CONTRACT SHOWDOWN - PARTIES and AGREEMENT

Jamie, age 17, signs a one-year lease for a small apartment in Boulder. After two months, she decides she doesn't want to live there and stops paying rent.

• The contract is invalid because she is a minor.
• The contract is valid to the extent of the reasonable value of housing because it's a necessary.

• The contract is automatically void when signed by a minor.
• The landlord can sue her parents for the unpaid rent.

Answer explanation

Housing is a 'necessary,' so even minors can be held liable for its reasonable value.

Sara promises to sell her horse to Alex for $2,000. Unknown to both, the horse had died the night before the contract was signed.

• Either party can rescind the contract because there was a mutual mistake as to a basic assumption.

• The contract is valid and enforceable.
• The injured party cannot rescind the contract because mistakes are never grounds to void a contract.
• The contract is automatically converted into a service contract.

Answer explanation

A mutual mistake about the existence of the subject matter makes the contract voidable.

A tech company offers to hire Ben to design a website for $5,000. Ben replies: 'I accept only if you include three months of free maintenance.'

• The contract is valid and enforceable as stated.
• The contract is invalid because Ben's reply is a conditional acceptance, making it a counteroffer.

• The injured party can rescind the contract.
• This is a unilateral contract.

Answer explanation

A conditional acceptance is treated as a counteroffer under the mirror image rule.

A business owner tells a buyer: 'This car has never been in an accident,' based on what the previous owner told him. Both genuinely believe it's true. The buyer later discovers the car was in an accident.

• The injured party cannot rescind the contract.
• The contract is invalid because of fraud.
• The buyer can rescind the contract because of innocent misrepresentation.

• The buyer must prove negligence to rescind.

Answer explanation

An innocent misrepresentation allows rescission if the false statement induced the contract.

Maya is intoxicated when she signs a contract to sell her valuable art collection. She sobers up the next day and realizes what she did.

• The contract is valid and enforceable no matter what.
• The injured party cannot rescind the contract.
• The contract is automatically void without proof.
• Maya can rescind the contract if she can prove she lacked capacity due to intoxication.

Answer explanation

If intoxication prevents understanding of the contract, it can be voidable upon proof.

Chris offers to sell his laptop for $500. Dana replies, 'I accept. Can you throw in the carrying case too?'

• The contract is valid and enforceable for the laptop; the carrying case is a separate proposal.
• The party can rescind the contract.
• The contract is invalid because the acceptance added a term.
• This creates a unilateral contract.

Answer explanation

A request, without making acceptance conditional, does not prevent contract formation.

A landlord promises a tenant to repair the roof. The landlord sells the building to a buyer who becomes the new landlord. The roof leaks. The tenant sues the old landlord.

• The contract is valid and enforceable against the old landlord.
• The party can rescind the contract because of mutual mistake.
• The contract is invalid against the old landlord because of lack of privity.
• The tenant automatically becomes an assignee.

Answer explanation

Only parties in privity can enforce a contract unless an exception applies.

A homeowner signs a contract under threat that if they don't, their store will be vandalized.

• This is a mutual mistake.
• The contract is valid and enforceable.
• The injured party cannot rescind the contract.
• The party can rescind the contract because it was signed under duress.

Answer explanation

Duress invalidates genuine consent, making the contract voidable.

A store advertises: 'Reward: $500 to anyone who returns my lost dog.' Kim finds the dog and returns it, unaware of the reward.

• The contract is valid and enforceable.
• The party can rescind the contract because of mistake.
• The contract is invalid because Kim didn't know about the offer when performing.

• This is a bilateral contract.

Answer explanation

A unilateral contract requires knowledge of the offer before performance.

Two roommates agree to buy a custom painting for $1,000. The contract says they are 'jointly and severally liable.' One refuses to pay.

• The contract is valid and enforceable against either roommate for the full $1,000.
• The contract is invalid because of mutual mistake.
• Each roommate owes only $500.
• The injured party cannot enforce the contract.

Answer explanation

Joint and several liability allows recovery from any one of the bound parties.