(Suggested Time: One Hour; One-Half of Total Exam Points)
Our client Jerry Dadd has asked us for our help in thinking through a problem about which he is deeply troubled. Since the problem involves his relationship with his son, he says it is probable that he will, in the end, be motivated more by personal factors than by legal rules. Nevertheless, he wants us to provide him with a legal analysis of his situation. Jerry Dadd told us the following story:
Jerry Dadd was a graduate of Bix University, a private university in the New England state of Green. He had been a devoted member of the University’s alumni association ever since his graduation at the age of 23. The twenty years since his graduation had been extraordinarily profitable. The Company he created in his senior year at College has prospered and he now is a millionaire many times over. He attributes his success to the education, encouragement and inspiration derived from his years at Bix. Jerry’s only disappointment in life is his son George who dropped out of Bix within days of starting there just after his graduation from high school. For the last four years George has spent most of his time travelling and, to his father’s way of thinking, has simply wasted this valuable time. Now, at the age of 22, George mentioned to his father last week that going to College might be a good idea. He told his father that he was applying to ABC University. Jerry was delighted to hear that George was considering returning to college, but unhappy that George was thinking about attending the school that was the traditional rival of Bix.
Jerry then said to George, “I want to make it financially possible for you to go to College, but I certainly hope that your choice will be Bix. I have set up a $1 million trust fund for College expenses for you.”
After this conversation, George enrolled in ABC and then asked his father for tuition and expense money. His father said, “I will pay the tuition and expenses for you at Bix, but not at ABC. “ George then said to his father that he had relied on his father’s promise to set up a $1 million dollar trust fund when he enrolled at ABC and that because of this promise his father should pay for his college education. His father then said, “Well, I’ll pay this year if you transfer to Bix next year.“ George agreed and his father paid the ABC tuition and expenses. After completing his first year at ABC, George decided not to transfer to Bix, even though George had been admitted by Bix as a transfer student. George believes that his father is still obligated to pay his college expenses despite his decision not to transfer to Bix.
Please analyze Jerry Dadd’s rights and liabilities to his son George. In doing so, it is important that you consider the legal arguments on both rights and liabilities which will be made by George’s lawyer. It will be useful for you to look at rights and liabilities at each stage of the events described above.
Question 2
(Suggested Time: One Hour; One-Half of Total Exam Points)
We represent the Made For You Company (MFYC) which operates retail stores which offer for sale both “off the rack” and custom-made clothing. MFYC has brought us a problem which requires immediate resolution. Our notes taken at an interview we conducted with the President of MFYC follow:
Bert Buyer is a man who likes to wear custom-made clothes and he is wealthy enough to afford the price of such clothes. On December 11, 2000, he went to MFYC and ordered one dozen shirts. Sales personnel at MFYC measured him to ensure a perfect fit. Mr. Buyer chose silk as the fabric to be used to make the shirts and he signed an agreement that he would pay $100 for each shirt. He ordered one dozen shirts. The total cost of the shirts was, therefore, to be $1200. Mr. Buyer and MFYC agreed that they were to deliver the shirts as they were completed and that all of the shirts had to be completed and delivered by December 22, 2000.
MFYC promptly ordered silk for the twelve shirts at a cost of $240 and cut the silk into twelve portions. MFYC then started to make the shirts, completing the first one and delivering it to Mr. Buyer on December 15. Mr. Buyer rejected the shirt, stating that he did not want it and did not want any of the other eleven shirts that he ordered.
In addition to sale of custom-made shirts, MFYC also sells shirts in their store that are not custom manufactured. They took the shirt that they had made for Mr. Buyer and sold it for $50, the price at which they sold non-custom manufactured silk shirts in their store. The cost of the labor to make the shirt was $40. Since the prorated cost of the silk for the shirts was $20, they suffered a $10 loss on the sale of the shirt.
The President of MFYC has approached our law firm with the following questions: what should they do about the fact that they now have 11 pieces of silk shirting material (not yet cut and sewn into shirts) which cost them, on a prorated basis, $220 ($240 less the $20 for the shirt they sewed and sold)? Should they sew the other 11 shirts and sell them in their store? Should they see if they can find a buyer for the 11 pieces of silk (they doubt they could get more than two dollars for each piece)? On the other hand, if they make the shirts, while they know their costs ($20 fabric and $40 labor), it is possible that by the time the shirts are made by the December 22, they will be too late for Christmas season purchases and that it is possible that they will not be able to sell them for more than $35 per shirt.
Please provide MFYC with your analysis of the possible remedies available to them against Mr. Buyer. Of course your analysis must take into account the choices now confronting MFYC - to make the shirts or not? The concern of MFYC about the absence of much of a market for silk shirts by the time they could complete the manufacture of the shirts may raise the possibility that the shirts could prove unsaleable for any reasonable price. Even though our client has not suggested that eventuality, we must take it into account in our analysis. For each recommendation that we might make to our client, please consider the arguments that Mr. Buyer’s lawyer will make in response to our demand for damages for Mr. Buyer’s breach of contract.
END OF EXAMINATION