converted vehicle to Heart of
Texas Dodge. The manufacturer delivered the dealer’s Durango to Star Coach and over a period
of several months, Star Coach converted the vehicle using another company’s parts. Several
months later, Star Coach delivered the vehicle to Heart of Texas Dodge, which paid Star Coach
the contract price of $15,768 without inspecting the vehicle. When Heart of Texas Dodge
inspected the vehicle several days later, it found the workmanship faulty. Heart of Texas Dodge
stopped payment on its check and Star Coach filed suit. An important issue in the case was whether
the remedies of the UCC apply. Does the UCC apply to this case? See Heart of Texas Dodge,
Inc. v. Star Coach, 567 S.E.2d 61 (Ga. Ct. App. 2002).

8. Stephen Gall and his family became ill after drinking contaminated water supplied to their
home by the McKeesport Municipal Water Authority. They filed suit against the utility, arguing,
among other things, that the utility had breached the UCC implied warranty of merchantability
when it sold them contaminated water. The utility moved to dismiss their complaint, arguing that
the UCC did not apply since the sale of water was not a “good.” Should the Galls’ complaint be
dismissed? See Gall v. Allegheny Health Dept., 555 A.2d 786 (Pa. Sup. Ct. 1989).

9. Edward Sherman engaged V.R. Brokers as his listing agent for the sale of his business.
On December 5, 1985, William Lyon made a written offer to purchase the business for $75,000
and attached certain conditions to the offer. Later the same day, Sherman signed and delivered a
written counteroffer offering to sell the business for $80,000 and rejecting two of the conditions
contained in Lyon’s offer. On December 7, 1985, Lyon signed the counteroffer before a notary
public and then brought it to the office of V.R. Brokers around 12:00 noon on that day. Before
Lyon could hand the signed counteroffer to Robert Renault, the principal at V.R. Brokers, Renault
told Lyon that Sherman had withdrawn his counteroffer. Did Sherman have the right to revoke
his counteroffer? See Lyon v. Adgraphics, 540 A.2d 398 (Conn. Ct. App. 1988).

10. Frank Rodziewicz was driving a 1999 Volvo conventional tractor-trailer on I-90 in Lake
County, Indiana, when he struck a concrete barrier. His truck was stuck on top of the barrier, and
the state police contacted Waffco Heavy Duty Towing to help in the recovery. Before Waffco
began working, Rodziewicz asked how much it would cost to tow the truck. He was told that the
fee would be $275, and there was no discussion of labor or other costs. Rodziewicz instructed
Waffco to take his truck to a Volvo dealership. After a few minutes of work, Waffco pulled
Rodziewicz’s truck off the barrier and towed the truck to its towing yard a few miles away.
Subsequently, Waffco notified Rodziewicz that, in addition to the $275 towing fee, he would have
to pay $4,070 in labor costs. Waffco calculated its labor charges as 11 cents per pound. Waffco
would not release the truck until payment was made, so Rodziewicz paid the total amount. Was
Rodziewicz contractually obligated to pay Waffco the $4,070 labor fee? See Rodziewicz v. Waffco
Heavy Duty Towing, 763 N.E.2d 491 (Ind. Ct. App. 2002).

11. Irwin Schiff, a self-styled tax rebel who had made a career out of his tax protest activities,
appeared live on the February 7, 1983, CBS News Nightwatch program. During the course of the

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program, which had a viewer participant format, Schiff repeated his longstanding position that
“there is nothing in the Internal Revenue Code which says anyone is legally required to pay the
tax.” Later in the program, Schiff stated: “If anybody calls this show and cites any section of this
Code that says an individual is required to file a tax return, I will pay them $100,000.” John
Newman, an attorney, did not see Schiff live on Nightwatch, but saw a two-minute taped segment
of the original Nightwatch interview several hours later on the CBS Morning News. Certain that
Schiff’s statements were incorrect, Newman telephoned and wrote CBS Morning News, attempting
to accept Schiff’s offer by citing Internal Revenue Code provisions requiring individuals to pay
federal income tax. CBS forwarded Newman’s letter to Schiff, who refused to pay on the ground
that Newman had not properly accepted his offer. Newman sued Schiff for breach of contract.
Will Newman win? See Newman v. Schiff, 778 F.2d 460 (3d Cir. 1985).

12. Inez Richardson hired J.C. Flood Company, a plumbing contractor, to correct a stoppage
in the sewer line of her house. The plumbing company’s ‘‘snake’’ device, used to clear the line
leading to the main sewer, became caught in the underground line. In order to release it, the
company excavated a portion of the sewer line in Richardson’s backyard. In the process, the
company discovered numerous leaks in a rusty, defective water pipe that ran parallel with the
sewer line. To comply with public regulations, the water pipe, of a type no longer approved for
such service, had to be replaced either then or later, when the yard would have to be redug for such
purpose. J.C. Flood proceeded to repair the water pipe. Although Richardson inspected the
company’s work daily, and did not object to the extra work involved in replacing the water pipe,
she refused to pay that part of the total bill after the company completed the entire operation. J.C.
Flood then sued Richardson for the costs of the labor and material it had furnished on the basis of
implied contract. Richardson argued that she only requested repair of a sewer obstruction and had
never expressly agreed to the replacement of the water pipe. Is Richardson correct? See
Richardson v. J.C. Flood Co., 190 A.2d 259 (D.C. Ct. App. 1963).

13. On May 17, 1987, Amos Cobagh was playing in the East End Open Golf Tournament when
he arrived at the ninth tee and found a new Chevrolet Beretta, together with a sign that read:
“HOLE-IN-ONE Wins this 1988 Chevrolet Beretta GT Courtesy of KLICK-LEWIS Buick Chevy
Pontiac $49,000 OVER FACTOR INVOICE.” Cobaugh aced the ninth hole and attempted to
claim his prize, but Klick-Lewis refused to deliver the car to him. Klick-Lewis had offered the car
as a prize for another charity golf tournament two days earlier and had neglected to remove the car
and the posted sign prior to Cobaugh’s hole-in-one. When Cobaugh sued to compel Klick-Lewis
to deliver the car to him, Klick-Lewis argued that no contract was created because there was no
offer and no intent to make an offer to Cobaugh. What result? See Cobaugh v. Klick-Lewis, Inc.,
561 A.2d 1248 (Pa. Super. Ct. 1989).

14. Jeff visited a car dealership and test-drove a used car. After discussing the price with the
salesman, Jake, and learning that he could purchase the car for $500 less than the sticker price, Jeff
asked Jake to hold the car for him until 8:00 that evening so that he could bring his wife back to
see the car. Jake agreed, writing out a note promising not to sell the car before 8:00 PM. The note
was written on dealership stationery, but Jake did not sign his name. The dealership broke its
promise and sold the car to Jones before 8:00 PM. Was the dealership free to revoke its offer to
Jeff? Jones, the new purchaser of the car (and a nonmerchant), later offered in a signed writing to

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sell the car to Jeff and to hold the car for him until he returned with his wife. Could Jones revoke
this offer?

15. In December 1999, Jennifer Wilson applied for a Citibank credit card and signed an
acceptance certificate in which she agreed to be bound by the terms and conditions of the credit
card agreement. Citibank then issued a credit card to her, which Wilson began using. In July 2001,
Citibank mailed Wilson her credit card statement, which informed her that it was modifying the
terms of the original agreement. This revised agreement was enclosed with the credit card
statement. After the July 2001 statement was made to her, Wilson continued using her credit card
and made monthly payments on her account balance. Wilson made her last payment to Citibank
in March 2002 and failed to make payments thereafter. Citibank then filed suit against her to
collect her overdue balance, which was $12,272.84. In this action, Citibank attempted to enforce
the revised agreement rather than the original agreement. Wilson argued that she never accepted
the revised agreement. Is this a good argument? See Citibank v. Wilson, 160 S.W.3d 810 (Mo.
Ct. App. 2005).

16. Equilon Enterprises, LLC, which operates Shell brand service stations, ran an
advertisement during its “Ski Free” promotion that read: “BUY 10 GALLONS OF FUEL, GET A
VOUCHER FOR A FREE LIFT TICKET!” Under this promotion, after an individual purchased
10 gallons of fuel and requested a voucher for a free lift ticket, he or she would receive a voucher
with their purchase receipt. In fact, this voucher could not be exchanged directly for a free lift
ticket, but rather was a “2 for 1” coupon that allowed the individual to obtain a free lift ticket only
after purchasing a lift ticket at full price at a participating ski resort. The voucher contained various
other restrictions. After buying 10 gallons of fuel at a participating Shell station, John Kearney
sued Equilon for breach of contract when Equilon failed to provide a voucher that could be directly
exchanged for a free lift ticket. Equilon argued that its advertisement was not an offer. Did
Equilon make an offer? See Kearney v. Equilon Enterprises, LLC, 2014 WL 6769697 (D. Ore.
2014).

17. Zappos is an online retailer of apparel, shoes, handbags, home furnishing, beauty products,
and accessories. Customers who shop on the Zappos.com website must agree to certain Terms of
Use, which required customers to arbitrate any disputes in Las Vegas based on their use of the
website. The first paragraph of the Terms of Use also provided: “We reserve the right to change
this Site and these terms and conditions at any time.” A link to the Terms of Use appeared in the
middle to bottom of every <zappos.com> webpage among many other links. In mid-January 2012,
computer hackers attacked <zappos.com> and attempted to download files containing customer
personal account information. Zappos notified its customers that their personal accounts had been
compromised by hackers. When the customers sued Zappos for damages due to the security
breach, Zappos sought to enforce the arbitration agreement. The plaintiffs argued that the
agreement was unenforceable because it lacked consideration. Is the arbitration agreement
enforceable? See In re Zappos.com, Inc. Customer Data Security Breach Litigation, 867 F.
Supp.2d 1357 (D. Nev. 2012).

18. Netscape offered its SmartDownload software free of charge on its website. Users who
wished to obtain SmartDownload from Netscape’s website linked to a download page. On this
page, there was a tinted box labeled “Download.” By clicking on the box, a user initiated the

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download. The sole reference on this page to a License Agreement appeared in text that was
visible only if a user scrolled down through the page and to the next screen. Users were not
required affirmatively agree to the License Agreement by clicking on it, or even to view the
License Agreement, before proceeding with a download of the software. But if a user chose to
click on the underlined text, a link would take the user to a webpage entitled “License & Support
Agreements.” A further click was required before the user was linked to another webpage
containing the full text of the License Agreement. Among the terms of the License Agreement
was a term requiring that all disputes be submitted to arbitration in Santa Clara County, California,
with the losing party paying all costs of arbitration. Several people who downloaded
SmartDownload filed suit against Netscape because of a privacy issue with the software. Netscape
moved to compel arbitration, claiming that the users had accepted the arbitration clause in the
License Agreement. Is Netscape correct? See Specht v. Netscape Communications Corp., 150 F.
Supp.2d 585 (S.D.N.Y. 2001).

