Is hill liable to cross for damages


PART I:

Love leaves her job as manager of a local restaurant because she wants to start her own restaurant. She finds an ideal location to lease on West Lake Street in the Uptown Area of Minneapolis. All she needs is the initial start up capital to make leasehold improvements, buy the initial inventory of food and beverages, and pay the first few months rent and payroll. Her friend Filho is willing to contribute $100,000, but wants to help make the day to day decisions in the restaurant in order to protect her investment. Another friend, Wittman, has $300,000 to invest, but is not interested in the day to day control of the business (although she wants to participate in major decisions). Neither Filho nor Wittman want to actually work in the restaurant.

Question 1. Describe the entity that Love, Filho and Wittman should use for their new business and explain why you chose such entity.

Question 2. Describe how the day to day decisions and major decisions will be made so as to protect the interests of all the parties.

Question 3. What ownership and voting percentage should be assigned to each of the three parties? Why?

Question 4. Describe an exit strategy which will benefit Love. Would Wittman want a different strategy? Why?

PART II:

Butler is a recently retired real estate broker. Butler hires Hill, his former assistant, to draft agreements and to handle other duties for him in his new business of buying, operating and selling residential rental properties.

Normally Butler asks Hill to use standard form purchase agreements and leases, which the two of them had used when they worked for their former employer. Butler usually tells Hill the terms and numbers to fill in the blanks of the standard form agreements.

Butler goes on vacation on June 1, 2010. He asks Hill to negotiate and sign on his (Butler's) behalf a purchase agreement for the purchase of a duplex (two unit residential building referred to as the Duplex), which Butler learns is offered for sale by Cross. Butler instructs Hill to use a standard form purchase agreement to make an offer to Cross, but with a purchase price of no more than $600,000 for the Duplex.

Hill sends a letter to Cross on June 6, 2010, in which Hill advises Cross that he is acting on behalf of Butler with express authority and Hill encloses a standard form purchase agreement with a purchase price of $530,000 inserted. Cross replies by letter on June 9, 2010, in which he makes a counter-offer to sell the Duplex for $750,000. Hill receives the counter-offer from Cross on June 12, 2010. On June 14, 2010 Hill sends Cross a letter rejecting Crossâ?? counter-offer and enclosing a new standard form purchase agreement signed by Hill as agent of Butler. The new purchase agreement calls for a purchase price of $650,000 for the Duplex. In his June 14 letter Hill sets the date of June 30, 2010 as the final date by which Cross may accept Hill's final offer on behalf of Butler to purchase the Duplex for $650,000. Cross receives Hill's final offer on June 16, 2010.

On June 30, 2010 Cross signs the purchase agreement he received from Hill as Hillâ??s final offer and mails the fully signed purchase agreement in front of two witnesses at the local post office at 4:00 PM on June 30, 2010.

In the meantime Butler returns from his vacation on July 1, 2010. He is furious when he finds that Hill had offered to on Butler's behalf to purchase the Duplex for $650,000. Butler immediately calls Cross on July 1, 2010 to advise Cross that Hill did not have authority to offer Cross more than $600,000 for the Duplex. Cross advises Butler that the fully signed purchase agreement with Crossâ?? letter of acceptance was mailed in front of two witnesses the day before, so Cross has a binding contract. Butler refuses to buy the Duplex. Cross sues Butler and Hill for breach of contract.

Question 1) Was Cross acceptance effective within the June 30 time limit set by Hill? Why?

Question 2) Is Hill liable to Cross for damages? Why?

Question 3) Is Butler bound by Hill's final offer of $650,000? Why?

Question 4) Assume all of the facts in this Part II, but Hill does not advise Cross that he is acting as agent on behalf of Butler. (a) Does Hill have any liability to Cross if there is a binding contract? Why? (b) Does Butler have any liability to Cross if there is a binding contract? Why?

Question 5) List the three essential elements of a contract and describe if each element is present or not present in the facts described in this Part II.

PART III:

Willis takes her car to Page's Detail Shop (Page) to have the car painted and a new radio installed in the car. The total estimate given to Willis for the job is $1,700.00. There is no break down of the total estimate. Willis tells Page that she wants to make sure the radio will receive her favorite classical music stations, and Page responds she is installing a 'top of the line' radio.

A week later Willis picks up her car, and she pays Page $1,700.00. Willis has trouble receiving her favorite classical music stations and within a month the paint begins to peel. Page files a claim against Willis in small claims court.

Question 1) Is the transaction between Page and Willis covered by the Uniform Commercial Code? Why?

Question 2) Assume the transaction is covered by the Uniform Commercial Code. (a) Will Willis be able recover damages from Page for breach of the implied warranty for fitness for a particular purpose? Why? (b) Will Willis be able to recover damages from Page for the breach of the implied warranty of merchantability? Why?

Question 3) If Page is liable for damages to Willis, describe the damages to which Willis is entitled?

PART IV: DEFINE AND COMPARE THE FOLLOWING TERMS:

Question 1. Patent and copyright.

Question 2. Generic trademark and fanciful trademark.

Question 3. Trade secret and trade dress.

Question 4. Fraud and misrepresentation in contracts.

Question 5. Rejection by counter-offer under common law and rejection by counter-offer under the Uniform Commercial Code (the U.C.C.).

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