19. Zuckerman Furniture Company (“Zuckerman”) sold a number of household items t

Question

19. Zuckerman Furniture Company (“Zuckerman”) sold a number of household items to Ms. Williams on an installment plan. The sales contract had an “add on” ( aka “omnibus’’ )provision, under which all of Ms. Williams’ purchases were consolidated into a single debt, and that any payment would be credited equally, among all the items. The clause’s effect was that Ms. Williams would only own an item after she had paid for all of them. In case of default on any one item, Zuckerman had the right to repossess all of the items (even if Ms. Williams was tardy on just a single item).
Ms. Williams was more than 60 days late in paying for her television, so Zuckerman sued to recover all of the items. Ms. Williams contested the contract. What was her defense?
a) Fraud.
b) Negligent misrepresentation.
c) Mistake.
d) Undue influence.
e) Unconscionability.
f) Duress.

20. Another case against Zuckerman Furniture Company. This time Ms. Patterson defaulted on installment payments for a refrigerator bought from Zuckerman. Patterson claimed the price of the refrigerator was extremely unfair. However, she provided no other facts to support her claim. What defense will she use, and will she win?
a) Unconscionability, and she will lose.
b) Unconscionability, and she will win.
c) Duress, and she will win.
d) Duress, and she will lose.
e) Undue influence, and she will win.
f) Undue influence, and she will lose.

22.       Loral had a contract to make radar sets for the U.S. Navy. The sets had 40 component parts, of which Austin, a subcontractor, produced 23. When Loral received a second contract from the Navy, Austin bid on all 40 parts, threatening to stop delivery on all parts on the first contract if it did not receive (a) a 100% price increase for the remaining parts to be delivered on the first contract, and (b) the subcontract for all 40 parts of the second contract. After unsuccessfully checking with all the other subcontractors on its Navy approved list (they each said they could not produce the parts for the first contract to meet the Navy’s deadlines), Loral agreed to Austin’s demands so as to avoid breaching its contract with the Navy.

            Ultimately (after receiving the remainder of the parts from Austin for its first contract with the Navy), Loral refused to pay the 100% price increase for the remaining parts, and refused to subcontract any of the parts for the second contract to Austin. Now Austin is suing Loral for breach of contract.

            What is Loral’s best defense?
a)        Duress.
b)        Undue influence.
c)         Unconscionability.
d)        Fraud.
e)        Mistake.

23.       Both parties believed that the cow farmer A was buying from farmer B was barren. However, just before farmer B delivered the cow, he realized it was pregnant, and, thus, worth ten times as much as the contract price. Farmer B sued to rescind (cancel) the contract.

            What is Farmer B’s best theory to support his rescission claim?
a)        Fraud.
b)        Negligent misrepresentation.
c)         Undue influence.
d)        Duress.
e)        Mistake.

Explanation / Answer

19. Answer is (e) unconscionability. The Add on provision was written so that none of the furniture was considered to be purchased until all of it was paid for. so when the plaintiff defaulted and failed to make payments on the last item of furniture, the store tried to repossess all of the furniture sold , not that particular item.The contract could be considered unconscionable if it was procured due to gross ineuality of bargaining power.

20. Answer is (a) unconscionability and she will lose because there were no other facts to support that.

22.Answer is (a) duress.The contract is voidable on the grounds of duress when it is established that the party making the claim was forced to agree to it by means of a wrongful threat precluding the exercise of his free will.

23.Answer is (e) Mistake.Farmer B agreed to sell because cow was barren.But before delivery he realized cow was pregnant.The contract is void.

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