19. Harold Parker agreed to buy real estate that was jointly owned by Douglas and Sandy
Glosson, a married couple. A written contract was prepared for the parties’ signatures. One clause
of the agreement stated: “This Agreement shall become an enforceable contract when a fully
executed copy has been communicated to both parties.” Although both Mr. and Mrs. Glosson
were listed in the document as “Sellers,” only Mr. Glosson signed the contract and Mrs. Glosson
never signed it. Afterwards, the Glossons decided not to sell the property to Parker, and Parker
sued them for breach of contract. Was there a valid contract to sell the property? See Parker v.
Glosson, 641 S.E.2d 735 (N.C. Ct. App. 2007).

20. Vincent and Judy Castagna decided to sell their house. Through the Castagnas’ realtor,
Dominick Baffone made an offer to purchase the house for $2.1 million. As a sign that he was
serious about buying the property, he also provided a $50,000 deposit. The Castagnas rejected
Baffone’s offer, and on August 19, 2004, they made a counteroffer, through their realtor, to sell
the property to Baffone for $2.3 million. Baffone told the realtor that he would buy the house for
$2.3 million, but only if the settlement date was December 31, 2004, and only if the Castagnas
agreed to permit Baffone to settle at any time up to that date. The realtor relayed this to the
Castagnas, but they never responded, either affirmatively or negatively. Baffone later made yet
another offer to buy the house, this time offering $2.5 million with no contingencies. The
Castagnas never responded to this offer either. Baffone sued the Castagnas for breach of contract,
claiming that he had accepted the Castagnas’ counteroffer to sell the property for $2.3 million. Is
this a correct? See Sandcastle Realty, Inc. v. Castagna, 2006 WL 2521437 (Del. Ch. 2006).

21. In 1985, State Farm Mutual Insurance issued Deborah Casto an automobile insurance
policy on her Jaguar. Casto also insured a second car, a Porsche, with State Farm. In September
or early October 1987, Casto received two renewal notices for her policy on the Jaguar, indicating
that the next premium was due on October 10, 1987. State Farm sent a notice of cancellation on
October 16, indicating that the policy would be canceled on October 29 unless payment was sent
immediately. On October 20, Casto placed two checks, one for the Jaguar and one for the Porsche,
in two preaddressed envelopes that had been supplied by State Farm. She mailed them on the
same day. The envelope containing the Porsche payment was timely delivered to State Farm, but
State Farm never received the Jaguar payment, and that policy was canceled. Casto was involved
in an accident on November 20 while driving the Jaguar. When she made a claim with State Farm,

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she learned that the policy had been canceled. After the accident, the envelope containing the
Jaguar payment was returned to her stamped, “Returned for postage.” The envelope did not bear
any postage when returned to Casto. Casto brought a declaratory judgment action arguing that her
insurance policy on the Jaguar was in effect as of the date of the accident. Was it? See Casto v.
State Farm Insurance Co., 594 N.E.2d 1004 (Ohio Ct. App. 1991).

22. Paulaner-North America Corp. is an importer of German beer, and Domanik Sales
Company was one of Paulaner’s distributors. The distributorship agreement provided that
Paulaner could terminate the agreement if a default in payment by Domanik remained uncured
five days after Domanik received a demand for payment. The contract also gave Paulaner the right
to establish the terms of payment. Because of a previous default, Paulaner had placed Domanik
on “COD status” and refused to afford it further credit. On March 10, 1998, Paulaner delivered a
shipment of beer to Domanik. On March 18, 1998, Paulaner notified Domanik that the payment
for the March 10 shipment was past due, that the amount due was $23,842.54, that payment was
to be received no later than March 25, 1998, and that the agreement would be terminated if
payment was not received by that date. The invoice for the March 10 delivery was sent by fax to
Domanik on March 18th, arriving after receipt of the default notice. Domanik wrote a check for
the full amount due on Friday, March 20, 1998, and placed the payment in the mail. The envelope
was postmarked Monday, March 23, 1998. Payment was not received by Paulaner in its Colorado
offices until March 26, 1998. The distributorship agreement was terminated by Paulaner that same
day, since payment had not been received as required by the default notice. Domanik contends
that placing the payment in the mail constituted acceptance and payment under the mailbox rule.
Is it correct? See Domanik Sales Co., Inc. v. Paulaner-North America Corp., 622 N.W.2d 769
(Wis. Ct. App. 2000).

23. Hope Calabro’s parents were divorced, and she lived with her mother in Oklahoma while
her father lived in Tennessee. Calabro had an excellent academic record in high school. During
her senior year, her father offered to pay her expenses to attend a distinguished, private university
if she received at least $10,000 in financial aid. At the time that Calabro was applying to colleges,
she knew that she was eligible to attend the University of Oklahoma and receive a full scholarship,
sufficient to pay tuition, room, board, books, and student activity fee. Knowing that her father
would be willing to finance her college education at a private college if she received $10,000 in
financial aid, Calabro applied to and was accepted at a number of private schools, including
Vanderbilt University. In the fall of 1991, Calabro enrolled in Vanderbilt University with her
father paying expenses that exceeded her scholarship. During the Christmas break of 1992,
however, Calabro’s father informed her that he was no longer willing to pay for her college
expenses. At that time he had prepaid her tuition for the spring of 1993 at Vanderbilt. Calabro
continued to attend Vanderbilt and completed her course by taking out student loans that became
due upon her graduation. Calabro brought an action for promissory estoppel against her father,
but the trial court granted a summary judgment in favor of her father. Was this a correct decision
by the court? See Calabro v. Calabro, 1999 Tenn. App. LEXIS 732 (Tenn. Ct. App. 1999).

24. On February 1, 2004, Lanlin Zhang entered into a contract with Frank Sorichetti to buy
Sorichetti’s Las Vegas home for $532,500. The contract listed a March closing date and a few
household furnishings as part of the sale. On February 3rd, Sorichetti told Zhang that he was
terminating the sale “to stay in the house a little longer.” Sorichetti added that he would sell the

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home, however, if Zhang paid more money. Zhang agreed. Another contract was drafted, reciting
a new sales price, $578,000. This contract set an April, rather than March, closing date and
included some household furnishings and certain drapes that were of minimal value and not listed
in the February 1st agreement. Was this a valid modification of the February 1st contract? See
Zhang v. Eighth Judicial Dist. Ct., 103 P.3d 20 (Nev. 2004).

25. In April 1997, James Buchholz entered into a written contract with Schneider’s Milling to
provide between 500 and 590 segregated early weaned (SEW) pigs every three weeks beginning
October 15, 1997. The parties agreed to a price of $36.50 per pig. The contract was to continue
for a period of 48 months. Because Buchholz was just starting a SEW pig program, the parties
recognized that the number of pigs could vary in the first four months. Even after the first four
months passed, however, Buchholz was unable to provide at least 500 pigs every three weeks. At
the same time, the market price for pigs decreased significantly. In September 1998, a
representative of Schneider’s discussed reducing the price to $28 per pig. After some discussion,
Buchholz proposed a price of $30 per pig. On October 8, 1998, the parties agreed to a price of
$30 per pig and that Buchholz would produce at least 500 pigs every three weeks until April 1,
1999, or the contract would be terminated. Buchholz had two deliveries of over 500 pigs, but the
other deliveries were less than 500 pigs. In February 1999, Schneider’s terminated its agreement
with Buchholz. Buchholz filed suit against Schneider’s for breach of contract, claiming
Schneider’s had failed to pay the full contract price for the pigs, which was $36.50 per pig.
Schneider’s asserted that the contract had been modified in October 1998 to reduce the price to
$30 per pig. Was this modification enforceable? See Buchholz v. Schneider’s Milling, 2003 Iowa
App. LEXIS 410 (Iowa Ct. App. 2003).

26. Ruth and Bryan Davis owned seven acres of land in Warren, Massachusetts. On August
19, 1997, Ruth and Bryan conveyed one and one-half acres of that parcel to Bryan’s mother,
Corinne, for “$1.00 in valuable consideration.” Corinne built a house on the property and lived
there for the next seven years. In the spring of 2004, Corinne decided to sell her house. She
marketed her home herself, arranging five showings, negotiating a sales price, and satisfactorily
performing other tasks involved in selling the house and moving. Apparently prompted by
Corinne’s sales activity, Ruth drafted the following typewritten document: “As promised, I will
give the amount of $40,000.00 to Ruth and Bryan Davis, for the value of the land at 1388 Brimfield
Road. Sincerely, Corinne Davis.” Ruth and Bryan requested that Corinne sign it. On May 2,
2004, Bryan took the document to his mother’s home and told her that if she signed it, it “might
save his marriage.” Corinne signed the document that day and Ruth and Bryan signed it sometime
thereafter. When Corrine sold the home, she did not pay $40,000 of the sale proceeds to Bryan and
Ruth. Ruth sued Corinne for breach of contract. Was there consideration to support Corrine’s
promise to pay part of the proceeds to Bryan and Ruth? See Davis v. Davis, 2007 Mass. App. Div.
LEXIS 45 (Mass. Ct. App. 2007).

27. C. Marvin Brads became pastor of the First Baptist Church in January 1958. In June 1971,
Brads had a heart attack. In April 1980, Brads again had heart problems. On the advice of his
doctor, Brads approached the deacons of the church about retirement. Brads proposed that his
salary be reduced after retirement through a series of gradual step-downs to an amount
approximately one-third the salary he was then receiving. Brads’ proposal was accepted by the
deacons. Under the terms of the agreement, the church placed Brads on disability retirement status,

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conferred an honorary title on him, gave him office space in the church, and allotted him retirement
benefits according to the step-down schedule. Brads was required to aid, assist, and advise the
new pastor, to the extent Brads’ health would allow. Brads and the church deacons jointly
recommended to the congregation that it adopt the agreement, which the congregation did,
unanimously. Brads then left his position as pastor and his benefits commenced. In 1985, the
congregation was advised by a church officer that the benefits paid to Brads under the 1980
agreement should continue for Brads’ lifetime. The congregation once again unanimously
approved and reaffirmed the agreement. Brads received his benefits from 1980 through early July
1990, when he was notified by church officials that he had been dismissed from the membership
of the church and that no more payments would be made to him. Other benefits, such as free office
space, were also discontinued. Brads sued the church, contending that it breached its contract.
The church contended that there was no consideration to support its promise to pay retirement
benefits to Brads for life. Is the church correct? See Brads v. First Baptist Church of Germantown,
624 N.W. 2d 737 (Ohio Ct. App. 1993).

