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Choose one of the following cases, then analyze the cases in the Questions and Problems.
Case A: Chapter 17 (6 and 7) in Dynamic Business Law
Case B: Chapter 17 (8 and 9) in Dynamic Business Law
For each assigned case, write an analysis of the issue based on the following criteria:
Identify the parties involved in the case dispute (who is the plaintiff and who is the defendant).
Identify the facts associated with the case and fact patterns.
Develop the appropriate legal issue(s) in question (i.e., the specific legal issue between the two parties). Provide a judgment on who should win the case – be clear.
Support your decision with an appropriate rule of law.
400
representatives that she was no judge of fine art and
that they would have to hire an additional appraiser
if she found any fine art. She did not report finding
any fine art, and relying on her silence, the repre-
sentatives priced and sold two oil paintings at $60.
The defendant came to the estate sale and bought
the paintings. Although he had bought and sold
some art before, he was not an educated purchaser
and had made no more than $55 on any art that he
had previously sold; he had bought many paintings
that ended up being forgeries. He assumed that the
paintings were not originals, given their price and
the fact that professionals were managing the sale,
but he liked the subject matter of one and the frame
court ruled, and why? [Estate of Martha Nelson v
Carl Rice and Anne Rice, 12 P.3d 238, 2000 LEXIS
APP 159 (2000).]
7. Audrey Vokes was a 51-year-old widow who
wanted to become an “accomplished dancer.”
She was invited to attend a “dance party” at J. P.
Davenports’ School of Dancing, an Arthur Murray
franchise. She subsequently signed up for dance
classes, at which she received elaborate praise.
Her instructor initially sold her eight half-hour
dance lessons for $14.50 each, to be used one each
month. Eventually, after being continually told that
she had excellent potential and that she was devel-
oping into a beautiful dancer-when, in fact, she
Part 2 Contracts
was not developing her dance ability and had no
aptitude for dance-she ended up purchasing a
total of 2,302 hours’ worth of dance lessons for a
total of $31,090.45. When it finally became clear to
Vokes that she was not developing her dance skills,
in part because she had trouble even hearing the
musical beat, she sued Arthur Murray. What would
be the basis of her argument? Her case was initially
dismissed by the trial court. What do you think the
result of her appeal was? [Okes v. Arthur Murray,
212 So. 2d 906 (1968).]
8. Arnold Olson and his now-deceased spouse deeded
their property to their six children in perpetuity
until they die. During a subsequent conversation
with his son and daughter-in-law, in the presence
of two other children, Olson granted his son part
of that property, which included the home and sev-
eral buildings, as long as they did not sell it while
he was alive, because he wanted to live in a trailer
on the property. He then executed a second deed
conveying the property but failed to include the life
estate in this second deed.
The father lived in his trailer on the property for
four years. Then the son told him he would have to
move because they were selling the property. Olson
and his other children sued to have the contract
reformed on the grounds of mistake. The trial court
agreed and reformed the contract to include the
provision for the father’s life estate. Why do you
think the appellate court either affirmed or reversed
the lower court’s decision? [Olson v. Olson, 1998
WL 170111.]
9. The Winklers were interested in purchasing a
home in the Valleyview Farms housing develop-
ment. They contacted the developer, Galehouse,
and selected a lot that cost $57,000. They asked the
developer to show them plans for houses for which
the construction costs would range from $180,000
to $190,000, indicating this was the price they
would be willing to spend for construction only
and wasn’t to include the lot price. The developer
gave them several books and plans to look at.
After the Winklers had several conversations
with Galehouse, the developer drafted plans for a
2.261-square-foot house and gave the Winklers a
quote of $198,000 for construction. The lot price
was not included. After several months of adding
options and upgrades to the plan, the cost rose to
$242,000, excluding the lot. The parties then engaged
10.
in a couple of weeks of negotiations regarding the
price of the construction and lot. Eventually they
reached a compromise price of $291,000 ($243,000
for the construction and $48,000 for the lot).
Galehouse prepared a written contract to reflect
the parties’ agreement, but the developer forgot to
include the lot price. The Winklers paid Galehouse
$48,000, the lot price, as a deposit on the contract.
When the construction was completed, and the
Winklers were finalizing their loan from the bank.
the parties discovered the drafting error. Galehouse
sued to have the contract reformed to reflect the
agreed-on price. Should the contract be reformed?
Why or why not? [Galehouse v. Winkler, 1998 WL
312527.]
Plaintiff Stirlen was the chief financial officer for
Supercuts. On numerous occasions he informed
Lipson, to whom he reported directly, and other
corporate officers of various operating problems he
felt contributed to the general decline in Supercuts”
retail profits and of “accounting irregularities” he
feared might be in violation of state and federal
statutes and regulations. After Stirlen brought his
concerns to the company’s auditor, Lipson alleg-
edly reprimanded him, accused him of being a
“troublemaker,” and told him that if he did not
reverse his position on the issues taken to the audi-
tor he would no longer be considered a “member
of the team.” Stirlen was terminated the follow-
ing month and subsequently filed suit for wrong-
ful discharge. Supercuts’ general counsel moved to
compel arbitration under the compulsory arbitra-
tion provision of the employment contract between
the parties.
