Sisters, Ruth and Stella, Owned

Sisters, Ruth and Stella, owned a house as joint tenants with right of survivorship. Stella died after Ruth sold her half interest to Roy. Roy claimed the entire property. Although joint tenants possess an undivided interest property, joint tenancy comes with certain restrictions. Roy's claim was based on one of those restrictions, the right of survivorship. However, an additional restriction is that joint tenants cannot sell without obtaining the permission of the other tenants. Therefore, the resolution of Roy's claim depends on whether Stella consented to the sale.

Harry Gordon gave his son Murray $40,000. Murray placed $20,000 in each of two custodial accounts for his children under the Uniform Gifts to Minors Act (UGMA). After Murray closed the accounts, he gave the balance to Harry. When Murray and his wife separated, she sought the money for their sons. Murray's wife's position was that the deposits were irrevocable gifts. This position was accurate, despite Murray's contention that the money was never intended as a gift, but was placed in those accounts so that Harry could avoid taxes. Gifts to minors under the UGMA are irrevocable. Therefore, once Murray placed the money in the accounts, the funds became the property of his sons. Therefore the wife was entitled to the money for the sons.

7. Richard Coddington opened a bank account with his mother, Amelia. Richard later married Margaret. Upon Richard's death, Margaret claimed a share of the account. Under New York law, there is a presumption that bank accounts opened under two names or to the survivor creates a joint tenancy, but Margaret claimed that the presumption of a joint tenancy was overcome by evidence she claimed demonstrated Richard's sole ownership of the account. This evidence was in the form of substantial withdrawals during Richard's lifetime. The statutory presumption could only be overcome by overwhelming evidence of another intent. Richard and his mother signed cards that indicated a right of survivorship.

Furthermore, Richard's substantial withdrawals during his lifetime did not deprive his mother of the same right to make the same type of withdrawals.

11. After attending lunch at the Bay View Restaurant, both John and Lynn's coats turned up missing. John had checked his coat, while Lynn had hung hers on a hook near the booth. Both sued the restaurant, under the theory that it was the bailee of their coats and had a duty to return them. John was correct because he gave his coat to a Bay View employee and entrusted that employee with the coat's safe keeping. When the attendant left the coat unattended he breached the duty the Bay View owed to John. Lynn was incorrect. Because she kept possession of her coat, Lynn also kept the responsibility to keep her coat safe. In fact, the presence of a coat check should have alerted Lynn to the fact that she was responsible for the safekeeping of her own coat if she kept it in her possession.

14. The truck that Contract Packers rented from Hertz Truck Leasing had a brake malfunction, which resulted in an injury to Cintrone, a Packer's employee. Cintrone sued Hertz, alleging a breach of the implied warranty that the truck was fit for use. Hertz's response was that implied warranties did not apply to bailments for hire. Hertz was incorrect. A bailment for hire is a sale of the use property for a certain period of time. Therefore, Packer was a purchaser and was entitled to protection under the implied warranty, which means that Cintrone should be entitled to compensation from Hertz.

Chapter 22

2. R-P took measurements and designed artwork for a new type of packaging for Kern's bakery. Kern's placed a $13,000 order with R-P based on those measurements and artwork, but returned the packages and refused to pay because of problems with size and artwork. The material conformed exactly to the specifications in Kern's order. When R-P sued for breach of contract, Kern claimed that there was no written contract and that, due to the price of the contract, an oral agreement could not be enforced under the statute of frauds. A recognized exception to the statute of frauds is that when an order conforms to industry standards, the requirement of a written contract is waived and R-P could enforce the contract.

3. Smythe wrote to Lasco to ask about the price of a freezer. Lasco's reply was that the freezer would cost $400 if purchased within 30 days. Smythe ordered a freezer at that price in that time period, but Lasco replied that it had changed the price to $450. Smythe claimed that Lasco could not change the price. Smythe was correct. Lasco's letter was an offer to Smythe, which specifically stated a period for acceptance. Smythe accepted the terms of the offer within that time period. Therefore, the contract was binding and Lasco had no right to change the terms of the offer.

6. Valley Trout Farms, a merchant, ordered fish food from Rangen, a merchant. Rangen sent an invoice indicating that it would charge a late fee for any unpaid bills. Although Valley did not pay, it also did not object to the late fee. Rangen sued for the unpaid bill and the late fees. Valley's position was that it had not agreed to be liable for late charges and therefore was not liable for the late charges. There is a different standard for merchants than there is for non-merchant purchasers. By accepting the merchandise with the invoice, Valley assented to Rangen's conditions and was liable for the late fees.

12. Richard, a retailer of video equipment, telephoned Craft Appliances and ordered a $1,000 videotape recorder for his business. Craft accepted Richard's order and sent him a copy of the purchase memorandum that stated the price, quantity, and model ordered and that was stamped "order accepted by Craft." Richard did not sign or return the memorandum and refused to accept delivery of the recorder when Craft delivered it to him three weeks later. Craft sued Richard. Richard raised the statute of frauds as a defense. However, both parties are merchants. The statute of frauds does not apply if industry standard dispenses with the necessity of a writing to form a contract. Therefore, if the industry standard was to place telephone orders and rely on confirmatory memorandum, Craft would be able to recover from Richard.

Chapter 23

4. Helen Thomas contracted to purchase a pool heater from Sunkissed Pools. The purchase price included installation, but Sunkissed left the heater in the driveway without installing it. Thomas was unable to move it and could not get a response from Sunkissed. The heater was later stolen. Who was responsible for the cost of the stolen heater depended on the contract between Thomas and Sunkissed. The contract specified that Sunkissed was responsible for the installation of the heater, not just the delivery. Sunkissed breached its contract by leaving the heater in a place where it was later stolen, therefore Sunkissed was responsible for the cost of the heater.

6. A thief stole a car and sold it to a good-faith purchaser for value. The good faith purchaser sold it to another buyer, who also purchased in a good faith and value. The original owner of the car sued the second purchaser for the car. The second purchaser argued that he bought the car in good faith from a good faith seller.