Mr. Stein placed an order with aGorcoConstruction Company's (GorcoConstruction) sales representative for the construction of two garages at a total cost of $ 38,000. TheGorcoemployee who took the order said, ""We will review it and get back to you and I can't authorize this contract at this moment."

The contract contained a clause that said, in the event Mr. Stein canceled the order he would pay 15% of the value of the order as "liquidated damages". (Note. You can assume such a clause is legal and no issues here are related to the validity of this clause.)

A few days later aGorcoagent spoke to Mrs. Stein an informed herGorcoConstruction had accepted the order. She said, "Fine".

However, unknown to eitherGorcoConstruction or Mrs. Stein, Mr. Stein had entered into a contract with another company. When Mr. Stein calledGorcoConstruction to cancel his order, aGorcorepresentative said something to the effect, "We have a contract and you have to pay us the 15% damages".Gorcosued Mr. Stein for breach of contract. Mr. Stein said he had no contract withGorcobecause he had revoked the offer prior to acceptance. Under common law contract law an offer can be revoked at any time prior to acceptance.

The trial judge told the jury that by law, a wife is the agent of the husband. Therefore, when Mrs. Stein said, "Fine" the contract was formed and the damage clause triggered.

However, we reverse the trial judge's statement of the law. A wife is not, as a matter of law, the agent of her husband. Neither is the husband automatically the agent of the wife. No contract was formed between Mr. Stein andGorcoand he does not owe them any damages because he revoked his offer prior to acceptance.

THIS IS THE QUESTION. The trial judge made a mistake about what the law says. Which statement below summarizes theincorrectstatement of law made by the trial judge?

1.

a.Gorco Construction cannot collect damages from Mr. Stein.

b.No contract exists between the plaintiff and the defendant.

c.A wife is not automatically the agent of the husband.

d.A wife is automatically the agent of the husband.

2.

Could a wife be an agent for her husband?

a.No, the case tells us a wife cannot be an agent for a husband.

b.Yes, if the husband has given her power to enter into contracts for him.

3.

If the parties wanted to appeal further, could the US. Supreme Court hear this matter?

a.We cannot tell from the information given.

b.Yes because this case involves a US Constitutional law issue and therefore the US Supreme Court can hear it.

c.Yes, any case can be appealed to the US Supreme Court.

d.No, this is a matter of state law and the US Supreme Court cannot make state law.

4.

Ifthe wife were an agent of the husband, then the contract was formed because ___________.

a.consideration existed.

b.there was an offer.

c.a writing existed.

d.there was an acceptance.

5.

No one disagreed that the order placed by Stein was _____________.

a.consideration

b.contract

c.an acceptance

d.an offer

6.

The Minnesota state supreme court says the law that applies to this scenario is "offers can be revoked at any time prior to acceptance".

a.False

b.True

7.

The state supreme court says the law regarding agents is really.

a.A wife is not automatically the agent of the husband.

b.A wife is automatically the agent of the husband.

c.No contract exists between the plaintiff and the defendant.

d.Gorco Construction cannot collect damages from Mr. Stein.

8.

This case is filed in the Minnesota state court system. Assume another case with the exact same facts but involving different people were filed in a Nevada court. Must the Nevada court follow this case?

a.Yes, this is a matter of federal law.

b.Yes, because this case involves a US Constitutional law issue.

c.No, this is a matter of state law and the Nevada court could hold that a spouse is automatically the agent of the other spouse.

d.No, because this is a matter of Minnesota constitutional law.

9.

True or false. If this case involved federal law, the reader would be told because the default is always state law.

a.True

b.False

10.

What is the answer to thelegalissue raised in the case?

a.No contract exists between Gorco and Mr. Stein.

b.A contract exists between Gorco and Mr. Stein.

c.A spouse is not automatically an agent of her husband.

d.An offer, acceptance, and consideration are needed to form a contract.

11.

What is the answer to thevalueissue raised in the case?

a.No contract exists between Gorco and Mr. Stein.

b.A contract exists between Gorco and Mr. Stein.

c.A spouse is not automatically an agent of her husband.

d.An offer, acceptance, and consideration are needed to form a contract.

12.

Which of the following is thelegalissue raised in the case?

a.Is a wife automatically an agent of her husband?

b.Is consideration necessary to form a contract?

c.Is an offer needed to form a contract?

d.Does a contract exist between Mr. Stein and Gorco?

13.

Which of the following is thevalue/overall/legal consequencesissue raised in the case?

a.Is an offer needed to form a contract?

b.Is consideration necessary to form a contract?

c.Is a wife automatically an agent of her husband?

d.Does a contract exist between Mr. Stein and Gorco?