28. In October 2002, real estate developer Lotus Property entered into a contract with Robert
and William Greer to purchase 148 acres of land. The contract contained a section entitled “Other
Terms,” which included the following statement: “Property shall be granted a zoning by the Henry
County Board of Commissioners.” Further, the contract was contingent upon Lotus obtaining
sufficient financing and securing sewage easements to run sewage pipes to the property. The
closing date under the contract was to be on or before January 10, 2003. In November 2002, the
Greers sent a request to the Henry County Planning Commission asking it to rezone the property,
and the Greers authorized an officer of Lotus to represent them at the commission’s hearing. By
early January 2003, however, the county had not approved the rezoning request. Further, Lotus
had not yet secured financing for the project, obtained the sewage easements, or applied for any
building permits. On January 9, 2003, the day before the sales contract expired, the parties signed
an extension of the contract allowing Lotus to close on the property “on or before 30 days after
rezoning has been approved” by the county. It is undisputed that Lotus did not pay any additional
compensation to the Greers in exchange for the execution of the extension agreement. It is also
undisputed that Lotus was not ready and willing to close on the property on or before January 10,
2003, because the property had not been rezoned. Was this a valid modification of the contract?
See Lotus Property Development, LLC v. Greer, 630 S.E.2d 112 (Ga. Ct. App. 2006).

29. Florence Goldman was a woman in her 80s whose husband died after a long illness. During
much of her husband’s illness and for some time afterward, she was under the care of a psychiatrist,
who treated her for depression stemming from the strain and grief she experienced because of her
husband’s declining health. August Bequai was an attorney and a long-time friend whom Goldman
regarded as almost a member of her family. After the death of her husband, Goldman, her son,
and Bequai discussed starting a business that would employ both Goldman and her son. Bequai
had told them that he needed to be listed as an owner of property that Goldman owned Washington,
DC, in order adequately to represent the Goldmans’ interests during negotiations over the property.
Bequai told Goldman’s son that the transfer would be temporary and solely for the limited purpose
of inflating his financial worth on paper while he looked for a business to invest in. In January
1986, three months after her husband’s death, Goldman conveyed to Bequai part ownership in her
Washington, DC property for $10 consideration. Goldman had no legal counsel or independent
advice of any sort, and Bequai did not fully explain the nature of the transactions to her. There

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were no witnesses to the transactions other than the notary. The Washington, DC property was
sold in 1990 and the proceeds of the sale were distributed to them. Both Bequai and Goldman
were represented at the closing by an attorney hired by Bequai. After the sale of the property,
Bequai accompanied Goldman to the bank, where both placed their proceeds in investment
accounts that were opened that day. Bequai placed his money in an account he owned jointly with
his wife, whereas Goldman placed her share in a joint account with Bequai. Eventually, Goldman
came to believe that Bequai had exercised undue influence on her to convince to transfer part
ownership of the property to him. What result? See Goldman v. Bequai, 19 F.3d 666 (D.C. Cir.
1994).

30. Donald Odorizzi, an elementary school teacher, was arrested on criminal charges involving
illegal sexual activity. After he was arrested, questioned by police, booked, and released on bail,
and had gone 40 hours without sleep, he was visited in his home by the superintendent of the
school district and the principal of his school. They told him that they were trying to help him and
that they had his best interests at heart. They advised him to resign immediately, stating that there
was no time to consult an attorney. They said that if he did not resign immediately, the district
would dismiss him and publicize the proceedings, but that if he resigned at once, the incident
would not be publicized and would not jeopardize his chances of securing employment as a teacher
elsewhere. Odorizzi gave them a written letter of resignation, which they accepted. The criminal
charges against Odorizzi were later dismissed, and he sought to resume his employment. When
the school district refused to reinstate him, Odorizzi attempted to rescind his letter of resignation
on several grounds, including undue influence. Can Odorizzi avoid the contract on the ground of
undue influence? See Odorizzi v. Bloomfield School District, 54 Cal. Rptr. 533 (Cal. Super. Ct.
1966).

31. Robert and Maria Cherry bought a home from Brian and Rebekah McCall. After the
Cherrys bought the home, they discovered a walled-in room in the basement. The McCalls did
not know about the walled-in room. The room was filled with trash, including rusty plumbing
fixtures, bathtubs, sinks, commodes, boards, pipes, rocks, and used building materials. The trash
was damp and contaminated with mold. In the sales contract with the McCalls, the Cherrys agreed
to accept the property “in its present condition,” or “as is.” The Cherrys claimed that the walled-
in room constituted a mutual mistake justifying rescission. Are they correct? See Cherry v.
McCall, 138 S.W.3d 35 (Tex. Ct. App. 2004).

32. Ron Boskett, a part-time coin dealer, paid $450 for a dime purportedly minted in 1916 at
Denver and two additional coins of relatively small value. After carefully examining the dime,
Beachcomber Coins, a retail coin dealer, bought the coin from Boskett for $500. Boskett and
Beachcomber were certain that the coin was genuine. Beachcomber then received an offer from a
third party to purchase the dime for $700, subject to certification of its genuineness from the
American Numismatic Society (ANS). After inspecting the coin, the ANS labeled the coin a
counterfeit. Can Beachcomber rescind the contract with Boskett on the ground of mutual mistake?
See Beachcomber Coins, Inc. v. Boskett, 400 A.2d 78 (N.J. Super. Ct. 1979).

33. Donald Keith contracted to build a house for Maria Radford. Shortly before the closing,
he met with Radford, accused her of fraud, and threatened to prevent the deal from closing. During
the meeting, Keith’s associate stood outside the door for two hours to prevent her from leaving.

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He gave her the choice of signing a Note and Deed of Trust promising to pay him more money, or
of going to court to settle the matter. Radford signed the agreement, fearing that she would lose
the house if Keith prevented her from closing on the loan, but later she sought to rescind the
agreement on the basis of duress. Can she rescind the agreement? See Radford v. Keith, 584
S.E.2d 815 (N.C. Ct. App. 2003).

34. On April 20, 2010, an oil drilling rig owned by BP named Deepwater Horizon caught fire
and sank off the Gulf Coast of Louisiana, causing a massive oil spill. Part of BP’s response
involved the deployment of oil containment boom, which is a temporary floating barrier placed
around an oil spill. BP had an immediate need for millions of feet of boom, but it encountered
problems with finding enough supply of boom available on the market. Packgen, a small
manufacturer of packaging materials and containers used in the chemical and oil industries, spoke
by phone to an agent of BP. The BP agent orally agreed to purchase more than 60,000 feet of
boom from Packgen for $18.75 per square foot. However, by the time Packgen began
manufacturing boom according to BP’s design specifications, BP had capped the Deepwater
Horizon well and its need for boom quickly diminished. As a result, BP never purchased any of
this boom from Packgen, which subsequently resold it to another buyer for $2.00 per square foot.
When Packgen sued BP for breach of contract, BP argued that the oral agreement was
unenforceable since it was not in writing. Packgen responded that boom was a specially
manufactured good and therefore the statute of frauds did not apply. What result? See Packgen
v. BP Exploration & Production, Inc., 754 F.3d 61 (1st Cir. 2014).

35. Basketball player Michael Jordan agreed to pay $5 million to Karla Knafel, who had told
Jordan that she was pregnant with his child and was certain that he was the father. Jordan had
once had a sexual relationship with Knafel, and agreed to pay her in return for her agreement to
keep their relationship confidential and not pursue a public paternity suit against him. Throughout
her relationship with Jordan, Knafel was having sex with another man. A subsequent paternity
test indicated that Jordan was not the father of the baby and he renounced their settlement
agreement. Knafel sued Jordan for breach of contract. In response to Knafel’s action for breach
of contract, Jordan claimed that the contract was unenforceable because of fraud. What result?
See Jordan v. Knafel, 880 N.E.2d 1061 (Ill. Ct. App. 2007).

36. RRL Corporation is an automobile dealer. Because of typographic and proofreading errors
made by a local newspaper, RRL’s advertisement listed a price for a used 1995 Jaguar XJ6
automobile that was significantly less than the price RRL intended. The advertisement described
the color of this automobile as sapphire blue, included a vehicle identification number, and stated
a price of $25,995. Brian Donovan and his wife read the advertisement and visited the dealership.
When they verified that the identification number on the sticker was the same as that listed in the
advertisement, they asked a salesperson whether they could test drive the Jaguar. After the test
drive, they told the salesperson, “Okay. We will take it at your price.” The salesperson
immediately stated, “That’s a mistake.” The advertised price was $12,000 less than the price RRL
had intended. No RRL employee reviewed a proof sheet of the advertisement before it was
published, and RRL was unaware of the error until Donovan attempted to purchase the automobile.
Because RRL refused to sell the automobile at the advertised price, Donovan sued for breach of
contract. Was a contract formed? If so, can RRL rescind it on the basis of unilateral mistake? See
Donovan v. RRL Corp., 27 P.3d 702 (Cal. 2001).

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37. In August 2003, R.F. Cunningham & Co., a farm products dealer, and Edward Driscoll, a
farmer, entered into an oral contract for the sale of 4,000 bushels of soybeans at a price of $5.50
per bushel, to be picked up after harvest time. Immediately afterward, Cunningham sent to Driscoll
a “purchase confirmation,” and Driscoll did not object to its contents. Later in October 2003,
Driscoll’s lawyer claimed that his client was not legally obligated to complete the contract and
refused to sell his soybeans. As a result, Cunningham had to purchase replacement soybeans at
the then-prevailing market price of $7.74 per bushel, and suffered a financial loss of $8,960.00,
which was the difference between the contract price and Cunningham’s costs to obtain the
replacement soybeans. Cunningham sued Driscoll for breach of contract. Driscoll moved for
summary judgment on the ground that the contract did not satisfy the statute of frauds. Will he
win? See Cunningham & Co. v. Driscoll, 790 N.Y.S.2d 368 (N.Y. Cty. Ct. 2005).

38. On two occasions in 1980, Albert Hodge met with Jon Tilley, president and chief operating
officer of Evans Financial Corporation, to discuss Hodge’s possible employment by Evans. Hodge
was 54 years old at that time and was assistant counsel and assistant secretary of Mellon National
Corporation and Mellon Bank of Pittsburgh. During these discussions, Tilley asked Hodge what
his conditions were for accepting employment with Evans, and Hodge replied, “Number 1, the job
must be permanent. Because of my age, I have a great fear about going back into the marketplace
again. I want to be here until I retire.” Tilley allegedly responded, “I accept that condition.”
Regarding his retirement plans, Hodge later testified, “I really questioned whether I was going to
go much beyond 65.” Hodge later accepted Evans’s offer of employment as vice president and
general counsel. He moved from Pittsburgh to Washington, D.C., in September 1980 and worked
for Evans from that time until he was fired by Tilley on May 7, 1981. Hodge brought a breach of
contract suit against Evans. Evans argued that the oral contract was unenforceable because of the
statute of frauds. Is this correct? See Hodge v. Evans Financial Corp., 823 F.2d 559 (D.C. Cir.
1987).

