Contracts II Exam 2 hours Professor Bridgeman Spring Semester 2006 INSTRUCTIONS 1. This exam has 1 question and 3 pages, including this cover page. You have two hours to complete the exam. 2. The exam will be graded blindly. Do not in any way identify yourself other than with the identification number the College of Law has assigned to you. Doing so is an honor code violation and will be treated accordingly. 3. If you are using blue books, place your identification number on each blue book. Please write legibly, and only on one side of the page. Depending on your handwriting it may be a good idea to skip lines as well. 4. The examination is open book; you may use any written materials you wish. You may not, however, use any computerized source, whether on-line or not. Be sure to print out any materials stored on your computer that you may need before the exam begins. Computers may be used to type exams in accordance with Willamette’s policies and using only the software authorized by the College of Law. 5. The exam will be graded for content, not form, but you should work towards concise, well-organized answers. If relevant information is missing from a question, identify what you must learn and explain why it is relevant to the problem at hand. Do not spend too much time on trivial issues at the expense of harder ones. 6. Answer all questions based on your knowledge of the Uniform Commercial Code and general principles of common law. When dealing with issues that are treated differently in different jurisdictions, assume that the question is one of first impression in your jurisdiction. 7. Avoid using abbreviations unless they are absolutely clear and unambiguous. 8. Good luck, and have a great summer! It has been a tremendous honor for me to be a small part of your education here, and I thank you for the privilege and good times. 1 CONTRACTS II EXAM Spring 2006 Professor Bridgeman One Question, Two Hours Dr. Evil, an evil genius and graduate of Evil Medical School, decided to take over the world. He planned to do so by building a “Death Star” capable of firing a huge “laser” at Earth. Dr. Evil hired his favorite henchman, Number Two, to be the general contractor on the job. Number Two hired Mr. Roboto as a subcontractor to do the structural work on the “Death Star.” According to the contract between Number Two and Mr. Roboto, Mr. Roboto was to be paid for the structural work as soon as Dr. Evil paid Number Two. During the negotiations, Number Two told Mr. Roboto, “You understand, of course, that I won’t be able to pay you until I myself am paid by Dr. Evil. If he can’t pay me, you won’t be paid.” Mr. Roboto replied, “Of course, of course.” They then signed the contract, and Mr. Roboto began construction. Worried that his nemesis Austin Powers might foil his evil plans, Dr. Evil decided to build a trap for Powers. He hired Frau Farbissina to build a huge tank and fill it with sharks with laser beams on their heads. They drew up a contract with specific design plans, and wrote into the contract that any modifications would have to be in writing in order to be enforceable. The design called for a steel tank, but during construction Farbissina discovered that steel, combined with the weight of the water, would be too heavy for Dr. Evil’s underground lair. She wanted to change the plans and make the tank out of titanium, which would be much more expensive. When she telephoned to talk to Dr. Evil about the problem, he was out taking over the world and unavailable. But his henchman (and, for our purposes, authorized agent) Number Two told her to go ahead and use the titanium, and that Dr. Evil would pay for the difference. When Dr. Evil returned he was happy with the tank until he got the bill. He refused to pay Farbissina anything more than the original contract price, and she promptly filed suit. Dr. Evil approached Mustafa, an evil scientist, about buying deadly sharks. Mustafa promised to provide sharks with laser beams on their heads that would instantly vaporize their prey. Unfortunately, Mustafa never could get the lasers to work under water. Dr. Evil was incensed, shouting that all he asked for was “sharks with frickin’ laser beams on their heads!” But Mustafa replied that although he did not realize it before, it is impossible as a matter of optical physics for lasers to work under water. Dr. Evil replied, “We had a deal!” and called his lawyer. In the meantime, he needed an alternate plan, so he visited Patty O’Brien, a dealer in exotic fish. He told Patty why he needed the fish, and Patty directed him to the sea- bass tank. “Are these ill-tempered sea bass?” he asked, and Patty sincerely assured him that they were. Dr. Evil ordered all of them on the spot. When they arrived Dr. Evil had them placed in his new tank and allowed them to acclimate for a couple of days before 2 feeding an unfortunate henchman to them. The bass turned out to be quite docile, normal sea bass, however, and, not ill-tempered or dangerous at all. Finally, Dr. Evil also wanted to plan an escape. He had already arranged to have himself cryogenically frozen and shot into space should he ever be in danger of being caught by the authorities, so that he could safely return in the future. He decided that he would enjoy company in the future, so he hired Basil Exposition to design a similar cryogen chamber for his diminutive clone, Mini-Me (who is 1/8th of Dr. Evil’s size). They agreed that Basil would design the chamber to Mini-Me’s satisfaction, and deliver it to him when finished. Dr. Evil paid in advance. Soon, though, Dr. Evil had a falling out with Mini-Me, and decided to take Fat Bastard (a grumpy, hugely obese, and hygene- challenged evil colleague) into space with him instead, and promised him the cryogenic chamber that Basil was building. Fat Bastard notified Basil that Basil should now deliver the chamber to him instead of Mini-me. When he did, Fat Bastard rejected it three times for what he considered to be important shortcomings in the comfort it would provide, at which point Basil gave up. Meanwhile, when Mini-me heard about this turn of events he was irate, as he had already purchased an option to buy Blackacre in the year 2110. Eventually Dr. Evil shot himself into outer space to avoid being imprisoned. At that time he had not paid Number Two anything on the “Death Star” contract. Mr. Roboto heard about this during the construction of the “Death Star,” and immediately phoned Number Two. Number Two, who envisioned taking over Dr. Evil’s Evil Empire himself now that Dr. Evil was gone, told Mr. Roboto that nothing had changed with respect to the contract between Number Two and Mr. Roboto, and he fully expected Mr. Roboto to perform his side of the bargain. Mr. Roboto, who had completed about half of the project so far, refused to continue unless he was paid immediately for the work he had done so far. Number Two refused, and Mr. Roboto walked off the job. Discuss the various contract claims among the various participants, and the related issues. Ignore potential issues from other areas, such as criminal law. In particular, do not worry about whether Dr. Evil’s nefarious intentions might make any of the contracts unenforceable. 3 .