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A patient owed a physician $25,000 for professional services. The physician orally assigned this claim to her adult daughter as a wedding gift. Shortly thereafter, the physician suffered substantial losses in the stock market, and assigned by a signed writing the same claim to her stockbroker in partial satisfaction of previous financial advances legally made by the broker to the physician in the physician’s previous stock-market transactions. Without knowledge of either assignment, the patient subsequently paid the physician the $25,000 then due, which the physician promptly lost at a horse track, although she remains solvent. Assuming that Article 9 of the UCC does not apply to either of the assignments in this situation, which of the following is a correct statement of the parties’ rights and liabilities?

An insurance company issued an insurance policy to a homeowner. The policy failed to contain certain coverage terms required by a state insurance statute. When the homeowner suffered a loss due to a theft that was within the policy’s terms, the insurance company refused to pay, claiming that the contract was unenforceable because it violated the statute. Will the homeowner succeed in an action against the insurance company to recover for the loss?

On June 1, a general contractor and a subcontractor entered into a contract under which the subcontractor agreed to deliver all of the steel joists that the general contractor required in the construction of a hospital building. The contract provided that delivery of the steel joists would begin on September 1. Although the general contractor had no reason to doubt the subcontractor’s ability to perform, the general contractor wanted to be sure that the subcontractor was on track for delivery in September. He therefore wrote a letter on July 1 to the subcontractor demanding that the subcontractor provide assurance of its ability to meet the September 1 deadline. The subcontractor refused to provide such assurance. The general contractor then immediately obtained the steel joists from another supplier. If the subcontractor sues the general contractor for breach of contract, is the subcontractor likely to prevail?

A lawn service company agreed in writing to purchase from a supplier all of its requirements for lawn care products during the next calendar year. In the writing, the supplier agreed to fulfill those requirements and to give the company a 10% discount off its published prices, but it reserved the right to increase the published prices during the year. After the parties had performed under the agreement for three months, the supplier notified the company that it would no longer give the company the 10% discount off the published prices. Does the company have a viable claim against the supplier for breach of contract?

On March 1, an excavator entered into a contract with a contractor to perform excavation work on a large project. The contract expressly required that the excavator begin work on June 1 to enable other subcontractors to install utilities. On May 15, the excavator requested a 30-day delay in the start date for the excavation work because he was seriously behind schedule on another project. When the contractor refused to grant the delay, the excavator stated that he would try to begin the work for the contractor on June 1. Does the contractor have valid legal grounds to cancel the contract with the excavator and hire a replacement?

At the start of this past baseball season, a wholesale baseball distributor and a baseball team entered into a written agreement, whereby the distributor agreed to supply baseballs, meeting league specifications, to the team at a price of $20 per dozen, in such quantities as the team would order from time-to-time. The distributor agreed to deliver the balls to the team’s ballpark within 10 days of each order, payment to be cash on delivery. At first, the team used the balls left over from the previous season and ordered nothing. Then on April 19, the team placed a written order with the distributor for 50 dozen baseballs, at $20 per dozen, to be delivered on May 1. Since the team knew it would need an additional 50 dozen balls by the last two weeks in May, the team enclosed with the order a letter stating, “We also order an additional 50 dozen balls, if we can buy them for $18 per dozen.” What is the state of the contractual relationship between the parties at the time the baseball distributor received the April 19 communication from the team?

Amelia, an architect, entered into a contract with the city of Centersville for Amelia to design a hockey rink to accommodate a professional hockey team that was moving to Centersville.  A few weeks after the contract was formed, the professional hockey team decided not to move to Centersville. Mitchell, the mayor of Centersville, contacted many other professional hockey teams, but none wanted to move to Centersville. Mitchell met with a large number community members to determine if there would be any other use for the hockey rink once it was built if the city did not have a professional hockey team. No one in the community demonstrated the need for or desire to use an ice rink.  Can Centersville discharge its contract with Amelia?

A developer contracted in writing to sell to a buyer a house on a one-acre lot for $100,000. The developer told the buyer that the lot abutted a national park and that the water for the house came from a natural artesian spring. The developer knew that both of these representations were important to the buyer and that both were false. The buyer moved into the house and eight months later learned that a private golf course was being constructed on the adjacent land and that the water for his house was piped in from the city reservoir. The buyer immediately sued the developer to avoid the contract. The construction of the golf course will probably increase the market value of the buyer’s property, and the water from the city reservoir exceeds all established standards for drinking water. Is the buyer likely to prevail?

On May 1, a seller and a buyer entered into a written contract, signed by both parties, for the sale of a tract of land for $100,000. Delivery of the deed and payment of the purchase price were scheduled for July 1. On June 1, the buyer received a letter from the seller repudiating the contract. On June 5, the buyer bought a second tract of land at a higher price as a substitute for the first tract. On June 10, the seller communicated a retraction of the repudiation to the buyer. The buyer did not tender the purchase price for the first tract on July 1, but subsequently sued the seller for breach of contract. Will the buyer likely prevail?

In early January, a famous fast food restaurant chain entered into a contract with a consulting firm specializing in labor-intensive industries. This writing was signed by both parties, and provided that if at least 2,000 work-hours per restaurant are eliminated, the restaurant chain will pay to the consultants within 90 days of installation of new food production systems at the local restaurants a first installment of $1 million. It went on to provide that upon installation of new food processing systems nationwide, the restaurant chain will pay to the consultants a second and final installment of $1.5 million, that nationwide installation must be completed by January 15 of the following year, and that any amendments to the agreement must be in writing and signed by both parties. The consultants immediately began work on the restructuring of their client’s food processing methods. On September 5, the consultants had designed a radical change in the food production system that could be implemented by October 1, and they demanded payment of the first installment payment of $1 million. Were the consultants entitled to payment of the first installment when they completed design work on the new system on September 5?