39. Gladys Green owns a lot (Lot S) in the Manomet section of Plymouth, Massachusetts. In
July 1980, she advertised it for sale. On July 11 and 12, Thomas Hickey discussed with Green
purchasing Lot S and orally agreed to a sale for $15,000. On July 12, Green accepted the Hickeys’
check for $500. Hickey had left the payee line of the deposit check blank because of uncertainty
whether Green or her brother was to receive the check. Hickey asked Green to fill in the
appropriate name. Green, however, held the check, did not fill in the payee’s name, and neither
cashed nor endorsed it. Hickey told Green that his intention was to sell his home and build on the
lot he was buying from Green. Relying on the arrangements with Green, Hickey advertised his
house in newspapers for three days in July and found a purchaser quickly. Within a short time, he
contracted with a purchaser for the sale of the house and accepted the purchaser’s deposit check.
On the back of this check, above Hickey’s signature endorsing the check, was noted: “Deposit on
purchase of property at Sachem Rd. and First St., Manomet, Ma. Sale price, $44,000.” On July
24, Green told Hickey that she no longer intended to sell her property to him and instead had
decided to sell it to someone else for $16,000. Hickey offered to pay Green $16,000 for the lot,
but she refused this offer. Hickey then filed a complaint against Green seeking specific
performance. Green asserted that relief was barred by the statute of frauds. Is this correct? See
Hickey v. Green, 442 N.E.2d 37 (Mass. Ct. App. 1982).

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40. Southridge Presbyterian Church, owner of a residential home, placed it on the market for
$134,500. Eva Ayalla viewed the home and made a written offer to buy it for $1 30,000. The
written offer was made on a residential real estate sale contract form furnished by Southridge
Presbyterian’s real estate agent, Henderson. Ayalla gave Henderson a check for $1,000 as an
earnest money deposit. Henderson orally notified Ayalla’s mortgage broker that Southridge
Presbyterian had accepted Ayalla’s offer. The mortgage broker left a message with Ayalla’s
nephew about this acceptance. The following day, Henderson orally told Ayalla personally of
Southridge Presbyterian’s acceptance. They agreed to meet on May 1, 2005, to complete the
paperwork, and Ayalla made plans to take that day off work. She also scheduled a home inspection
to take place on May 2 or 3. Before her scheduled meeting with Henderson, however, Henderson
called and told Ayalla that Southridge Presbyterian had accepted a higher offer of $142,500 from
a third party. Was Southridge Presbyterian legally obligated to sell the home to Ayalla? See
Ayalla v. Southridge Presbyterian Church, 152 P.3d 670 (Kan. Ct. App. 2007).

41. Everlener Dyer purchased a used Ford from Walt Bennett Ford for $5,895. She signed a
written contract, which showed that no taxes were included in the sales price. Dyer contended,
however, that the salesperson who negotiated the purchase with her told her both before and after
her signing of the contract that the sales tax on the automobile had been paid. The contract Dyer
signed contained the following language: “The above comprises the entire agreement pertaining
to this purchase and no other agreement of any kind, verbal understanding, representation, or
promise whatsoever will be recognized.” It also stated: “This contract constitutes the entire
agreement between the parties and no modification hereof shall be valid in any event and Buyer
expressly waives the right to rely thereon, unless made in writing, signed by Seller.” Later, when
Dyer attempted to license the automobile, she discovered that the Arkansas sales tax had not been
paid on it. She paid the sales tax and sued Bennett for breach of contract. What result? See Walt
Bennett Ford, Inc. v. Dyer, 631 So.2d 312 (Ark. Ct. App. 1982).

42. In July 2004, the Harrises entered into a contract with the Hallbergs to purchase a home in
Waccabuc, New York, for the sum of $1.9 million. Later, the Harrises had second thoughts about
the purchase. In November 2004, the Harrises and Hallbergs signed an agreement which provided
that, upon the forfeiture of the Harrises’ down payment, “all contractual obligations” that the
parties owed each other under the contract of sale would be terminated, and each party would
“have no further obligation” toward the other. The release was consistent with the terms of the
contract of sale, which had specified the Hallbergs’ remedy in the event of a default by the
Harrises. Both parties were represented by independent counsel during the transaction and Mr.
Harris is a lawyer. Later, the Harrises alleged that, prior to signing the release, the parties entered
into an oral agreement whereby the Hallbergs agreed that, if they could sell the property for more
than the sum of $1.9 million, they would return all or part of the Harrises’ down payment. The
Harrises alleged that, although the Hallbergs had apparently sold the property for the sum of $2.4
million, they had refused to return any part of the down payment. Do the Harrises have the legal
right to enforce the alleged oral agreement for the return of the down payment? See Harris v.
Hallberg, 828 N.Y.S.2d 579 (N.Y. 2007).

43. Michelle Rosenfeld, an art dealer, claimed that Jean-Michel Basquiat, an acclaimed
neoexpressionist artist, had agreed to sell to her three paintings entitled “Separation of the K,”
“Atlas,” and “Untitled Head.” She claimed that she went to Basquiat’s apartment on October 25,

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1982, and while she was there he agreed to sell her three paintings for $4,000 each, and that she
picked out the three works. According to Rosenfeld, Basquiat asked for a cash deposit of 10
percent. She left his loft and later returned and paid him $1,000 in cash. When she asked for a
receipt, he got down on the floor and wrote it out in crayon on a large piece of paper, remarking
that “someday this contract will be worth money.” She produced a handwritten document listing
the three paintings, bearing her signature and that of Basquiat, which stated: “$12,000 - $1,000
DEPOSIT - OCT 25 82.” Does this writing satisfy the statute of frauds? See Rosenfeld v.
Basquiat, 78 F.3d 84 (2d Cir. 1996).

44. Billy Light contracted to build a house for the Dale and Lucille Muller. After the job was
completed, the Mullers refused to pay Light the balance they owed him under the contract,
claiming that he had done some of the work in an unworkmanlike manner. When Light sued for
the money, the Mullers counterclaimed for $5,700 damages for delay under a liquidated damages
clause in the contract. The clause provided that Light must pay $100 per day for every day of
delay in completion of the construction. The evidence indicated that the rental value of the home
was between $400 and $415 per month. Should the liquidated damages provision be enforced?
See Muller v. Light, 538 S.W.2d 487 (Tex. Ct. App. 1976).

45. E.L. Faulconer served as an employee of Wysong & Miles Company for approximately 30
years. In October 1981, Faulconer and Wysong & Miles entered into an agreement that provided
for Faulconer to receive supplemental retirement and death benefits from Wysong & Miles in
recognition of his years of faithful service, loyalty to the company (including a noncompete
provision), and required physical check-ups. Faulconer retired from Wysong & Miles in 1987.
Wysong & Miles was obligated to him in the sum of $2,620.80 per month under the agreement. It
made all payments until the fall of 2000. At that point, Wysong & Miles suspended its payments
to Faulconer. Faulconer filed suit against Wysong & Miles, claiming that it had missed eight
payments, and owed him the principal sum of $20,966.40 plus interest. Wysong & Miles admitted
that it had failed to make the payments, but it claimed that its duty to perform was discharged by
impracticability. It stated that the precipitous decline in the metal-working machine manufacturing
industry, for which Wysong was not in any way responsible, and the nonoccurrence of which was
a basic assumption on which the agreement was made, made its performance impracticable. Will
Wysong & Miles prevail on this argument? See Faulconer v. Wysong, 574 S.E.2d 688 (N.C. Ct.
App. 2002).

46. Joann and Louis Basso contracted with Dierberg to purchase her property for $1,310,000.
One term of the contract stated: “The sale under this contract shall be closed … At the office of
Community Title Company … on May 16, 1988 at 10:00 AM. … Time is of the essence of this
contract.” Afterwards, the Bassos assigned their right to purchase Dierberg’s property to Miceli
& Slonim Development Corporation. At 10:00 AM on May 16, 1988, Dierberg appeared at
Community Title for the closing. No representative of Miceli & Slonim was there, nor did anyone
from Miceli & Slonim inform Dierberg that there would be any delay in the closing. At 10:20
AM, Dierberg declared the contract null and void because the contract did not take place as agreed,
and she left the title company office shortly thereafter. Dierberg had intended to use the money to
close another contract to purchase real estate later in the day. Around 10:30 AM, a representative
of Miceli & Slonim appeared at Community Title to begin the closing, but the representative did
not have the funds for payment until 1:30 PM. Because she had already made alternative

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arrangements to finance her purchase of the other real estate, Dierberg refused to return to the title
company, stating that Miceli and Slonim had materially breached the contract by failing to tender
payment on time. Is this correct? See F.J. Miceli & Slonim Development Corp. v. Dierberg, 773
S.W.2d 154 (Mo. Ct. App. 1989).

47. Bende & Sons, Inc. agreed to sell 10,000 pairs of combat boots to the government of Ghana
for $158,500. Bende promised to deliver the boots “as soon as possible.” Bende then contracted
with Kiffe Products, which agreed to manufacture the boots for resale by Bende to Ghana within
sixty to ninety days at a price of $95,000. The contract contained no force majeure clause. The
boots were made and shipped to Seattle, where they were loaded on railroad cars for delivery to
Bende. However, the train transporting the boots derailed in Nebraska and most of the boots were
destroyed. When Kiffe was notified that it could not deliver the boots due to the derailment, Bende
brought an action for breach of contract. Kiffe argued that it was impossible to perform the
contract due to the train accident. Is Kiffe excused from performance? See Bende & Sons, Inc. v.
Crown Recreation, Inc., 548 F. Supp. 1018 (E.D.N.Y. 1982).

48. Advent Systems developed an electronic document management system (EDMS), a

process for transforming engineering drawings and similar documents into a computer database.
Unisys Corporation decided to market Advent’s EDMS system. In the summer of 1987, Advent
and Unisys signed a contract by which Advent agreed to provide the hardware and software
making up the EDMS, as well as sales and marketing material and the technical personnel to train
Unisys employees in the building and installation of the system. Advent was to invoice Unisys
for each product purchased upon shipment. The agreement was to continue for two years. A few
months later, however, Unisys decided it would be better served by developing its own document
system and in December 1987 told Advent that their arrangement had ended. Advent sued for
breach of contract. Was the UCC applicable to this contract? See Advent Systems, Ltd. v. Unisys
Corp., 925 F.2d 670 (3d Cir. 1991).

49. Thomas Ferguson and Theresa Carnes are the only living children of a wealthy mother,
who frequently threatened to disinherit both of them. Ferguson and Carnes entered into an oral
agreement in order to assure each other against disinheritance. The oral agreement provided that
if one sibling were disinherited, the other would divide evenly between them whatever property
he or she received from their mother’s estate. Eventually, the mother disinherited Ferguson and
designated Carnes as her sole beneficiary. After their mother’s death, Carnes refused to divide her
inheritance with Ferguson. Ferguson filed a breach of contract claim, and Carnes moved for
summary judgment, claiming that the alleged oral agreement was invalid for lack of consideration.
Did the oral agreement between Ferguson and Carnes lack consideration? See Ferguson v. Carnes,
125 S.E.3d 841 (Fla. Ct. App. 2013).

