Question One
(Suggested Time: One Hour; 50 points)
Two friends, Adam and Barbara, are in the same first year law school section. Adam was having some problems understanding Civil Procedure, but was otherwise pleased with his progress in law school. Barbara was also enjoying the law school experience, except for Contracts, which she found quite difficult. One evening after class, they met to review their class notes for the preceding week. In the course of that meeting, Adam suggested the following: Adam said that each Saturday morning he would tutor Barbara in Contracts and Barbara could tutor him in Civil Procedure. Barbara thought this was an excellent idea, although it required her to give up her normal Saturday job working as a waitress in a downtown restaurant.
For the next four Saturdays, Adam tutored Barbara in Contracts and Barbara tutored Adam in Civil Procedure. As far as Barbara knows, Adam was pleased with the help he was receiving from her in Civil Procedure. Certainly Barbara believed that her understanding of Contracts was improving. On the following Saturday, however, Adam told Barbara that he had accepted a job at the Law Library which would take up all his time on the weekends and that he could no longer tutor her. Adam also said that he believed that he would now be able to study Civil Procedure on his own without Barbara's assistance.
Barbara has asked you for a legal analysis of her rights against Adam. She believes Adam is legally obligated to continue to tutor her and she would like Adam to resume his tutoring. If she is unable to force him to tutor her, she would like to force him to pay for whatever it will cost her to pay someone else to tutor her.
Please respond to Barbara's request for legal assistance. Keep in mind that a careful development of an analysis of the legal rights, if any, which she can assert against Adam must include the arguments you would anticipate would be made by Adam's attorneys on his behalf.
Question Two
(Suggested Time: One Hour; 50 points)
Seller entered into a written contract with Buyer. The contract states that it will be effective from January 1, 2002 to December 31, 2003. In the contract, Seller promised to sell Buyer altimeters. Buyer is an airplane manufacturer. Buyer includes altimeters, a device which reports how high the airplane is flying, in all of its airplanes. The contract states that the Seller will deliver altimeters within 30 days of receipt of a purchase order from Buyer. The contract also states that Buyer will not purchase altimeters from any other source. In addition, it contains a recitation that all airplanes that it produces will contain altimeters. The price for each altimeter was to be $1000. In the event that Seller failed to deliver any ordered altimeter, Seller would be required to pay to Buyer, as liquidated damages and not as a penalty, $500 for each altimeter that Seller failed to deliver in accordance with the terms of the contract.
We represent the Seller who came to us last week with the following story. For the first six months of 2002, buyer ordered between 2 and 5 altimeters. Seller delivered each of the orders within 30 days of receipt of the order. In June, finding that its parts suppliers were falling behind in their deliveries, Seller approached Buyer and made two requests. First, Seller asked Buyer to extend the delivery period from 30 days to 45 days from the receipt of the purchase order. Second, Seller asked Buyer to estimate the number of altimeters it was likely to need during the remainder of the contract period. Buyer agreed to the change from 30 days to 45 days, but refused to estimate the number of altimeters it would require. One month after this conversation, Buyer placed an order for 15 altimeters. Seller delivered 5 altimeters on the 40th day after receiving this purchase order, but was unable to deliver the remainder of the order because of delays in receiving parts from its suppliers and limitations in its own production facilities.
Buyer notified Seller that its failure to deliver its order within 30 days of receiving the order represented a breach of its contract. Buyer further notified Seller that its failure to deliver all of the 15 altimeters ordered represented a breach of its contract. Buyer demanded that Seller pay the liquidated damages specified in the contract, which Buyer calculates to be $7500 (15 altimeters X $500 per altimeter). Buyer also stated that Seller's failure to make timely delivery of all 15 of the ordered altimeters had resulted in a loss of profit of $100,000 because it was unable to complete and deliver 10 airplanes to one of its major airline customers.
Seller has told us that the price of $1000 per altimeter remains the average market price for altimeters. Seller has also told us that he has made a number of calls to other altimeter manufacturers and that there are several sources from which Buyer could purchase the additional ten altimeters.
Please provide Seller with your analysis of its liability under the contract with Buyer. In developing this analysis, please include the arguments you would expect would be made by Buyer's attorneys on its behalf.