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Contracts

Exam 33
30 minutes

Fact Pattern

A seller and a buyer both collect antique dolls as a hobby. Both live in the same small city and are avid readers of magazines about antique dolls. The seller placed an advertisement in an antique doll magazine seeking to sell for $12,000 an antique doll manufactured in 1820.

On May 1, the buyer saw the advertisement and telephoned the seller to discuss buying the doll. During this conversation, the seller and the buyer agreed to a sale of the doll to the buyer for $12,000 and also agreed that the seller would deliver the doll to the buyer’s house on May 4, at which time the buyer would pay the purchase price.

The next day, May 2, the buyer changed his mind and decided not to buy the doll. He signed and mailed a letter to the seller, which stated in relevant part:

I have decided not to buy the 1820 doll that we agreed yesterday you would sell to me. 

The seller received the letter on May 3, immediately telephoned the buyer, and said, “I consider your letter of May 2 to be the final end to our deal. I will sell the doll to someone else and will hold you responsible for any loss.”

On May 4, the seller received a telephone call from another antique doll collector. The collector had seen the seller’s advertisement for the doll and expressed interest in buying it. After some discussion, the seller and the collector agreed to a sale of the doll to the collector for $11,000. Because the collector lived in a distant part of the state, the agreement provided that the seller, at her expense, would arrange for delivery of the doll by an express delivery service. The express delivery service that they selected charges $150 for deliveries of this type. The sale, the method of delivery, and the fee were all commercially reasonable. The seller acted in good faith in entering into this agreement with the collector.

On May 5, the buyer telephoned the seller and said, “I made a mistake when I sent the letter, and I will buy the doll from you on the terms we agreed to. Come to my house tomorrow—I’ll have the $12,000 for you.” The seller replied, “You’re too late. I’ve already sold the doll to someone else.” The seller then took the doll to the delivery service and paid the $150 delivery fee. The delivery service delivered the doll to the collector, who immediately wired the $11,000 payment to the seller. Two weeks later, the seller sued the buyer for breach of contract.


Questions

  1. 1. Is there a contract for the sale of the doll that is enforceable against the buyer? Explain.

    2. Assuming that there is a contract enforceable against the buyer, did the buyer breach that contract? Explain.

    3. Assuming  that  there  is  a  contract  enforceable  against  the  buyer  and  that  the  buyer breached that contract, how much can the seller recover in damages? Explain.

Question 1

1. Is there a contract for the sale of the doll that is enforceable against the buyer? Explain.

2. Assuming that there is a contract enforceable against the buyer, did the buyer breach that contract? Explain.

3. Assuming  that  there  is  a  contract  enforceable  against  the  buyer  and  that  the  buyer breached that contract, how much can the seller recover in damages? Explain.

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