50. LeSea Broadcasting, Inc. owns a number of television stations. About half the programs
broadcast by the stations are religious in character. LeSea hired Miller to be the general manager
of its Kenosha station in 1993. Miller’s employment contract with LeSea contained a clause that
entitled Miller, for as long as he was employed by LeSea and for two years after, to “match” any
offer to purchase the station “upon the exact terms and conditions as contained in the offer.” In
January of 1995, Paxson Communications Corporation, a large broadcaster, submitted to LeSea a
proposal to buy Channel 55 for $2.5 million through Christian Network, Inc. (CNI), a company

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affiliated with Paxson. LeSea forwarded the proposal to Miller. On March 31, LeSea signed a
contract to sell the station, at the same price, to (CNI). Miller received a copy of the contract
between LeSea and CNI on April 12, 1995. The next day he told LeSea that he was exercising his
right of first refusal. Miller planned to resell the station to a third party buyer. After a series of
negotiations between LeSea and Miller failed to lead to an agreement, Miller sought specific
performance of contract. Miller lost $500,000 in profit by being denied the purchase of the station
and the ability to resell it to the third party buyer. Is Miller entitled to specific performance as a
remedy if he is able to prove that LeSea acted in bad faith in refusing to honor his right of first
refusal? See Miller v. Le Sea Broadcasting, Inc., 87 F.3d 224 (7th Cir. 1996).

51. Iams Co. is in the business of manufacturing and selling pet foods. For many years,
Watkins was a nonexclusive distributor of Iams products in Michigan. In 1986, Iams began to
require Watkins and its other distributors to sign yearly distributorship agreements. In 1986,
Wolverton, Inc. also began selling Iams’ products in Michigan. On 1989, Iams began offering its
distributors a 2% discount on its products in return for a commitment from the distributors that
they sell Iams products exclusively. Watkins alleges that in 1990, Iams promised it that if it
became an exclusive Iams distributor, Iams would grant it an exclusive sales territory in Michigan.
Watkins claims that it relied on this promise when it agreed to sell only Iams products. The written
contract between Iams and Watkins entered into on January 31, 1993 stated: “[T]he Company
(Iams) reserves the right for itself to sell Products within the Territory (Michigan). In addition,
the Company may appoint any other distributor to sell products within the Territory.” The contract
also contained the following provision: “THIS AGREEMENT TOGETHER WITH THE
COMPANY’S STANDARD TERMS AND CONDITIONS OF SALE REPRESENT THE
ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR,
EXISTING, AND CONTEMPORANEOUS AGREEMENTS, WHETHER WRITTEN OR
ORAL, BETWEEN THE PARTIES HERETO RELATING TO THE DISTRIBUTION OR SALE
OF THE COMPANY’S PRODUCTS.” Instead of making Watkins its exclusive distributor, Iams
notified Watkins in September 1993 that it would enter into an exclusive distribution agreement
in Michigan with Wolverton instead and would not renew its contract with Watkins. Watkins sued
Iams for breach of contract and promissory estoppel. Iams argued that his claim based on Iams’
representations to him must fail due to the parol evidence rule. What result? See Watkins & Sons
Pet Supplies v. Iams Co., 254 F.3d 607 (6th Cir. 2001).

52. PR Restaurants, LLC (PR) operates 22 Panera Bread restaurants in the New England area.
Panera is a café style restaurant that sells sandwiches, coffee, and soup. On March 14, 2001, PR
entered into a 10-year commercial lease agreement with White City Shopping Center, LP for
approximately 4,469 square feet of retail space. The lease contained an exclusivity clause that
restricted White City from entering into new leases with businesses that primarily sell sandwiches.
The clause provides, in relevant part: “Landlord (White City) agrees not to enter into a lease,
occupancy agreement or license affecting space in the Shopping Center … for a bakery or
restaurant reasonably expected to have annual sales of sandwiches[.]” The lease contained no
definition of “sandwiches.” On August 22, 2006, White City executed a lease with Chair 5
Restaurants for retail space in the shopping center. Chair 5 is a franchisee of a Mexican-style
restaurant chain that sells burritos, quesadillas, and tacos. Both Panera and Chair 5 compete in the
same “fast-casual” restaurant market. PR objected to the lease on the basis that burritos,
quesadillas, and tacos fell within the meaning of “sandwiches.” White City filed an action against

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PR seeking a declaratory judgment that it did not breach its lease with PR. What result? See White
City Shopping Center, LP v. PR Restaurants, LLC, 2006 WL 3292641 (Mass. Super. Ct. 2006).

53. Joan Sullivan managed a horse farm on property owned by John and Merval Porter. The
Porters offered to sell the property to Sullivan because they planned to move. Sullivan orally
accepted the offer and agreed to pay $350,000. John Porter stated that he would have his attorney
prepare the documentation, and the Porters moved the next month and turned over the farm to
Sullivan, who began making extensive renovations to the property. Two months later, the Porters
told Sullivan that someone else had expressed interest in buying the property and Sullivan
responded by paying $3,000 in partial payment of the $20,000 agreed-to down payment. Eight
months later, the Porters told Sullivan that the price was now $450,000 and demanded a $50,000
down payment. When Sullivan sued to enforce their original agreement, the Porters asserted that
the contract was unenforceable because it was oral. What result? See Sullivan v. Porter, 861 A.2d
625 (Me. 2004).

54. Patricia Niehaus was an employee of Delaware Valley Medical Center. Her employer
distributed an employee handbook that stated it an employee were granted an approved leave of
absence, that employee, at the end of the leave, would be granted the same position or one similar
to the position occupied before the leave of absence. The handbook also stated, however, that the
provisions in the handbook were not to be interpreted as a contract of employment and that either
party could terminate the employment relationship at any time. Niehaus made a written request
for a leave of absence, and her request was approved. At the end of her leave, however, Delaware
Valley refused to rehire her for any position. Can Niehaus sued the Delaware Valley for breach
of contract based on promissory estoppel? See Niehaus v. Delaware Valley Med. Center., 631
A.2d 1314 (Pa. Super. Ct. 1993).

55. Carl Gorham was a store manager for LensCrafters earning an annual salary of $38,000
when he received a phone call from Benson Optical offering him a job. After an interview, he was
offered the job of area manager for half of North Carolina, plus stores in Kentucky and Florida for
a $50,000 salary. Terms were discussed over the phone and he was told a confirming letter and
packet would follow. When he received nothing, he phoned and were told they were in the mail
and that he should quit his job with LensCrafters, which he did. He declined further negotiations
with LensCrafters, flew to Chicago at his own expense, and reported for a nationwide sales
meeting, which was his first day of employment. At this meeting, Gorham was “reinterviewed”
and then terminated. When he sued for breach of contract, Benson argued that Gorham had been
promised employment at will, which gave it the right to fire him at any time for any legal reason,
including on his first day of work. Can Gorham enforce the promise of employment on the basis
of promissory estoppel? See Gorham v. Benson Optical, 539 N.W.2d 798 (Minn. Ct. App. 1995).

56. Kaufmann was employed by Fiduciary Management, Inc. (FMI). In September 1988,
Lanier, the president of FMI, gave a letter to Kaufmann that stated in part: “If your employment is
terminated without cause before July 1, 1990, Fiduciary Management, Inc. agrees that within one
month of the date on which your full salary ceases to be paid you will receive an additional
payment of $150,000.” Lanier believed that Kaufmann was distracted and was considering leaving
FMI and intended the letter to help him focus on his work and give him a sense of job security.
After receiving the letter, however, Kaufmann began a secret and systematic search for another

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job. In January 1990, he ended his employment with FMI, but was not paid the $150,000 that had
been promised in the letter. He sued FMI to recover the money based on promissory estoppel.
Was Lanier’s promise to Kaufmann enforceable? See Kaufmann v. Fiduciary Management, Inc.,
1992 Ohio App. LEXIS 4923 (Ohio Ct. App. 1993).

57. Cascade Auto Glass, Inc. is an automobile glass replacement company. Between 1999 and
2004, Cascade repaired and replaced damaged windshields in at leat 2,284 vehicles insured by
GMAC-affiliated insurance companies. Before 1999, GMAC administered its own glass repair
and replacement program and typically paid the full amount billed by Cascade for work performed
for its insureds. In 1999, GMAC contracted with Safelite Solutions to serve as third-party
administrator of its auto glass program. Safelite informed Cascade that GMAC would now pay
lower prices for Cascade’s services. Cascade disputed the Safelite prices, but when a GMAC
insured sought services, Safelite would send Cascade a confirmation fax stating the lower price it
would pay and a statement that “[p]erformance of services constitutes acceptance of the above
price.” Although Cascade would perform the services and bill GMAC a higher rate that it
considered to be “fair and reasonable,” Safelite paid Cascade at the lower price quoted in its fax.
Cascade accepted and deposited these payments, but sued GMAC for the additional sums it
claimed were owed. GMAC argued that Safelite’s performance resulted in a unilateral contract
based on payment at the lower rate. What result? See CIM Insurance Co. v. Cascade Auto Glass,
Inc., 660 S.E.2d 907 (N.C. Ct. App. 2008).

58. Blockbuster Online is a service that allows customers to rent movies through the Internet.
Blockbuster entered into a contract with Facebook that caused the movie rental choices of
Blockbuster customers to be posted on their Facebook pages and distributed to their Facebook
friends. Cathryn Harris, a Blockbuster customer, filed suit on the basis that this change violated
her privacy rights under federal law. In response, Blockbuster invoked an arbitration provision in
its contract governing “Dispute Resolution” that states, in pertinent part: “[a]ll claims, disputes or
controversies ... will be referred to and determined by binding arbitration.” As a precondition to
joining Blockbuster Online, customers were required to click on a box certifying that they had read
and agreed to the terms and conditions of the contract. The contract further stated: “Blockbuster
may at any time, and at its sole discretion, modify these Terms and Conditions of Use, including
without limitation the Privacy Policy, with or without notice. Such modifications will be effective
immediately upon posting.” Is the arbitration clause enforceable? See Harris v. Blockbuster, Inc.,
622 F. Supp.2d 396 (N.D. Tex. 2009).

59. Beemac Trucking planned to build and operate a compressed natural gas fueling station to
service its fleet and sell gas to the public. In early 2012, Beemac contacted CNG Concepts, a
seller’s agent, to discuss its interest in acquiring the equipment needed to construct the fueling
station. CNG referred Beemac to Aspro USA and they entered into negotiations. On December
7, 2012, Aspro sent Beemac an offer, which included Aspro’s general terms and conditions.
Included in those terms and conditions was a Texas forum selection clause. On January 28, 2013,
after continued negotiations, Aspro sent Beemac a revised offer, which included different
equipment and a different price than the December 7 proposal, but did not contain the general
terms and conditions. On February 12, 2013, Beemac accepted Aspro’s offer and made partial
payment. After not receiving the equipment by the agreed upon date, Beemac cancelled the order
and filed suit for breach of contract in a Pennsylvania court. Aspro sought to enforce the forum

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selection clause and relocate the case to Texas. Does the contract include the forum selection
clause? See Beemac Trucking, LLC v. CNG Concepts, LLC, 2016 WL 638735 (Pa. Super. Ct.
2016).

