Billy Bob and his drinking buddy, Jimmy Joe, had been drinking most of the day one Saturday. They were at Billy Bob’s house and Jimmy Joe ended up falling asleep in the late afternoon

QUESTION 1

1. Billy Bob and his drinking buddy, Jimmy Joe, had been drinking most of the day one Saturday.  They were at Billy Bob’s house and Jimmy Joe ended up falling asleep in the late afternoon and spent the night at Billy Bob’s house.  The next day, Sunday, the two woke up and found a piece of paper that said that Jimmy Joe agreed to buy Billy Bob’s house for $125,000, payable at $25,000 per year for five years.  The paper had the signatures of both men.  Jimmy Joe knew the house was worth at least twice that much and demanded Billy Bob sign a deed to his house.  When Billy Bob refused to do so, Jimmy Joe sued to enforce the agreement.  Billy Bob filed an answer alleging that there was no valid contract.  At trial both Billy Bob and Jimmy Joe testified they had no recollection of any conversation concerning the sale of the house.  How would you expect the court to rule on the question whether a contract to sell the house had been formed and what would be its reasoning for such a holding?  Include every basis for formation of a contract that might be relevant in this situation and decide whether the facts are such that a contract could have been formed.
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20 points   

QUESTION 2

1. Thomas, who is 17 years old, wanted to spend a vacation in Hawaii before his senior year in high school, so he signed a contract to buy a round trip ticket from Austin, promising to pay the full price plus interest upon graduating from high school the following year.  He used the ticket and enjoyed his trip immensely.  Shortly after his return to Austin he decided he did not want to pay for the ticket after all.  He comes to your office to find out what he should do to retract his agreement to the contract and how long would he have in which to do so.  How successful might he be if he takes the steps you have included in your response?  If the travel agency who contracted with Thomas decides to sue what are their chances for recovery and why.  Finally could the travel agency recover from Thomas’ parents, and, if so, under what theory of contract law?
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15 points   

QUESTION 3

1. In 2018, Jim loaned $10,000 to his business partner, Michael.  Michael died on March 30, 2019 without repaying the loan.  Jim mentioned this matter to Alex, Michael’s right-hand-man, and in response Alex said, “I promise to pay Michael’s debt of $10,000 if you will keep me on as an employee through the end of the year.”  Jim responded, “I accept” and the two men shook hands on the deal.  Alex paid Jim $10,000 the next week, but Jim fired Alex two months later.  Alex sues for breach of contract, but Jim claims there is no enforceable contract, because there was no written agreement.  Is Jim correct?  Why or why not?
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15 points   

QUESTION 4

1.  Janice and Sally were social acquaintances and had known each other for about three years.  They had never had any direct financial dealings before now. Janice had accepted a new job opportunity in Austin and discovered that Sally owned some land there and Janice became interested in buying it.   While sitting in Sally’s law office in Oklahoma City negotiating the sale of Sally’s vacant land in Austin, Sally mentioned that as far as she knew the land was suitable for the various uses.  She also said there were no restrictions, legal or otherwise, which would prevent the construction of an office building on that land.  Janice ultimately purchased the tract.   Shortly after moving to Austin, Janice had an opportunity to sell the tract for a profit of $50,000.  However, during negotiations for that sale, the prospective purchaser discovered that the land was within an area zoned for single family residential use only.  It was also discovered that due to certain geological subsurface conditions, no building of any kind could be built on the property.  At this point, Janice decided to sue Sally, seeking all possible remedies, claiming reliance on Sally’s representations. 

After hiring your office to represent Janice, it was learned that Sally, will testify that she was licensed to practice law only in the state of Oklahoma and had no special knowledge of Texas law, much less knowledge of Austin’s city ordinances.  She will also testify that she had never been to Austin and never had any occasion to learn anything about any conditions that might prohibit construction of any kind.  You are asked to take all of the above into account and identify and analyze what grounds Janice might have to successfully maintain her suit against Sally.  You are also asked to determine what defenses Sally would have to avoid liability and how successful these defenses might be.  Also consider, if she is successful, what remedies would be available to Janice depending on what she would be able to prove.

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20 points   

QUESTION 5

1. Randy, a first-class chef, was employed by La-De-Da Hotels, Inc, an international hotel chain, to be its head chef at the hotel’s four star restaurant in Austin, for a period of one year, beginning on the first day of the month following the date of the agreement.   The agreement also provided that, in the event Randy left the hotel’s employment for any reason, Randy would not accept employment at any other restaurant in Texas or in any of the states that share a border with Texas, for ten years following the date of termination of such employment.  Within a very short time Randy developed several unique dishes which brought substantial success to the Hotel and to his own reputation as a chef.



Eight months later, Randy decided to leave and develop a new line of food trucks featuring his signature dishes.  He moved to Santa Fe, New Mexico and set up operations there.  When the hotel learned of this, it sued Randy under the covenant not to compete.  Randy hires your office to defend him in this suit and you are asked to prepare a memorandum setting out the issues that might apply to this situation and discuss how each might affect La-De-Da’s likelihood of enforcing the covenant not to compete.

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15 points   

QUESTION 6

1. James owed Ralph $2,500 which became due on March 1, 2020.  Ralph owed Charles $2,500 which became due about the same time.  To satisfy his obligation to Charles, on January 31, 2020, Ralph assigned Charles his right to the money owed to him by James. It seems that Ralph also owed David $2,500 and, to satisfy that obligation, on February 15, 2020, Ralph assigned his right to the money James owed him to David.  On February 29, 2020, David notified James that he, David, was entitled to receive payment from James.  On March 3, 2020, James hired your office to advise him whom he should pay.  In turn you are asked to supply your opinion as to the answer to that question based on the laws of your state.  You determine from your research that this question has never been decided in your state and you must provide an answer based on the alternatives the court would consider when this issue is presented.
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15 points   

QUESTION 7

1. All rights under a contract may be transferred to another, unless

2 points (Extra Credit)   

QUESTION 8

1. Orchid and Peony entered into a contract for the sale of Orchid's textbook for which Peony agreed to pay Orchid $75 at the end of the semester. Orchid wants to transfer her right to payment for the book to Rose.  This transfer

2 points (Extra Credit)   

QUESTION 9

1. Would your answer to the proceeding question about Orchid's assignment to Rose be any different if the agreement between Orchid and Peony had contained an anti-assignment  clause?   Explain your answer.