Last Year’s Holiday Card

Contracts 

Final Examination

Professor Graham

Holiday 2011 Semester

PROFESSORS’ INSTRUCTIONS:                

  1. You have three hours to complete the exam, which consists of a single question.
  2. This is a closed-book exam.
  3. Assume that the facts as given are true.
  4. Good luck!

Question One

Augie had wanted a Red Ranger BB Gun® for as long as he could remember, but his penchant for mischief meant that he had never found one under the Christmas tree.  Christmas 2011 would be different, he thought.  All year long, he had accumulated good deeds.  He had walked old ladies across the street, instead of pushing them into traffic; he had put out fires, instead of pouring gasoline onto them; and he had limited himself to just one “swirlie” per classmate per week.

Confident that his good behavior would not go unrecognized, Augie wrote a letter to Santa in which he requested the BB gun.  But Augie was a careful child; he had read up on contract law, and decided to hedge his bets.  For this reason, after acknowledging his checkered past, Augie wrote in the letter that if he were to receive the gun, he would remain nice “for a reasonable time hereafter, not to exceed six months.”

Also, Augie included a penny and a peppercorn as enclosures in the letter.  Augie wrote that the penny was “his gift” to the “poorest of your elves,” and the peppercorn was merely an idiosyncratic “symbolic gesture” of his fondness for Santa.  In fact, Augie believed that Santa’s acceptance of the penny or peppercorn would create a binding contract between them.

Augie mailed this letter on December 1, 2011, and it was received at the North Pole on December 8, 2011.

Meanwhile, Santa had been performing his own due diligence.  Concerned that a BB gun might cause Augie to revert to his past ways, Santa wrote Augie a letter in which he proposed to give Augie the gun in return for Augie’s continued good behavior “for a period not less than twelve months hereafter.” The letter closed with the words, “Your failure to object to the terms of this letter will be construed as consent.” This letter was mailed to Augie on December 3, 2011, and was received by him on December 10, 2011.

When Augie’s letter arrived at the North Pole, Buddy, one of Santa’s independent-contractor elves assigned to the North Pole mailroom, deposited the penny in a charitable account that Santa’s Workshop, LLC, had established for the benefit of destitute elves.  Buddy ate the peppercorn (Santa had recently acquired a capsaicin phobia, owing to a delivery of gifts to the University of California-Davis in November 2011), then wrote Augie back to advise him that while Santa was rejecting Augie’s proposal, Santa hoped that Augie would accept Santa’s offer.  Augie received both Santa’s and Buddy’s letters, but never wrote a response to either.

When Christmas Eve and the time for deliveries to Augie’s neighborhood came, Santa found that he was out of Red Ranger BB Guns.  So instead, he delivered a Justin Bieber Model BB Gun® to Augie instead, along with a Justin Bieber Singing Toothbrush® (note: this latter product actually exists: http://www.justinbiebertoothbrush.com/).

On December 5, 2011, certain that the Red Ranger gun was as good as his, Augie sold twenty of his classmates opportunities to use the gun, at $1 per student.  When the gun arrived, several of Augie’s classmates balked at paying this rate.  Even when Augie offered to throw in complimentary use of the toothbrush, they refused to pay.  Angered by his reversal of fortune, Augie shot one of these students, Clyde, with the BB gun on July 1, 2012.

Identify and evaluate the issues implicated by the foregoing facts, taking care to consider, inter alia:

1)      Whether a binding contract was formed between Augie and Santa, and, if so, what its terms were;

2)      Whether Santa and/or Augie breached any such contract; and

3)      Whether and to what extent Augie is entitled to damages, and what remedies, if any, are available to Santa. 

 Happy Holidays! 

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