60. Andrew and Joyce Pride owned a house in Missouri. In 2002, they moved to a farm and
placed the house for sale with Priority One Realty. The house sat empty for some time. The Prides
then found a tenant to rent the house for $450 per month until such time as it was sold. In April,
Larry Lewis presented the Prides with an offer to purchase the house for $55,000. The Prides
rejected this offer. Lewis then presented them with a second written offer, already signed by him
on April 9, 2003, stating a closing date of May 15, 2003. The Prides changed this date by hand to
June 1, 2003, initialed the change in the closing date and signed it and signed the contract on April
9, 2003. They notified their tenant that she would have to vacate the property by June 1. However,
Lewis never initialed the change to the closing date. On June 1, the Prides and their realtor were
prepared to close on the property, but neither Lewis nor his realtor ever appeared. When Lewis
failed to appear for the closing, the Prides sent him a letter notifying him of his default and later
relisted and sold the house for $40,000 in 2004. The Prides were unable to find another tenant for
the additional time that the house was for sale. Can the Prides successfully sue Lewis for breach
of contract? See Pride v. Lewis, 179 S.W.2d 375 (Mo. Ct. App. 2005).

61. On April 2, 1999, V.J. Lively ordered a laptop computer from Monarch Computer Systems.
He paid for the computer at the time he ordered it. The computer was manufactured, delivered,
and invoiced through IJAM, Inc. Lively found the invoice in the box with the computer when it
was delivered. On the back of the invoice was a forum selection clause stating that the parties
agree that the state or federal courts in Georgia would have jurisdiction over any disputes regarding
the contract. In February 2000, Lively contacted Monarch when the computer began
malfunctioning. After being informed that the computer was still under warranty, Lively returned
the computer to Monarch for repair. Monarch sent the computer back to Lively in June 2000.
Lively claims that the computer again stopped working about two weeks after it was returned by
Monarch. He contacted Monarch and was told to return the computer again for repair. Lively
claims that he returned the computer to Monarch a second time, but since returning it, he has not
heard from Monarch or IJAM and they have not returned the computer. He filed suit for breach
of contract against IJAM and Monarch in an Oklahoma trial court. IJAM and Monarch filed a
motion to dismiss the case in Oklahoma and enforce the forum selection clause. Both Monarch
and IJAM are located in Georgia. Is the forum selection clause binding on Lively? See Lively v.
IJAM, Inc., 114 P.3d 487 (Okla. Ct. App. 2005).

62. John Soldau was discharged by his employer, Organon, Inc. He received a letter from
Organon offering to pay him double the normal severance pay in exchange for a release by Soldau
of all claims against Organon regarding the discharge. Soldau signed and dated the release and
deposited it in a mailbox outside of a post office. When he returned home, he had received a check
from Organon for the increased severance pay. Soldau returned to the post office, persuaded a
postal employee to open the mailbox, and retrieved the release. He cashed the severance paycheck
and then filed suit against Organon for discharging him in violation of the federal Age
Discrimination in Employment Act. Did Soldau accept the release agreement? See Soldau v.
Organon, 860 F.2d 355 (9th Cir. 1988).

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63. In 1991, Roger and Louise Neuhoff purchased and installed sixty windows manufactured
by Marvin Lumber & Cedar Co. Several years later, they noticed that many of the windows were
decaying and notified Marvin of the decay. Marvin sent an agent to inspect the windows. The
inspection showed that 56 windows had either “obvious decay” or “incipient decay.” In March
1998, Marvin sent the Neuhoffs a letter promising to replace 33 windows for free. A few weeks
later, after inquiring about the remaining windows, Marvin’s agent orally informed them that the
remaining windows would be replaced for free, but that Marvin could not replace them yet due to
production problems. In 1999, Marvin replaced 33 of the windows that were in the most advanced
state of decay. In June 2000, the Neuhoffs contacted Marvin again because the windows that had
not been replaced had reached an advanced state of decay. Marvin sent another inspector to the
Neuhoffs’ home. This inspector concluded that 21 windows, including four of the newly installed
windows, had obvious decay. In January 2001, Marvin informed the Neuhoffs that their windows
would not be replaced for free, but that the Neuhoffs could purchase replacement windows at a
32% discount. The Neuhoffs allege that Marvin breached its contract to provide replacement
windows for free. Marvin filed for summary judgment on the basis that its promise to repair lacked
consideration. What result? See Neuhoff v. Marvin Lumber & Cedar Co., 370 F.3d 197 (1st Cir.
2004).

64. Bruce Holt worked as a manager for Home Depot from January 1995 to July 1999.
Throughout those years, Home Depot assured employees through statements in the employee
handbook and other communications that if they took advantage of the company’s open-door
procedure to complain to management about their supervisors, they would not be penalized. In
March 1999, Home Depot moved Holt and his family to Connecticut so he could manage a new
distribution center. Soon after he started there, he began to have disagreements with his immediate
supervisor. In June, he contacted a senior manager regarding his problems with her. On July 3,
Holt called Home Depot to make a formal complaint against her, but on July 9, he was terminated.
Holt sued Home Depot for wrongful termination on the basis of promissory estoppel, claiming that
he reasonably relied on Home Depot’s promise. What result? See Holt v. Home Depot, U.S.A.,
Inc., 2004 U.S. Dist. LEXIS 824 (D. Conn. 2004).

65. During the summer of 1991, K-Mart Corp. built a new store in Bollingbrook, Illinois. The
general contractor hired M.J. Oldenstedt Plumbing Co. as a subcontractor to install the site utilities
(the water main, storm sewer, and sanitary sewer) and interior plumbing. Oldenstedt agreed to
install the site utilities and interior plumbing for $709,500, but failed to complete the work by July
18th as required by the contract. Oldestedt’s failure to complete the work resulted the need to
reschedule the work of other subcontractors and in delays for the entire project. On July 29th, K-
Mart delivered a termination letter to Oldenstedt stating that it had breached the contract and that
the contract was therefore cancelled. Following the termination of the contract with Oldenstedt,
K-Mart hired other subcontractors to complete the site utility work and interior plumbing. Was
Oldenstedt’s failure to finish the work by July 18th a material breach of contract? Can Oldensteadt
recover payment of the full amount of the contract price from K-Mart? See M.J. Oldenstedt
Plumbing Co. v. K-Mart Corp., 629 N.E.2d 214 (Ill. Ct. App. 1994).

66. In April of 1978 and April of 1981, Wayne Carpenter entered into two separate purchases
of land from an agency of the State of Alaska. The land sale contracts for both transactions
contained the same disclaimer: “The Seller makes no warranty, express or implied, nor assumes

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any liability whatever, regarding the social, economic, or environmental aspects of the Parcel, to
include, without limitation, the soil conditions, water drainage, or natural or artificial hazards.”
The contracts also required the buyer to improve and develop the land as a working farm. In 1980
and 1983, Carpenter borrowed money from the Agricultural Revolving Loan Fund (ARLF), a state
agency created to lend money to farmers to help them develop their land. Carpenter made repeated
efforts over the years to plant, but these efforts were unsuccessful. Spring flooding of the land
became a perennial problem. As soon as the ground thawed in June, the water table rose and the
land became too wet to support the equipment required for planting. In 1987, Carpenter abandoned
efforts to farm the land. The land was reclassified as unsuitable for agriculture. Carpenter ceased
making payments toward his ARLF loans. ARLF filed an action for breach of contract,
repossession, and foreclosure. Carpenter claimed he was excused from performing the contracts
because of mutual mistake. The State argued that Carpenter bore the risk of any mistake. What
result? See State of Alaska v. Carpenter, 268 P.2d 1181 (Alaska 1994).

67. Olga Mestrovic died on August 31, 1984 and 1st Source Bank was appointed executor of
her estate. At the time of her death, Olga Mestrovic was the owner of a large number of works of
art created by her husband, Ivan Mestrovic, an internationally-known sculptor and artist. By the
terms of Olga’s will, all the works of art created by her husband were to be sold and the proceeds
distributed to members of the Mestrovic family. In March of 1985, the Bank entered into an
agreement to sell the real estate to Terence and Antoinette Wilkins. Immediately after closing on
the real estate, the Wilkins complained that the premises were left in a cluttered condition and
would require substantial cleaning effort. The Bank, through its trust officer, proposed two options:
the Bank could retain a rubbish removal service to clean the property or the Wilkins could clean
the premises and keep any items of personal property they wanted. The Wilkins opted to clean the
property themselves. During their clean-up efforts, the Wilkins found eight drawings and a
sculpture created by Ivan Mestrovic. The Wilkins claimed ownership of the works of art, based
upon their agreement with the Bank that if they cleaned the real property then they could keep
such personal property as they desired. At the time arrangements were made concerning the
cluttered condition of the real property, neither the Bank nor the Wilkins suspected that any works
of art remained on the premises. The Bank sought rescission of the contract on the basis of mutual
mistake. What result? See Wilkin v. 1st Source Bank, 548 N.E.2d 170 (Ind. Ct. App. 1990).

68. Lynn Roose hired the law firm Gallagher, Langlas and Gallagher, P.C., to represent her in
her divorce. Attorney Thomas Langlas signed an attorney fee contract in August 1994, and gave
it to Roose to sign and return. He also requested a $2,000 retainer fee. Roose never signed or
returned the contract, and did not pay the retainer fee in full. The firm represented Roose even
though she did not sign the contract or pay the retainer fee in full. On April 10, 1995, the Gallagher
attorneys met with Roose and her father, Gaylen Burco. The attorneys told Burco that the expense
of his daughter’s child custody trial would be approximately $1,000 per day. The firm would not
guarantee Burco the trial would last only two or three days. The firm contends that during the
meeting Burco agreed to be responsible for the remainder of Roose’s account. Burco denies an
agreement. At the end of the meeting Burco gave the firm a check for $1,000 to pay the outstanding
balance of $814.92 on Roose’s account and said he would pay for future services. Before trial,
Mary Chicchelly, an attorney with the firm, contacted Burco requesting an additional retainer to
secure fees to be incurred and Burco told her, “My word as a gentleman should be enough. ... I
told Mr. Langlas I would pay and I will pay.” Roose failed to pay her legal fees. In July 1995, the

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attorneys sent Burco a letter requesting $5,000 for Roose’s legal fees or the signing of a promissory
note. At the end of July, they sent Burco another letter asking him to sign a promissory note for
$10,000. Neither Roose nor Burco paid the attorney fees or signed the notes. The firm represented
Roose in the July 1995 trial. Burco took an active part in the trial by testifying and participating
in conferences with counsel during recesses. After trial, Burco returned the second letter and
promissory note with a notation stating he was not responsible for his daughter’s attorney fees.
The firm filed a motion to withdraw from Roose’s case in July 1996 and the motion was granted.
The firm filed suit against Burco and Roose for the unpaid legal fees. Burco raised the statute of
frauds to argue that his oral promise was unenforceable. What result? See Gallagher, Langlas &
Gallagher, P.C. v. Burco, 587 N.W.2d 615 (Iowa Ct. App. 1998).

