Posted: November 9th, 2016

Mac and Rhamad signed a business contract with a clause that provides that if a dispute arises they must submit to binding arbitration to resolve the dispute.

1. Sam orally agreed to sell Jamie some land for $500,000. Jamie paid Sam the $500,000; Sam gave Jamie the deed to the land. Jamie took possession of the land and began building a cabin on it. One month later, Sam tried to retake possession of the land by arguing that the contract for the sale was invalid because it was oral, not written. Sam sued Jamie to invalidate the contract and retake the land. The court will likely conclude that Sam will: a) Win; the sale exceeded $500 so the contract must be written to be valid under the Statute of Frauds. b) Win; all land sales contracts must be written. c) Lose; because the contract was fully executed Sam cannot rescind the contract. d) Lose; because Jamie had begun building a cabin on the property, Sam cannot rescind the contract. 2. On Tuesday, Jon offered to sell his CD collection to Sandy for $100. Sandy replied, “I’m interested. I’ll think it over and let you know Thursday whether I want to buy the CDs.” On Wednesday, Jon agreed to sell the CDs to Jason, and Jason immediately gave Jon a letter that stated: “Jon, I will buy your CD collection for $100. As we agreed, I will pay you on Friday when I pick up the CDs. Yours truly, Jason.” Upon Jon’s receipt of this letter on Wednesday, what best describes Jon’s contract agreement(s)? a) By forming an agreement with Jason, Jon breached his contract with Sandy because he did not effectively revoke his offer to Sandy. b) Jon has formed contracts with both Jason and Sandy because Jon did not effectively revoke his offer to Sandy and created an enforceable written agreement with Jason. c). Jon and Jason have formed a valid, enforceable contract; Jon’s offer to Sandy was properly revoked. d) Jon effectively revoked his offer to Sandy, but has not formed an enforceable contract with Jason because Jason has not yet paid for the CD collection. 3. Mac and Rhamad signed a business contract with a clause that provides that if a dispute arises they must submit to binding arbitration to resolve the dispute. After they had been doing business together for a year, a dispute arose under the terms of the contract. Rather than submit to arbitration, Mac filed a lawsuit against Rhamad. Most likely the court will: a) Hear the lawsuit because Mac cannot be compelled to submit to arbitration; he is constitutionally entitled to a jury trial if he requests a trial. b) Conduct a hearing, then order a remedy without compelling Mac to submit to arbitration or to a jury trial. c) Compel Mac to submit to arbitration to resolve the dispute. d) Hear the lawsuit in a trial, then compel Mac to submit to arbitration, if Mac is not satisfied with the trial decision.