CARDOZO LAW SCHOOL CONTRACTS II EXAM PROFESSOR BURNHAM EXAM NUMBER: _____ August 16, 2006 TIME ALLOWED:

2.5 hours. The examination is OPEN BOOK. Write legibly; illegible answers cannot be read. Assume that the relevant jurisdiction is the Commonwealth of Cardozo; that since Cardozo is a relatively new jurisdiction having no precedents of its own, all authority from outside the jurisdiction should be considered; the Uniform Commercial Code is in effect in Cardozo. There is no such thing in the Commonwealth of Cardozo as an error in an examination question. If a question is confusing or defective, the task of the lawyer-in-training in Cardozo is to explain the confusion or error. If you think a multiple choice question is ambiguous, explain why on a separate sheet of paper you turn in with the exam. TEST FORM: A Two and a Half Hours

PART I. Essay. 36%. Recommended time: 1 hour. Common Facts: A law school and a contractor were negotiating a contract for the construction of a student life center. The contractor was to build the project to certain specifications by 9/5/06 and the law school was to pay the contractor $1 million. Question 1. Just before they signed the contract, the Dean said to the contractor, If the project is not completed by 9/5, we are going to have a lot of angry law students. The contractor assured him that would not be a problem. On 8/1, the Dean and the contractor had a phone conversation during which the contractor told the Dean that the project probably would not be finished until some time after 9/5. The Dean demanded that the contractor give him a report by 8/10 showing improved progress. On 8/10, the Dean called the contractor and the contractor could not show improved progress. Furthermore, fearful that they will not be able to use the student life center, a number of students have threatened to withdraw from the law school, which will cost the law school $500,000 in lost tuition. On 8/10, the Dean seeks your advice. Specifically, he wants to know if the law school has a

claim for breach of contract, and if so, can it only recover damages (including the $500,000 in lost tuition) or can it also terminate the contract with the contractor and hire another contractor to finish the project on time. Question 2. Just before they signed the contract, the Dean said to the contractor, If the project is not completed by 9/5, we are going to have a lot of angry law students. The contractor assured him that would not be a problem, and agreed to the inclusion of the following conspicuous term in the contract: IF THE CONTRACTOR DOES NOT COMPLETE THE PROJECT BY 9/5, THE LAW SCHOOL DOES NOT HAVE TO PAY FOR IT. They then signed the contract. As work on the project proceeded, the Dean occasionally inspected it. One day the contractor said that it might not be completed on time. The Dean responded, Dont worry. This is really good work. We wont hold it against you if you are a little late. On 9/5, the contractor completed the entire project except for laying down a small portion of the floor. On 9/7, the work was completed. The contractor now says he underbid the work and in fact it is worth $1.2 million, which he demands. The Dean seeks your advice. Specifically, he wants to know if the law school can refuse to pay the contractor, and if it has to pay, does it have to pay $1.2 million?