69. In July 1984, Sandra Slivinsky applied for a job as a materials scientist with Watkins-
Johnson Company, a large aerospace manufacturer. Directly above the signature line on the
application she signed was the statement: “I understand that employment by WATKINS-
JOHNSON COMPANY is conditional upon ... execution of an Employment Agreement. ... I
further understand that if I become employed by Watkins-Johnson Company, there will be no
agreement, expressed or implied, between the company and me for any specific period of
employment, nor for continuing or long-term employment.” Over the next several months,
Watkins-Johnson contacted Slivinsky’s references, requested her transcripts, and set up a series of
interviews. Slivinsky claims that at these interviews she was orally promised “long-term,”
“indefinite,” and “permanent” employment, not dependent on business cycles, and subject to
termination only for cause. Finally, Watkins-Johnson made a verbal offer of employment to
Slivinsky and she accepted. On January 7, 1985, which was Slivinsky’s first day at work, Slivinsky
signed the employee agreement that had been referred to in her employment application. Set apart
in bold type, the last paragraph of this agreement provided that there was no express or implied
agreement between the parties regarding the duration of her employment and that the employment
could be terminated at any time with or without cause. In January 1986, Watkins-Johnson
experienced significant business losses and government contract cancellations. The management
decided that employee cutbacks were essential to cope with the loss of business. Ultimately, 24
employees, including Slivinsky, were selected for the reduction in force program. Watkins-
Johnson terminated her employment in June 1986. Slivinsky brought suit against Watkins-
Johnson for breach of the employment contract, asserting that she had been terminated without
cause. Are Watkins-Johnson’s oral assurances of job security to Slivinsky admissible as evidence?
See Slivinsky v. Watkins-Johnson Co., 270 Cal. Rptr. 585 (Cal. Ct. App. 1990).

70. On October 23, 1990, attorney Barbara DeGennaro, an associate of the law firm of Crozier
& Gudsnuk, P. C., agreed to represent Michael Valentine, Jr., who had been charged with criminal
assault. Michael’s parents, Michael F. Valentine, Sr. and Lorraine A. Valentine, orally agreed to
guarantee payment for legal fees incurred in the defense of their son. The law firm represented
the Michael in the criminal assault charge until February 25, 1991, when such representation was
concluded at the request of his parents. The law firm claimed that the reasonable value of the legal
services it performed for Michael amount to $4,200. The law firm billed Michael, but he was
unable to pay this amount and his parents refused to do so as well. Is their oral agreement to pay
for Michael’s legal representation enforceable? See Crozier & Gudsnuk, P.C. v. Valentine, 1992
Conn. Super. LEXIS 1179 (Conn. Super. Ct. 1992).

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71. Kathy Sue Drowne was employed as a beautician at Hidden Hills, a Sun City beauty salon,
in October, 1982. She was an employee at will, meaning that she had no contract for a specific
term of employment and could resign or be terminated at any time for any reason. Two years later,
on November 21, 1984, Drowne signed an noncompetition agreement with Hidden Hills. The
agreement provided that she would not engage in competition in “the beauty salon business” within
a “six square mile radius” of Hidden Hills for one year following termination of her employment
with Hidden Hills. Drowne voluntarily terminated her employment with Hidden Hills during
February, 1985. She began working for Fountainbell Hair Salon located approximately one and a
half miles from Hidden Hills. Diane Mattison, the owner of Hidden Hills, filed suit against
Drowne for breach of her contract not to compete with Mattison’s business. Drowne argued that
the contract was unenforceable due to lack of consideration. What result? Would it matter if
instead there had been a prior contract of employment between Drowne and Hidden Hills at the
time she signed the noncompetition agreement? See Mattison v. Johnston, 730 P.2d 286 (Ariz. Ct.
App. 1986).

72. Audio Visual Artistry (AVA) is a residential entertainment and communications firm
specializing in custom design projects. On March 26, 2004, Stephen Tanzer and AVA began
discussions for the sale and installation of a “smart home” electronic and entertainment system in
Tanzer’s house. On September 22, 2004, AVA and Tanzer entered into a written contract
providing for the components, parts, and installation of the system for $78,567.13. The pricing for
this work was broken out as follows: equipment, $56,375; labor, $9,880; cable and parts, $5,660;
and tax, $6,652.13. After installation, Tanzer had significant problems with the functionality of
the system that AVA was unable to correct. When Tanzer refused to pay the outstanding balance
of $43,824.55 due, AVA filed suit for breach of contract. Does the UCC or common law apply
to the contract? See Audio Visual Artistry v. Tanzer, 2012 WL 6697600 (Tenn. Ct. App. 2014).

73. Attorney James Cheney Mason represented criminal defendant Nelson Serrano, who was
accused of murdering his former business partner as well as the son, daughter, and son-in-law of
another business partner. Serrano claimed to be on a business trip in an entirely different state,
several hundred miles away from the scenes of the murder in Florida. Hotel surveillance confirmed
that Serrano was at a La Quinta Inn in Atlanta, Georgia. However, the prosecution maintained
that he committed the murders in an approximately 10-hour span between the times that he was
seen on the security camera. According to the prosecution, Serrano slipped out of the hotel,
travelled under several aliases, flew from Atlanta to Orlando, where he rented a car, and drove to
the location where he committed the murders. From there, he allegedly drove to the Tampa airport,
flew back to Atlanta, and drove from the airport back to the La Quinta Inn. While Mason was
representing Serrano, he participated in an interview with NBC News in which he discussed his
client’s alibi on the day of the murders. During the interview, Mason argued that it was impossible
for his client to have committed the murders within the 10-timeline due to the delays that Serrano
would likely have encountered. Mason stated, “I challenge anybody to show me … I’ll pay them
a million dollars if they can do it.” Mason did not include any information as to how to contact
him nor did he later repeat the statement. Dustin Kolodziej, a law student, watched the interview
and decided to record himself retracing Serrano’s alleged route. He then sent Mason a copy of the
recording and a letter stating that he accepted Mason’s challenge to form a unilateral contract and
requested payment of the million dollars. Mason refused, denying that he had made a serious offer

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in the interview. Did Mason intend to make an offer to form a unilateral contract? See Kolodziej
v. Mason, 2014 WL 7180962 (11th Cir. 2014).

74. Donald Hansen was employed as a branch manager by GAB Business Services. One of
his obligations was to ensure that the branch met its budget goals. A written incentive
compensation plan stated that a branch manager could be eligible for a bonus if that branch fulfilled
its budget goals. However, the plan also stated: “Nothing contained in the description, definitions
or provisions of this Plan or other references to this Plan shall establish any right or contractual
obligation for payment to any individual or class of employees.” When Hansen claimed to have
met GAB’s budget goals for his branch, GAB denied his eligibility for an incentive bonus. Hansen
sued GAB on the basis of promissory estoppel contending that he had relied on GAB’s promise.
What result? See Hansen v. GAB Business Services, Inc., 876 P.2d 112 (Colo. Ct. App. 1994).

75. H&W Industries is a Mississippi pipe manufacturer and Occidental Chemical Corp. is a
Pennsylvania chemical manufacturer. After telephone negotiations between the two companies,
H&W mailed a purchase order for resin to Occidental. Occidental mailed back a form accepting
the order. On the back of the form was a forum selection clause that read: “The parties agree that
any litigation arising out of this Agreement shall be brought only in the federal or state courts in
the State of Pennsylvania and both parties consent to the jurisdiction of said courts.” When a
dispute arose over the performance of the contract, Occidental filed suit in a Pennsylvania federal
district court. H&W objected to the court’s jurisdiction since the acceptance form imposed a new
term, the forum selection clause, which was not part of the parties’ agreement. Occidental
conceded that H&W did not otherwise have sufficient minimum contacts with Pennsylvania to
justify personal jurisdiction, but argued that the forum selection clause applied since it was part of
the contract. What result? See Occidental Chemical Corp. v. H&W Industries, Inc., 1985 U.S.
Dist. LEXIS 19740 (E.D. Pa. 1985).

78. American Energy Services (AES) was formed in 1996 and hired eight employees that year.
At a meeting in 1997, the employees expressed concern to an executive that the company was not
likely to survive because they used outdated equipment and the company required them to work
long hours. The executive told the employees that they should stay with the company because it
was likely the firm would merge with another company and, if it did, the original eight employees
would be rewarded with five percent of the value of the sale or merger of AES. In 2001, AES was
bought by another company. Seven of the eight original employees were still with AES and
requested their five percent of the sale price. AES refused to pay, contending that the agreement
was unenforceable. The employees sued for breach of contract. Did AES and the employees enter
into a valid contract? If so, what type of contract? See Vanegas v. American Energy Services, 302
S.W.3d 299 (Tex. 2009).

79. Paramount Contracting Co., a civil engineering firm and general contractor, submitted a
bid to construct runway improvements at the Atlanta international airport. In its bid, Paramount
included a quote from DPS Industries for supplying the fill dirt for the project. DPS’s written quite
stated that it would “furnish and haul/deliver borrow dirt from DPS’s location to the job site.” The
quote provided that the dirt would be delivered for a price of $140/Truck Load.” Paramount was
awarded the airport project and notified DPS about the amount of dirt it would need. However,
Paramount ultimately bought the dirt it needed from another vendor. DPS sued Paramount for

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breach of contract. Is dirt a good? If so, is the contract governed by the UCC? See Paramount
Contracting Co. v. DPS Industries, Inc., 709 S.E.2d 288 (Ga. Ct. App. 2011).

80. In 1986, Consolidated Edison Co. (Con Edison) sought bids from General Electric (GE)
and others to supply it with two large transformers. The bids were supposed to be irrevocable for
90 days. GE, along with others, submitted bids. Pursuant to GE’s proposal, its bid would “remain
valid for 90 days.” Upon the expiration of the 90 days, Con Edison requested that GE and the
other bidders extend the irrevocability of their bids until December 31. By signed letter dated
September 22, GE extended the irrevocability of its bid until November 3. Two days later, GE
sent a second letter extending the irrevocability of its bid to December 31, but with an increased
price. On October 29, Con Edison sent a counteroffer to GE, but GE rejected it. Con Edison then
accepted GE’s first bid on the original terms. However, GE notified Con Edison that it was unable
to fulfill the order. Con Edison had to accept another bid at a higher price and then sued GE for
breach of contract. What result? See Consolidated Edison Co. v. General Electric Co., 555
N.Y.S.2d 355 (N.Y. App. Div. 1990).

