Restatement of Contracts
1) Della and Perry #1- Discuss whether Della and Perry had the “capacity” to enter into a contract and why is it important?

2) Discuss whether the law, summarized in the Restatement of Contracts, can help Della and Perry disaffirm the contract. Does it make any difference that Amanda said, “It’s “settled!”

3) When Chelsea, age 17, gets her first paycheck from her first part time job, she runs out shopping and spends it all purchasing the following items:

a) Earrings

b) Tickets to a concert

c) Athletic shoes required for gym class (which is required for graduation from H.S.)

d) Medication recommended by her dermatologist for acne

e) A downpayment on a used car!

When her mother finds out, she insists that take back everything and get a refund because Chelsea is going to need to save every penny she earns for college. What items can she disaffirm because of her age? Does it make any difference if the items have been used, or if she waits a month before she tries to return them

4) What if she keeps the car until she is 18, and makes monthly payments, then what needs to be done to ratify the contract? Under what circumstances would Chelsea’s mother be liable for the car contract?

5) Randy has an 85 year old grandmother, Edna, who has had Alzheimer’s disease for about 10 years, and her memory and health has progressively deteriorated. Edna is still living at home, and surviving on her own, with the assistance of a home health aide, and with Randy’s help who takes care of all her finances through his power of attorney. When Edna receives threatening debt collection letters for purchases made with a credit card that she has no recollection of ever using, what defenses can Randy use to argue that the credit card contract is unenforceable and the purchases are voidable?

6) Identify which of the following contracts are unenforceable, and identify the public policy reasons why.

a) A two week loan of $200 with an interest rate of 365% APR

b) The purchase of a slot machine for gambling at a neighborhood bar.

c) A contract to install a new roof with a contractor who is not licensed as a home improvement contractor in the city where the work is to be done.

d) An offer to sell a baby crib that has been recalled by the Consumer Product Safety Commission as unsafe.

7) When Alex lands his dream job as a commissioned sales rep for a national company after graduating with a degree in Business Marketing, he is asked to sign a bunch of forms in the HR department to sign up for payroll, health benefits, etc, and is only given 15 minutes before he needs to run to his next step in the new orientation process. One of the forms he signs without reading is an employment contract with a covenant not to compete that prohibits him from working in any sales position anywhere in the Midwest for a period of 10 years, if he ever leaves this job, for any reason. When he is laid off a year later, he goes to work for a competitor and immediately gets threatened with a lawsuit for breaching his non-compete agreement. What defenses does Alex have to argue that the covenant should be unenforceable?

8) Rachel and Kevin decided to start a small business conducting children’s parties in a renovated school bus that are held in the driveway of the child’s home. Different activities are available for different party themes, but all include active play that could result in a child being injured, so they included an “exculpatory” clause in their contract requiring the parents to “waive any and all liability, regardless of fault or injury suffered”. Discuss whether this clause is enforceable and under what circumstances it would not be enforceable, leaving Rachel and Kevin at risk for a lawsuit.

9) Many businesses are now including an arbitration clause in their contracts to avoid going to court, if a dispute arises with their customers. If challenged, the customer must prove that the arbitration clause is both procedurally unconscionable and substantively unconscionable. Explain the difference and what steps the business should take before offering the contract to make sure their contract is not challenged.

10) If an arbitration clause is found unconscionable, what legal argument can be made to enforce the rest of the contract terms?
Answer all the question simply




Restatement of Contracts