The contract provided that all claims arising
from an individual’s employment, including civil
rights actions and tort claims, must be submitted to
arbitration within one year of the date on which the
dispute arose or the employee waived his right to
pursue the claim. Damages that could be awarded
through arbitration were limited to “a money award
not to exceed the amount of actual damages for
breach of contract, less any proper offset for miti-
gation of such damages, and the parties shall not
be entitled to any other remedy at law or in equity.
including but not limited to other money damages,
punitive damages, specific performance, and/or
injunctive relief.” In the event that an employee
did submit a dispute to arbitration, the employee’sQuestions & Problems
1. Explain the difference between a unilateral mistake
and a mutual mistake.
2. Explain when a unilateral mistake can lead to a
contract’s being voidable.
3. Distinguish innocent misrepresentation from fraud-
ulent misrepresentation.
4. Explain how nondisclosure can be treated as
misrepresentation.
5. Explain the primary differences between duress
and undue influence.
6. The personal representatives of the plaintiff’s estate
hired an appraiser to appraise personal property in
preparation for an estate sale. The appraiser told the
representatives that she was no judge of fine art and
that they would have to hire an additional appraiser
if she found any fine art. She did not report finding
any fine art, and relying on her silence, the repre-
sentatives priced and sold two oil paintings at $60.
The defendant came to the estate sale and bought
the paintings. Although he had bought and sold
some art before, he was not an educated purchaser
and had made no more than $55 on any art that he
had previously sold; he had bought many paintings
that ended up being forgeries. He assumed that the
paintings were not originals, given their price and
the fact that professionals were managing the sale.
but he liked the subject matter of one and the frame
of the other. Once home with the paintings, he
compared their signatures to those in a book of
artists’ signatures and thought they looked like
those of Martin Johnson Head. As he had done
with other art, he sent photos of the paintings to
Christie’s in New York, which confirmed the signa-
tures and offered to auction the paintings for him.
The auction netted the defendant $911,000. After
finding out what had happened, the estate sued the
defendant buyer, alleging that the contract should
have been rescinded on grounds of mutual mistake
and unconscionability. The trial court granted sum-
mary judgment in favor of the defendant, and the
plaintiff appealed. How do you think the appellate
court ruled, and why? [Estate of Martha Nelson v.
Carl Rice and Anne Rice, 12 P.3d 238, 2000 LEXIS
APP 159 (2000).]
7. Audrey Vokes was a 51-year-old widow who
wanted to become an “accomplished dancer.”
She was invited to attend a “dance party” at J. P.
Davenports’ School of Dancing, an Arthur Murray
franchise. She subsequently signed up for dance
classes, at which she received elaborate praise.
Her instructor initially sold her eight half-hour
dance lessons for $14.50 each, to be used one each
month. Eventually, after being continually told that
she had excellent potential and that she was devel-
oping into a beautiful dancer-when, in fact, she
400
Part 2 Contracts
was not developing her dance ability and had no
aptitude for dance-she ended up purchasing a
total of 2,302 hours’ worth of dance lessons for a
total of $31,090.45. When it finally became clear to
Vokes that she was not developing her dance skills.
in part because she had trouble even hearing the
musical beat, she sued Arthur Murray. What would
be the basis of her argument? Her case was initially
dismissed by the trial court. What do you think the
result of her appeal was? [Okes v. Arthur Murray,
212 So. 2d 906 (1968).]
8. Arnold Olson and his now-deceased spouse deeded
their property to their six children in perpetuity
until they die. During a subsequent conversation
with his son and daughter-in-law, in the presence
of two other children, Olson granted his son part
of that property, which included the home and sev-
eral buildings, as long as they did not sell it while
he was alive, because he wanted to live in a trailer
on the property. He then executed a second deed
conveying the property but failed to include the life
estate in this second deed.
The father lived in his trailer on the property for
four years. Then the son told him he would have to
move because they were selling the property. Olson
and his other children sued to have the contract
reformed on the grounds of mistake. The trial court
agreed and reformed the contract to include the
provision for the father’s life estate. Why do you
think the appellate court either affirmed or reversed
the lower court’s decision? [Olson v. Olson, 1998
WL 170111.]
9. The Winklers were interested in purchasing a
in a couple of weeks of negotiations regarding the
price of the construction and lot. Eventually they
reached a compromise price of $291,000 ($243,000
for the construction and $48,000 for the lot).
Galehouse prepared a written contract to reflect
the parties’ agreement, but the developer forgot to
include the lot price. The Winklers paid Galehouse
$48,000, the lot price, as a deposit on the contract.
When the construction was completed, and the
Winklers were finalizing their loan from the bank,
the parties discovered the drafting error. Galehouse
sued to have the contract reformed to reflect the
agreed-on price. Should the contract be reformed?
Why or why not? [Galehouse v. Winkler, 1998 WL
312527.]
10. Plaintiff Stirlen was the chief financial officer for
Supercuts. On numerous occasions he informed
Lipson, to whom he reported directly, and other
corporate officers of various operating problems he
felt contributed to the general decline in Supercuts’
retail profits and of “accounting irregularities” he
feared might be in violation of state and federal
statutes and regulations. After Stirlen brought his
concerns to the company’s auditor, Lipson alleg-
edly reprimanded him, accused him of being a
“troublemaker,” and told him that if he did not
reverse his position on the issues taken to the audi-
tor he would no longer be considered a “member
of the team.” Stirlen was terminated the follow-
ing month and subsequently filed suit for wrong-
ful discharge. Supercuts’ general counsel moved to
compel arbitration under the compulsory arbitra-
tion provision of the employment contract between