81. Released in theaters in 2006, the movie Borat tells the story of a fictional Kazakh television
personality, Borat, sent to the United States to report on American culture. Michael Psenicska was
contacted by Todd Schulman, a producer, who informed him that they were producing a
documentary about the integration of foreign people into the American way of life. Psenicska was
interested in participating in the movie. On the day of filming, Pseniscska was asked to sign and
did sign a document, entitled the Standard Consent Agreement, without reading it. The agreement
set forth Psenicska’s consent to appear in a documentary-style film intended to reach a young adult
audience. The agreement also stated that “the Participant acknowledges that in entering into [the
Agreement], the Participant is not relying upon any promises or statements made by anyone about
the nature of the Film … .” Psenicska was then shown to a driver education car and told to follow
a production van through the driving course with Sacha Baron Cohen as the Borat character driving
irresponsibly and erratically while engaging in conversations with strangers and making
derogatory and offensive racial and sexual remarks. When the movie was released, Psenicska
discovered that it was a comedy rather than a documentary. He sued Schulman and Cohen,
claiming that he was “tricked” into agreeing to appear in the film and into making a fool of himself
by Schulman’s misrepresentation that the movie was a documentary rather than a comedy. What
result? See Psenicska v. Twentieth Century Fox Film Corp., 409 Fed. Appx. 368 (2d Cir. 2009).

82. Marguerite Eaton and her friend, Bobby Joe Waldrup, moved into a mobile home on land
owned by Marguerite’s son, James Eaton. Bobby Joe asked James to transfer the portion of the
land where the mobile home was located to him and Marguerite, stating falsely that he and
Marguerite had married. James agreed and did so. Soon afterward, Marguerite transferred her
one-half interest in the land to Bobby Joe. When James learned of this transfer and that he mother
and Bobby Joe were not married, he filed suit against Bobby Joe seeking rescission on the basis
of fraud. James asserted that he never would have executed the deed transferring the property
jointly to Marguerite and Bobby Joe if he had known the truth. Bobby Joe argued that James had
not proved intent to deceive. What result? See Eaton v. Waldrup, 45 So.3d 371 (Ala. Ct. App.
2010).

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83. Toby Breedlove bought a house financed by a loan from CitiMortgage, Inc. After falling
behind in his payments and hoping to avoid foreclosure, Breedlove sought to sell the house to
Patterson in a short sale. Patterson and CitiMortgage negotiated over a price. Patterson offered
$371,000, which was rejected. He then offered $412,000, which CitiMortgage also rejected.
Finally, he offered $444,000. In response, CitiMortgage sent Patterson a letter that stated that it
would accept a payoff of $113,968.45. However, this was not what CitiMortgage meant to
communicate since that amount was much lower than the amounts that the parties had been
discussing. Nevertheless, Patterson immediately agreed. On the date of the closing, CitiMortgage
received the payment of $113,968.45 and at that point realized that there had been a clerical error.
It contacted the closing attorney and stated that it was rejecting and returning the funds.
CitiMortgage then contacted Patterson and informed him that it had meant to accept the $444,000
offer instead. Patterson demanded that CitiMortgage accept the $113,968.45 as agreed since that
had been the amount stated in CitiMortgage’s letter. Patterson sued to enforce the sale of the house
and CitiMortgage sought to rescind the contract on the basis of unilateral mistake. What result?
See Patterson v. CitiMortgage, Inc., 2016 WL 1696606 (11th Cir. 2016).

84. While working as a contractor doing residential and commercial remodeling, Dan Donovan
maintained an “open” charge account with Aldrich & Co., a building supplies retailer. Aldrich
sold supplies to Donovan on credit, but the amount owed by Donovan grew steadily. Finally,
Aldrich refused to sell any more supplies to Donovan unless he signed a promissory note agreeing
to pay the amount due. Although he did not want to do so, Donovan signed the note because he
had no money and needed more supplies. When Aldrich sued to enforce the note and collect the
amount owed, Donovan argued that the agreement had been obtained by economic duress because
Aldrich would not extend him further credit unless he signed the note. Is this correct? See Aldrich
& Co. v. Donovan, 778 P.2d 397 (Mont. 1989).

85. Totem Marine Tug & Barge, Inc. (Totem) and Alyeska Pipeline Service Co. (Aleyeska)
entered into a contract by which Alyeska agreed to transport construction materials from Houston,
Texas to Alaska via the Panama Canal. Because of unforeseen delays, Alyeska terminated the
contract and took possession of the materials at Long Beach, California. Totem then submitted a
bill of approximately $300,000 for its services to Alyeska. The bill remained unpaid for almost
two months during which Totem faced bankruptcy because it lacked cash to pay its creditors.
Knowing this, Alyeska offered to settle the bill for $97,500 if Totem would sign an agreement
releasing Alyeska from all claims by Totem. Totem accepted the offer, but later sued Alyeska for
the unpaid balance of the bill. Totem also requested rescission of the release agreement on the
grounds that it had been forced to sign it under duress. What result? See Totem Marine Tug &
Barge, Inc. v. Alyeska Pipeline Service Co., 584 P.2d 15 (Alaska 1978).

86. John and Jennifer Margeson entered into an asset purchase agreement to sell a weight loss
company to Artis. The original contract called for Artis to pay $125,000, payable at the closing.
Six days later, the parties signed a second document called a “sales agreement addendum,” which
set the sale price at $155,000, with $135,000 payable at the closing and the remainder in
installments. At the closing, Artis paid the $135,000, using personal checks for $10,000 of that.
The parties later had a disagreement and Artis stopped payment on one of her checks and stopped
making installment payments. The Margesons sued Artis for breach of contract. Were the

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promises contained in the sales agreement addendum (a modification of the contract) enforceable?
See Margeson v. Artis, 776 N.W.2d 652 (Iowa 2009).

87. In 2005, writers at Forest Park Pictures formulated a concept for a television show called
“Housecall,” in which a doctor, after being expelled from the medical community for treating
patients who could not pay, moved to Malibu, California, and became a “concierge” doctor to the
rich and famous. Forest Park created a written series treatment for the idea, including character
biographies, themes, and storylines. It mailed this written material to Alex Sepiol, who worked
for the USA Network and requested a meeting between Sepiol and its representatives. Sepiol
scheduled a meeting for the purpose of hearing Forest Park pitch its show. It is standard in the
entertainment industry for ideas to be pitched with the expectation of compensation in the event
of their use. At the meeting, Sepiol understood that the Forest Park writers were pitching those
ideas with the object of persuading USA Network to purchase those ideas for commercial
development. Sepiol admitted that before hearing the idea for “Housecall,” he had never heard of
“concierge” doctors, or doctors who make house calls for wealthy patients, and “thought it was a
fascinating concept for a television show.” During the following week, Sepiol and Forest Park
exchanged further communications; however, discussions soon ended and no further contact
between the parties ensued. Less than four years later, however, USA Network produced and aired
a television show called “Royal Pains,” in which a doctor, after being expelled from the medical
community for treating patients who could not pay, became a concierge doctor to the rich and
famous in the Hamptons. Forest Park did not consent to this production, and received no
compensation from USA Network for the use of its idea for the show. Does Forest Park have a
claim against USA Network for using its idea without paying for it? See Forest Park Pictures v.
Universal Television Network, Inc., 683 F.3d 424 (2d Cir. 2011).

88. In 1992, White and J.M. Brown Amusement Co. entered into a contract giving Brown
exclusive rights to place “certain coin-operated amusement machines” in thirteen of White’s
stores, all located in Anderson and Oconee counties. The contract was for a term of fifteen years.
Under the contract, White agreed “not to allow other machines on the premises without the express
written consent of [Brown].” As a result of local referenda held in November 1994, Anderson and
Oconee counties voted to ban cash payouts. The South Carolina Department of Revenue revoked
the licenses required to operate the machines Brown had placed in White’s stores, effective July
1, 1995, as required by the Act. Consequently, Brown removed the video poker machines from
White’s stores. Brown did not replace the machines with any other coin-operated amusement
machines. Did Brown breach the contract with White? See White v. J.M. Brown Amusement Co.,
Inc., 601 S.E.2d 342 (S.C. 2004).

89. R.L. and Leta Warren hired H.G. Denison, a building contractor, to build a house on their
property. They executed a written contract in which the Warrens agreed to pay $73,400 for the
construction. Denison’s construction unintentionally deviated somewhat from the specifications
for the project, and the cost of repairing them was $1,961.50. The finished house had a market
value higher than it would have been without the deviations. The Warrens failed to pay the
$48,400 balance due under the contract, alleging that Denison’s work in constructing the house
was not performed in a good workmanlike manner, and therefore they were under no further
obligation to perform their duties under the contract. Is this correct? What standard of

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performance applies to construction contracts? See Warren v. Denison, 563 S.W.2d 299 (Tex. Ct.
App. 1978).

90. Seaboard Lumber contracted with the U.S. Forest Service to cut, remove, and pay for the
timber on Forest Service land for two and a half years at a fixed price. Between the time the
contract was made and the final performance date, timber prices dropped significantly because of
a decline in housing construction due to a rise in interest rates, and Seaboard decided not to cut the
lumber. When the Forest Service sued for breach of contract, Seaboard defended on the basis of
impossibility and commercial impracticability. What result? See Seaboard Lumber Co. v. United
States, 308 F.3d 1283 (Fed. Cir. 2002).

91. Schweber contracted to purchase a certain black Rolls-Royce Corniche automobile from
Rallye Motors. He made a $3,500 deposit on the car. Rallye later returned his deposit to him and
told him that the car was no longer available. However, Schweber learned that the car had been
made available to a dealer and was being sold to another buyer. The dealer then offered to sell
Schweber a similar car, but with a different interior design. Schweber brought an action for
specific performance to prevent sale of the Rolls-Royce Corniche to anyone else and to require
that it be sold to him. At the time, approximately 100 Rolls-Royce Corniches were being sold
each year in the United States, but none of the others had the particular features and detailing of
this one. Is the remedy of specific performance available to Schweber? See Schweber v. Rallye
Motors, Inc., 12 UCC Rep. 1154 (N.Y. Sup. Ct. 1973).

92. In June 2005, Delta Star, Inc. agreed to sell Rochester Gas & Electric Corporation eight
electrical transformers. The agreement provided that “prices stated on the face of the Purchase
Order shall be considered firm, unless otherwise notes, and Delta Star warrants that said prices do
not exceed the prices allowed by [law].” During the fall of 2005, the demand for the type of steel
used in the transformers outstripped the supply as buyers in China and India began paying a
premium over other markets for such steel. On December 21, 2005, Delta Star sent a letter to
Rochester stating that it anticipated the per unit increase in price for the transformers to be $67,183
for a total increase of $537,464. Rochester demanded that Delta Star reaffirm its obligation to
deliver the transformers for the price specified in the contract. When Delta Star did not do so,
Rochester notified Delta Star that it considered this to be a repudiation of their agreement and sued
Delta Star for breach of contract. Although the steel it needed was still available, though at the
much higher price, Delta Star sought to be excused from performance of the contract due to
commercial impracticability. What result? See Rochester Gas & Electric Corp. v. Delta Star,
Inc., 68 UCC Rep.2d 130 (W.D.N.Y. 2009).

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