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On April 1 , Ann Star, a young television personality, signs a contract with Bland Television
Network to perform May 1 in a one-hour "live" T.V. show from 8 to 9 p.m. Bland agrees to pay Star
$1,000 for this performance. The contract also provides that if for any reason Star does not appear as
scheduled, she will "forfeit the sum of $25,000 to Bland as liquidated damages."
On April 10, Star informs Bland that she is suffering from acute fatigue and that her physician
probably will not allow her to appear as scheduled. Bland immediately urges her in writing to fulfill her
contractual obligations.
On April 15, Star tells Bland that she has miraculously recovered and will appear as scheduled on
the May 1 show.
On April 23, Bland informs Star that, due to her unpredictability, it has hired actress Prima
Donna as of that date and will not require Star's services.
On April 28, Prima Donna breaks her leg in an accident. Bland immediately wires Star that it has
reconsidered the whole matter and will hold her to the original contract to perform on May 1.
On the evening of May 1, Star appears at the studio ready to perform, but Bland, acting under
orders from the Federal Communications Commission, cancels the show in order to broadcast a special
address by the President of the United States.
Discuss the legal implications of the foregoing events.
4. CONTRACTS EXAM QUESTIONS
P and D, who were casual acquaintances, resided in communities 100 miles apart. On February 1,
P wrote D as follows:
I have decided to give up my farm, Blackacre, and move to town. 1 thought you
might consider buying it from me because you have often said that you were
going to move to a farm after retirement. 1 will sell you Blackacre for $100,000.
I'll let you have 10 days to think about it and to talk it over with your wife. In
other words, I'll keep the offer open and will not withdraw it during this time.
Sincerely yours,
/s/P
February 1, 2003
As a result of a delay in the mails, P's letter did not arrive in the normal course on February 2, but
was received on February 4. On February 8, P deposited in the mail a letter addressed to D in which he
said, among other things, "Blackacre deal off." This letter was not received by D until February 12, a
few hours after D had posted an acceptance of the offer. The letter of acceptance was received in due
course on February 13. In the correspondence that followed, P denied that any contract resulted, and D
did not tender any money to P. On February 20, D delivered to A a writing that stated, "I hereby
transfer to A my right to Blackacre under my contract with P for $100, receipt of which is hereby
acknowledged. /s/D." On February 25, D gave a similar instrument to B, who immediately presented it
to P. The next day A presented his claim to P.
What are the rights and liabilities of all the parties? Discuss.